Average electricity prices for regulated-rate customers connected to the wholesale market are expected to decline by 0.92% this Saturday. Provisional data from the Iberian Energy Market Operator (OMIE), collected by Europa Press, indicate a price of up to 382.31 euros per megawatt-hour (MWh) for the day. This figure reflects the sum of the wholesale market auction average and the compensation paid by demand to the gas-fired combined cycle plants under the Iberian exemption, a policy designed to cap gas costs for electricity generation.
As a result, the price trend continues downward, remaining below the peaks reached since the Iberian exemption’s implementation. Earlier this week, the market saw prices surge to as high as 436.25 euros per MWh on Tuesday and Wednesday, illustrating the volatility driven by the policy’s effect on price dynamics.
In the Sunday wholesale market auction, the average price of electricity, known as the pool, was set at 138.74 euros per MWh. The day’s maximum price is expected to be registered from 10:00 to 23:00, with a minimum of 225 euros per MWh and a notable allocation of 57.91 euros per MWh between 11:00 and 12:00 to the day’s course. These figures reflect the shifting balance between market fundamentals and the compensatory mechanisms in place to cushion consumers from extreme price movements.
When the pool price is combined with the compensation of 243.57 euros per MWh, the overall price signal paid by gas companies is established. Regulated-rate (PVPC) consumers—or taxpayers benefiting from the measure—are the primary beneficiaries of this arrangement, while those in the free market follow an indexed rate pattern. This layered structure helps explain why price behavior in the Iberian market can diverge from other European markets at times.
The week’s spike in electricity prices, including gas and other energy commodities, can be traced back to broader supply concerns and the announcement from Gazprom that gas supplies to Germany would be reduced for three days starting on 31 August. That decision contributed to heightened volatility and price pressure in the early part of the week, even as the Iberian exemption aimed to moderate gas costs for electricity generation.
17% savings versus not applying the measure
Without the Iberian exemption mechanism that caps gas prices for electricity generation, the average price of electricity in Spain would have hovered around 460.76 euros per MWh. In such a scenario, PVPC customers would face prices roughly 78.45 euros per MWh higher on average, translating into savings of about 17.03% for those under regulated rates when the exemption is active. This comparison highlights the impact of the policy on consumer bills and market stability during periods of price spikes.
The Iberian mechanism, which began operating on 15 June, sets a cap on the gas price for electricity generation at an average of 48.8 euros per MWh over a twelve-month horizon. The design seeks to shield the market from wintertime price volatility and supply shocks while maintaining a balance with gas-market dynamics. Under the Iberian exemption, natural gas used for electricity generation is guided toward a price of 40 euros per MWh, with a planned monthly increase of five euros per MWh during the first six months and continued adjustments thereafter.
From the outset, the aim has been to deliver predictable pricing at the point of generation, enabling households and businesses to better forecast energy costs. Early estimates suggested substantial savings for Spanish consumers: around 1,383 million euros in the first two months of operation, and a daily societal impact of approximately 22 million euros since the mechanism came into effect. These figures reflect the policy’s perceived value in stabilizing consumer bills amid a rapidly changing energy landscape, even as market participants continue to assess long-term effects on supply, investment signals, and cross-border energy flows.