the average price for electricity for regulated rate customers linked to the wholesale market is expected to fall by 21.1 percent this Saturday through the coming Friday, resting at 189.3 €/MWh according to provisional data from the Iberian Energy Market Operator OMIE and compiled by the energy press service EP.
this price results from combining the wholesale market auction average, known as the pool, with the compensation that demand pays to gas fired power plants as part of applying the Iberian exemption designed to cap gas costs for electricity generation.
in the auction, the pool average for this Saturday is 119.31 Euro/MWh. the daily maximum is forecast between 22:00 and 23:00, while the minimum is seen between 13:00 and 14:00, at 81.49 Euro/MWh for the day. to this pool price, a compensation of 69.99 Euro/MWh is added, which is paid to gas companies. this remains the case even though most consumers benefit from the measure, including those on the regulated tariff PVPC and taxpayers. in the free market, pricing follows an indexed rate.
7.8% less
without the Iberian exemption mechanism that caps gas costs for electricity generation, Spain’s electricity price would average about 205.36 euros per MWh, implying an increase of roughly 16 euros per MWh. that would mean higher costs for regulated rate customers and for the broader electricity bill. with the exemption, the impact is that average charges for regulated rate customers are reduced by around 7.8 percent on average, providing relief amid sharp market volatility.
the Iberian mechanism, which began operating on 15 June, sets a cap on natural gas costs for electricity generation at an average of 48.8 euros per MWh over a twelve month period, a move aimed at smoothing prices through the coming winter when energy markets tend to be more volatile. specifically, the Iberian exemption manages the gas price path for electricity generation, starting with an initial increase of 40 euros per MWh in the first six months and then a gradual monthly adjustment of five euros per MWh through the end of the measure.
The ministry of ecological transition and demographic challenge has issued a plan for a royal decree intended to publicize information and reduce the volatility of the PVPC regulated tariff. the proposal seeks to shift more of the tariff’s reference framework toward futures markets and to extend these references as they grow, aiming to bring stability to a rate that has been heavily affected by electricity market volatility in the previous year and that is expected to trend for 2025.
in practical terms, the proposal outlines the inclusion of a medium and long term price basket in the PVPC formula that covers the compute of charges for owners of roughly nine million supply points, which account for about a third of the country, to prevent sharp fluctuations in the short term while preserving affordability. the approach is designed to encourage savings and more efficient consumption by giving consumers clearer price signals and longer horizon benchmarks that smooth out daily market swings.