This report examines recent movements in the average electricity price for customers under the regulated rate linked to the wholesale market. The market has shown a notable dip, with a projected reduction around 40.8% for the coming period. For this Saturday, the wholesale market price is expected to reach up to 110.42 euros per megawatt hour (MWh).
During the auction for the so-called pool, the average price of electricity in the wholesale market on Sunday stood at 97.73 euros per MWh. Consequently, the lowest price is forecast to be 140 euros per MWh between 00:00 and 01:00, and 81.40 euros per MWh between 15:00 and 16:00. The Iberian Energy Market Operator, OMIE, reported these figures, as relayed by Europa Press.
To this pool price is added a compensation paid to gas companies by consumers who benefit from the measure, including those on the PVPC regulated rate or those on an indexed rate in the free market, which amounts to 12.69 euros per MWh for this market.
51.4% less than applying the measure
In the absence of an Iberian exception mechanism that would cap gas prices for electricity generation, the average price of electricity in Spain is projected to be about 227.37 euros per MWh. This implies around 117.13 euros per MWh more than what PVPC customers would pay, representing a roughly 51.4% reduction for those on the regulated rate.
The Iberian mechanism, which began on 15 June, caps the gas price used for electricity generation at an average of 48.8 euros per MWh for a twelve-month period. This cap is designed to blunt the impact of higher energy prices through the coming winter. The measure has been described as a safeguard for consumers facing rising costs.
Specifically, the Iberian exemption sets a trajectory for natural gas prices used in electricity generation, starting at 40 euros per MWh for the first six months and increasing by five euros per MWh each month thereafter until the measure’s end.
Price stands at 204.41 Euro MW/h in the first two weeks
In the first two weeks of December, the average daily price in Spain’s wholesale market (the pool) was 137.05 euros per MWh. When the extra cost from the gas price cap is included, the overall figure rises to 204.41 euros per MWh, according to the ASE group’s calculations. This marks a 64.30% increase from November but a 14.5% decrease from the same period a year ago.
The rise in electricity costs in early December is linked to the price of natural gas in Europe and a colder start to the month, which typically reduces wind energy production and increases demand. Analysts note that, despite these pressures, Spain’s price level remains substantially lower than that of larger European economies, largely due to the gas price cap. If current weather forecasts hold, electricity prices are expected to stay below 200 euros per MWh for the rest of December, which many see as a welcome trend.