Average electricity price for regulated-rate customers connected to the wholesale market will fall by 23.6 percent on Tuesday, reaching up to 116.49 euro per MWh compared with Monday. This figure comes from provisional data reported by the Iberian Energy Market Operator, OMIE, and compiled by Europa Press. Source: OMIE.
The decline results from combining the wholesale market auction average with the compensation paid by demand to the combined cycle power plants under the Iberian exemption scheme. This mechanism helps cap the gas costs used for electricity generation.
At the auction, the average price in the wholesale market, often called the pool, stands at 107.46 euro per MWh for Tuesday. The highest price during the day is projected at 162.01 euro per MWh between 21:00 and 22:00, while the lowest price is expected to be 47.83 euro per MWh between 16:00 and 17:00.
Compensation is added to the pool price, amounting to 9.03 euro per MWh, and is paid to gas companies and to regulated-rate (PVPC) consumers or those on indexed tariffs who are still in the free market. This compensation is funded by the consumers benefiting from the measure.
9.4% less
If this mechanism did not exist to limit gas costs for electricity generation, the average electricity price in Spain would be about 128.55 euro per MWh. That would be roughly 12 euro per MWh higher than the compensation for regulated-rate customers, meaning an average reduction of about 9.4 percent.
The Iberian mechanism, which began on 15 June, sets a cap on gas prices used for electricity generation. The plan projects an average gas cost of 48.8 euro per MWh over twelve months, safeguarding supplies through the upcoming winter when energy prices tend to rise.
Specifically, the Iberian exemption envisages a pathway for natural gas costs at 40 euro per MWh for electricity generation during the first six months, followed by a gradual increase of 5 euro per MWh each month for the remainder of the measure.
The Ministry of Ecological Transition and Demographic Challenge has publicly proposed a royal decree to reduce volatility in the PVPC, aiming to provide steadier rates for households that rely on this tariff. The plan would increase the weight of futures-market references, which are expected to rise to 55 percent by 2025.
The proposal also suggests including in the PVPC calculation a medium and long-term price basket to smooth out sharp fluctuations. This would be done without losing short-term price signals that encourage saving and efficient energy use. The measure would impact around nine million supply points, representing roughly 35 percent of the country’s electricity consumers.