Average electricity price for regulated rate customers connected to the wholesale market shows a Sunday decline of 18.5 percent, dropping to 172.64 euros per megawatt hour MWh from Saturdays level.
The drop aligns with reduced weekend demand and the fading effects of the heat wave.
For PVPC customers, the price is determined by adding the wholesale market’s average auction price to the compensation paid by demand to combined cycle power plants under the Iberian exception. This structure helps cap the price of gas used for electricity generation.
Consequently, final consumer costs reach 172.64 euros per MWh this Friday, versus 65.48 euros prior to the inclusion of a 50.03 euro compensation to gas companies.
That compensation is borne by consumers benefiting from the measure, including those on PVPC and those on indexed rates in the free market.
At the auction, the average wholesale market price, known as the pool, stands at 122.61 Euro/MWh for the upcoming Sunday. Data from the Iberian Energy Market Operator OMIE, reported by Europa Press, show a drop of 23.93 euros from yesterday’s 146.54 euro/MWh, a 16.33 percent decrease.
The maximum price for Sunday is expected to reach 250 Euro/MWh between 22:00 and 23:00, with a daily minimum of 50 Euro/MWh noted between 16:00 and 23:00.
Compared with the same period last year, prices have risen since 2021, when 87.22 Euro/MWh was recorded in the wholesale market. This Sunday, the price remains significantly higher but shows a notable moderation from recent days.
29 percent lower under the measure
Without the Iberian exception mechanism, supervised by the National Markets and Competition Commission CNMC, which limits gas prices for electricity generation, Spain’s electricity would average around 243 euros per MWh. The compensation applied to regulated tariff customers reduces the burden by about 71 euros per MWh, yielding a net reduction of roughly 29 percent for these households.
Current prices reflect a context marked by the heat wave and heightened demand with a strong role played by gas power plants in production.
Speaking about the broader trend, natural gas demand for electricity generation has been hitting records as gas prices rise in response to reduced Russian supply to the European Union.
The Iberian mechanism, which received approval from Brussels recently, sets a cap on gas price for electricity generation at an average of 48.8 euros per MWh over a twelve month span. This arrangement is designed to help households and businesses through a winter period when energy prices typically rise.
Specifically, the Iberian exception envisions gas for electricity generation at a price of 40 euros per MWh in the first six months, followed by a gradual five euro per MWh monthly increase through the end of the measure.
15 percent discount anticipated
The government anticipates a reduction in the receipts for the average electricity consumer with PVPC for the entire twelve month period of the approved cap. The impact is described in an accompanying report that is available to journalists and analysts.
For industrial users who face the spot price directly, the government expects a discount in the range of 18 to 20 percent. The first month may see a 15 to 17 percent reduction, with the last month hovering around 13 to 15 percent.