The average electricity price for customers on a regulated tariff who are connected to the wholesale market is set to fall by 2.9% on Tuesday compared with Monday, arriving at 237.1 euros per megawatt hour (MWh). This figure, reported by the Iberian Energy Market Operator and compiled by Europa Press, reflects the latest dynamics in the Iberian electricity system. In practical terms, this means households and businesses currently paying PVPC rates or those with indexed pricing face a more favorable rate when they receive their next bill. The reduction is a consequence of how the market clearing price interacts with government and market mechanisms designed to shield consumers from sudden gas price swings.
At the core, the price shown includes the wholesale market average plus a compensation component designed to support gas-fired power plants under the Iberian exception policy, which aims to moderate electricity costs while ensuring reliable generation. This blend—an auction-derived pool price plus the compensatory payments—collects its effect on consumers who are subject to regulated rates or who are in the free market but still benefit from the measure. In other words, even if a consumer chooses a different tariff, the mixed pricing framework can influence the overall cost signal that appears on bills.
On Tuesday, the day-ahead market (the pool) recorded an average price of 143.20 euro/MWh for electricity in the wholesale market. The price trajectory showed considerable intraday movement, with the highest level reaching 180.03 euro/MWh between 22:00 and 23:00, and the lowest point dipping to 105 euro/MWh between 17:00 and 18:00. This volatility reflects the balance of supply and demand in the Iberian energy system and the operational realities of power generation and transmission.
To complete the pricing picture, an additional 93.9 euro/MWh is added as a compensation to gas companies. This component is eventually reflected in consumer billing, particularly for those who participate in the PVPC scheme or those with indexed pricing even if they are exposed to the free market. The intent behind this structure is to stabilize costs for a broad set of customers while maintaining investment signals for gas and power producers.
30% less
Without the Iberian exception mechanism that caps gas prices used for electricity generation, the price of electricity in Spain would likely average around 339.81 euro/MWh, implying a potential increase of about 102 euro/MWh. In other words, regulated-rate customers would be paying roughly 30% less on average thanks to the current policy framework. The Iberian mechanism, which has been in force since 15 June, places an average gas price cap of 48.8 euros per MWh over a twelve-month horizon. This cap provides a buffer against expensive gas supplies during colder periods when demand and generation costs tend to rise.
The core concept behind the Iberian mechanism is to manage the cost of natural gas used in electricity generation. In the first half of the measure, the gas price for power production is pegged at 40 euros per MWh, with a planned step-up of five euros per MWh each month through the end of the mechanism. This staged approach is intended to balance affordability for consumers with the ongoing needs of power plants to operate reliably under changing market conditions.
In short, the Iberian exception creates a price pathway that moderates spikes in generation costs while safeguarding energy supply. By smoothing the impact of gas price volatility on electricity, it supports a more predictable pricing environment for households and businesses across both regulated and indexed tariff schemes. This mechanism is central to the ongoing discussions about energy affordability and market resilience as winter approaches and energy demand patterns shift.