This Friday, the wholesale electricity price in the Iberian market is set to drop by about 17%, landing at roughly 227 euro per megawatt hour (MWh). The shift follows a forthcoming auction in the energy pool, with an adjustment to be covered by gas-cap beneficiaries to compensate power plants that rely on natural gas.
If the gas price cap had not existed, the Iberian Peninsula would see a price higher by about 55 euros, with costs around 282.35 euro per MWh. The current setup shows how the cap shapes daily market outcomes for households and businesses alike.
The price trend marks a second straight decline in electricity costs. Market observers anticipate another challenging session for energy markets as Germany declares a gas-emergency posture in response to tighter supply from Russia and elevated prices.
The German development, amid a broader European push to curb gas usage, has prompted discussions about using coal to shorten gas demand in the economy. Teresa Ribera, third vice president of the Spanish government and minister for ecological transition, addressed the matter this morning.
The minister urged limiting gas consumption, noting that even in an extraordinarily difficult period — such as last week’s heat wave and the rebound in electricity demand — short-term gas controls appear to have an immediate effect.
International markets continue to feel the tension, with Italy in particular facing a renewed spike in the day-ahead pool price, which could reach new highs beyond 300 euro per MWh. The forecast shows a maximum near 318.34 euro per MWh, while the minimums may stay above 290 euro per MWh.
Across the region, different countries show varying price levels: in France, the MWh price hovers around 302.6 euro; in Germany, about 274.3 euro; and in the United Kingdom, roughly 186.33 pounds per MWh (about 216.5 euro at current exchange rates). Portugal, when the Iberian gas cap applies under the Iberian exception, aligns with Spain’s price when sharing the market.
Auction outcomes and setup
Based on the wholesale-auction results that determine the price for the next day, electricity costs are expected to be around 8.2% lower, at about 137.59 euro per MWh, versus 149.86 euro on the current day.
According to time-zone patterns, the peak price is likely to occur between 11:00 and 12:00, with a pay rate around 191.52 euro per MWh, while the lowest point could be near 111.7 euro per MWh between 17:00 and 18:00.
These figures reflect the cost adjustments for gas-powered plants, which vary by volume and system price, and are ultimately passed through to households and to beneficiary companies.
For tomorrow, the average adjustment is expected to drop notably from recent levels to about 89.31 euro per MWh.
If the data published by the Iberian Electricity Market Operator (OMIE) is considered within an hour of setting the pool price, the MWh cost could fall roughly 17% from the 273.43 euro level including adjustments observed this Thursday, signaling a potential easing in consumer charges and market stress.
Sources: OMIE price publications and market updates provided for transparency in day-ahead pricing and associated adjustments (OMIE, 2024).