26.5% less than applying averagingN 26.5%
In Spain the average electricity price for regulated rate customers connected to the wholesale market declined by about 9.23% this Monday, compared with Sunday, reaching 244.19 euros per megawatt hour (MWh). This figure comes from provisional data reported by the Iberian Energy Market Operator (OMIE) and compiled by Europa Press. The dip reflects a blend of wholesale market dynamics and the compensation that demand pays to gas-fired power plants under the Iberian exemption, a policy designed to cap gas costs embedded in electricity generation. [Cite: OMIE data, compiled by Europa Press]
On its face the price is the sum of the wholesale market average auction value and the compensation paid to gas plants for applying the Iberian exemption. The authorization aims to limit the impact of high gas prices on electricity bills by sharing the burden across generation and consumption. [Cite: Iberian exemption mechanism details]
During the auction a daily pool price is established. The Monday average price in the wholesale market, known as the pool, stood at 145.35 euros per MWh. The intraday price oscillated, peaking at 195 euros per MWh between 10:00 and 23:00 and dipping to a minimum of 110 euros per MWh between 11:00 and 12:00. The range illustrates how supply and demand forces shape hourly values within the day. [Cite: OMIE auction data]
To the pool price is added the compensation amount of 98.84 euros per MWh owed to natural gas companies. This compensation is part of the policy framework that supports regulated tariff customers or taxpayers when the market is exposed to gas price volatility. In the free market, electricity prices are indexed rather than subject to the same compensation structure. [Cite: Iberian exemption mechanism]
Brazilian-style pricing context and impact on consumers
Without the Iberian exemption mechanism in place, the price of electricity in Spain would be higher on average. Projections indicate a potential average of 332.44 euros per MWh in a scenario without the gas price-limiting measure. This would translate into roughly 88.25 euros more per MWh, meaning regulated rate customers would see a noticeable rise in bills. The current approach reduces the effective cost by about 26.55 percent on average, relative to the hypothetical scenario without the exemption. [Cite: energy market analyses]
The Iberian mechanism entered into force on June 15 and sets a cap on gas costs for electricity generation. The cap targets an average of 48.8 euros per MWh over a twelve month period, a design intended to cushion households and businesses through the winter when energy prices can spike. The policy outlines a path for natural gas that begins at 40 euros per MWh in the first six months and then increases by five euros per month until the measure ends. [Cite: official Iberian exemption framework]
The approach is intended to stabilize prices for households and ensure a predictable energy expense during a time when wholesale markets can be volatile. This framework demonstrates how regional cooperation and price governance can influence affordability while maintaining reliability in the electricity system. [Cite: energy policy overview]