The average electricity price for regulated tariff customers connected to the wholesale market will fall by 8.84 percent this Sunday, settling at 261.67 euros per megawatt hour. Data compiled by the Iberian Energy Market Operator and released by Europa Press.
The decline stems from adding the auction average in the wholesale market to the compensation paid to combined cycle power plants under the Iberian exception, a measure designed to cap gas costs for electricity generation.
During the auction, the wholesale market price, often referred to as the pool, averaged 141.1 euros per megawatt hour this Sunday. The highest price of the day reached 205.41 euros per MWh between midnight and 1 a.m., while the lowest was 25.09 euros per MWh, registered between 5 p.m. and 6 p.m.
Compensation of 120.57 euros per MWh is added to this pool price for gas companies and for consumers on regulated rates (PVPC) or those on indexed tariffs in the free market who benefit from the measure, with the cost ultimately borne by the customers who receive the protection.
30% less than without the measure
In a scenario without the Iberian mechanism to limit gas costs for electricity generation, Spain’s electricity price would average around 373.19 euros per MWh. This would be roughly 111.52 euros per MWh higher than the current regulated rate compensation for customers, translating to an average saving of about 29.88 percent for consumers.
The Iberian mechanism, which began on June 15, sets a cap on the average gas price used for electricity generation. It establishes 48.8 euros per MWh for the coming twelve months to cover the period when energy prices are typically higher, including the upcoming winter months.
The framework outlines a path for the Iberian exception, with natural gas priced at 40 euros per MWh for electricity generation in the first six months and then a monthly increase of five euros per MWh through the end of the measure.
Teresa Ribera, the Third Vice-President of the Government and Minister for Ecological Transition and Demographic Challenge, estimated this week that the Iberian exemption has yielded savings of 1,383 million euros for Spanish consumers over the two-month validity period. She noted that this figure corresponds to approximately 22 million euros in daily savings for Spanish society since the mechanism came into force.