Average electricity prices for regulated-rate customers connected to the wholesale market are expected to drop by 12.4% this Thursday, easing from the recent peak but still staying above 380 euros per megawatt-hour (MWh). The mark of 382.11 euro/MWh reflects a significant step down from the previous day’s high, which was around 436.25 euros/MWh, the highest level since the gas price cap was introduced in mid-June, according to provisional data collected by the Iberian Energy Market Operator (OMIE) and reported by Europa Press.
The price movement results from the combination of the wholesale market auction average and the compensation that demand will pay to combined-cycle power plants under the Iberian exemption, the policy designed to curb gas costs for electricity generation.
At the auction, the average price in the wholesale market, known as the pool, stood at 161.88 euro/MWh for Thursday. The system has a daily price maximum between 10:00 and 23:00 at 209.26 euro/MWh, with a minimum of 133.1 euro/MWh occurring between 17:00 and 18:00, as noted in the market data.
When the pool price is combined with the corresponding compensation for gas companies, the PVPC consumers, or those in indexed tariffs even while in the free market, face a total that is paid by the consumers benefiting from the measure. The key dynamic is that the pool price plus compensation creates a capped cost for regulated-rate electricity users under the Iberian mechanism.
The recent rise in electricity prices has been driven mainly by persistently high natural gas prices, a situation reinforced by Gazprom’s announcement of a cut in supply from August 31 and a temporary increase in gas delivery to Germany. Dutch TTF gas futures rose more than 5% on Wednesday, exceeding 287 euro/MWh.
17.6% less than applying the measure
Without the Iberian exemption mechanism limiting gas-based electricity costs, Spain’s average electricity price for Thursday would be around 463.98 euro/MWh, implying a difference of about 81.8 euro/MWh more than what regulated-rate customers are paying under the current system, which translates to roughly 17.6% savings for those customers on average.
Prices across the European market also softened on Thursday, in contrast with earlier two-day highs. France saw prices above 630 euro/MWh, while Germany hovered around 599 euro/MWh, and Belgium and the Netherlands recorded prices near 588 and 585 euro/MWh respectively, signaling a broader regional easing alongside ongoing market volatility.
The Iberian mechanism, which began on 15 June, places an average cap on gas costs for electricity generation at about 48.8 euros per MWh over twelve months, a policy aimed at shielding consumers during the next winter when energy costs typically rise. The mechanism sets a path for natural gas-related electricity generation that includes an initial rise of around 40 euros per MWh in the first six months, followed by a monthly decrease of five euros per MWh until the policy’s end.
Officials have highlighted the policy’s impact on consumer savings. Teresa Ribera, the government’s third vice-president and minister for Ecological Transition, estimated that the Iberian exemption saved about 1,383 million euros for Spanish consumers in the first two months of its validity. Rivera also noted that this figure corresponds to savings of around 22 million euros per day for Spanish society since the mechanism began. The estimates reflect a broader aim to stabilize electricity affordability for households and small businesses across the region while maintaining electricity supply security.
Market participants and observers continue to monitor how the Iberian mechanism interacts with broader European energy markets, the evolution of gas prices, and policy developments that could influence wholesale and regulated-rate electricity costs in the near term. These dynamics are essential for understanding how cross-border energy policies and price controls affect consumer bills and market behavior in both the Iberian Peninsula and neighboring markets. (Source: OMIE market data, corroborated by market observers and official statements.)
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