This average electricity price in the wholesale market rose again on Thursday, moving above 210 euros per megawatt hour (MWh) and reaching its highest point since late last April 29. The market session shows a steady uptick as traders weigh supply and demand dynamics across the Iberian region.
Data compiled by the Iberian Energy Market Operator indicate that the Thursday average will settle around 214.74 euros per MWh, about 4.29 euros higher than the prior day’s price of 210.45 euros. This movement underscores ongoing volatility in European energy markets and the sensitivity of prices to shifting gas and power fundamentals.
On the second day of June, the top price observed during the 24-hour cycle is forecast to be 256.46 euros per MWh, occurring between 22:00 and 23:00. The daily trough is expected to be 171.85 euros per MWh, recorded between 16:00 and 17:00.
Compared with a year earlier, the Thursday average is significantly higher, marking a price level about 153 percent above the 84.85 euros per MWh seen on 2 June 2021. The pace of price changes this year reflects broader European energy market dynamics, as a mix of gas, LNG, and renewable output shapes daily outcomes.
Pool prices directly influence the regulated tariff, known as PVPC, which covers the majority of households in the country. This price signal also serves as a benchmark for the roughly 17 million households in the free market who actively manage their own supply.
National energy authorities reported that in 2021 around 1.25 million customers moved from PVPC to a fixed-price free market option, highlighting a trend toward price certainty amid rising energy costs. This shift occurred during a period of pronounced upward pressure on energy prices and market reform efforts.
On 14 May, the Official State Gazette published a Royal Decree introducing a mechanism to cap gas prices used for electricity generation. The cap aims to average 48.8 euros per MWh over a twelve-month window, providing a shield for the upcoming winter as prices tend to climb in colder months.
Despite the publication of the decree, the mechanism awaits formal approval from Brussels and will be initiated by the Ecological Transition order prior to implementation. The draft framework sets the stage for the cap to influence electricity costs across the market once in force.
The government values the cap by projecting a reduction in the regulated PVPC price for the average consumer, estimated at around 15.3 percent during the twelve-month implementation period for electricity generation from natural gas, as outlined in the accompanying impact report.
For industrial consumers who pay the spot price, the government predicts reductions in monthly bills of roughly 18 to 20 percent in the initial month, with a broader range of 13 to 15 percent by the later stages of the period.
Even so, Energy Minister Teresa Ribera emphasized that there is some uncertainty in calculating the exact impact of the gas cap. She remains confident that the government forecast will place price changes in the vicinity of 15 to 20 percent, acknowledging that real-world results may vary as the market adjusts to the new limit.