The average price for electricity paid by regulated-rate customers connected to the wholesale market is set to fall by 16.7% this week. Provisional OMIE data reported by EP show a price of 318.29 € per megawatt hour (MWh) for Friday, calculated up to Thursday. This decline follows recent volatility in the Iberian market as the energy system adjusts to policy measures that cap the gas price used for generation.
The lower price results from a combination of the wholesale market auction average and the compensation paid to gas-fired plants under the Iberian exemption. This mechanism is designed to limit gas costs to power generation, with the intention of easing bills for consumers while maintaining supply reliability through the gas-fired capacity that backs the grid during peak periods.
Consequently, the price has moved down for a second consecutive day, pulling away from the recent peaks that followed the Iberian exemption’s activation. Earlier in the week, prices rose to 436.25 euro/MWh after the policy came into force on Tuesday and Wednesday, reflecting the market’s reaction to the new price framework.
At the auction, the average price in the wholesale market, commonly referred to as the pool, was set at 175.33 euro/MWh for Friday. The maximum observed during the day is expected to reach 243.86 euro/MWh between 22:00 and 23:00, while the minimum is projected at 125 euro/MWh between 04:00 and 05:00. On top of the pool price, a compensation of 142.96 euro/MWh is payable to gas suppliers, covering both regulated-rate consumers and those on the free market who benefit from the mechanism. In the deregulated tier, pricing remains indexed to market conditions with a separate structure.
The spike in gas prices this week was driven by supply decisions and larger market dynamics. Gazprom announced a three-day cutoff of gas flows to Germany starting on 31 August, a move that pushed natural gas prices higher across Europe. As a result, the Dutch TTF benchmark rose above 310 euro/MWh this Thursday, while Iberian gas prices tracked higher in the Mibgas market at 208.62 euro/MWh, up 7.8% for the day.
36% less
Without the Iberian exemption mechanism that caps gas costs for generation, electricity prices in Spain would average around 500.13 euro/MWh. That would mean a compensatory adjustment of roughly 181.8 euro/MWh for regulated-rate customers, translating into an overall reduction of about 36.3% in the average bill for those on regulated tariffs.
Across Europe, electricity prices continued to rise this Friday. In France, prices exceed 706 euro/MWh, while Germany shows around 699 euro/MWh. Belgium and the Netherlands report levels near 700 and 693 euro/MWh respectively, illustrating a broad regional pattern of elevated wholesale costs even as Iberia benefits from the price-limiting mechanism.
The Iberian mechanism, introduced on 15 June, aims to limit the gas price used for electricity generation to an average of 48.8 euro per MWh over a twelve-month horizon. The policy contemplates the upcoming winter when energy demands and prices typically rise. Specifically, the Iberian exception targets natural gas costs with an initial upward adjustment of 40 euro/MWh in the first six months, followed by a gradual five-euro increase each subsequent month through the measure’s horizon.
Teresa Ribera, the government’s third vice-president and minister for Ecological Transition, has defended the policy, noting savings for Spanish consumers. In the first two months, the mechanism is estimated to have delivered about 1.383 billion euros in direct benefits to households and businesses, with Ribera arguing that the arrangement has produced daily savings across the economy since its inception.