The Tuesday Shift in Regulated Electricity Rates Across the Iberian Market
The average electricity price for customers with regulated rates linked to the wholesale market is set to drop by 19.46 percent this Tuesday compared with Monday. The price stands at 66.17 euros per megawatt hour, marking the lowest level since November 22 of the previous year, at 75.19 euros per MWh.
In the wholesale pool known as the Iberian market, the Tuesday average price for electricity was 65.41 euros per MWh. Provisional data from the Iberian Energy Market Operator OMIE indicate that the highest price will occur between 19:00 and 20:00, while a minimum of 107 euros per MWh is expected between 02:00 and 05:00, with a low of 4.11 euros per MWh in that same overnight window. These figures reflect the daily dynamics of supply and demand across the Iberian Peninsula and the wider European energy grid.
On top of the pool price, a compensation charge of 9.78 euros per MWh is added for this Tuesday. This amount is paid by consumers benefiting from the regulated rate PVPC or those on indexed rates while within the free market framework. The compensation is designed to support energy system costs and market adjustments, ultimately affecting the final consumer price.
The price for this Tuesday, already the lowest seen since November 22, shows wider trends for the December period from the 1st to the 20th. For regulated tariff customers linked to the wholesale market, the average price rose to 185.47 euros per MWh in this window, compared with 120.79 euros per MWh in the corresponding period of the previous month. This shift highlights the ongoing volatility in wholesale markets and the varying impacts on end users registered under regulated schemes.
Significant Gap Between Regulated and Market Prices
Analysts note a pronounced difference in pricing when an Iberian exception mechanism is not in place to cap gas costs for electricity generation. In such scenarios, expected average electricity prices in Spain run around 178.37 euros per MWh. This figure translates to a gap of roughly 103.18 euros per MWh compared to what customers on the regulated rate pay on average, equating to a 57.85 percent reduction for these regulated customers.
The Iberian mechanism is intended to address the winter period when energy costs typically spike. It does so by capping the price of natural gas used for electricity generation at an average of 48.8 euros per MWh for a twelve-month window, starting mid June. This cap helps moderate wholesale costs and provides more predictable pricing for consumers who are part of the regulated scheme.
Specifically, the Iberian exception outlines a staged approach to gas price implications. The mechanism allows for natural gas to influence electricity production starting at a cap of 40 euros per MWh, with an observed monthly increase of approximately five euros per MWh during the first half of the measure. The rate remains in place through the end of the defined period, aiming to stabilize prices for households and businesses alike.