The average electricity price for households and small businesses under the regulated rate, tied to wholesale market prices, is expected to decline by 15.13% this Friday compared with Thursday. This drop would bring the price below 300 euros per megawatt hour (MWh), based on provisional data from the Iberian Energy Market Operator (OMIE) as reported by EP.
In concrete terms, the Friday average is forecast at 277.82 euros per MWh, which is 49.51 euros lower than Thursday. This figure reflects the combined effect of the wholesale market price and the additional compensation charged to end users for the Iberian exemption that limits gas costs in electricity generation.
During the auction, the wholesale market price, known as the pool, is expected to average 171.46 euros per MWh for Friday. The intraday dynamics show the daily maximum around 21:00 to 22:00, reaching about 202.28 euros per MWh, while the minimum near 16:00 to 17:00 is around 140 euros per MWh.
On top of this pool price, a compensation of 106.36 euros per MWh is added to reflect benefits under the Iberian exemption for consumers on the regulated rate (PVPC) or for gas companies, even though many of these entities operate under a linked or indexed rate in the free market.
27.44% less
Without the Iberian exemption mechanism that caps gas costs for electricity generation, the average electricity price in Spain would hover around 382.9 euros per MWh. The exemption adds a compensating factor of roughly 105.08 euros per MWh, resulting in regulated-rate customers paying an average that is about 27.44% lower.
The Iberian mechanism, which began on 15 June, sets a cap on the gas price used for electricity generation at an average of 48.8 euros per MWh over a twelve-month period. This stabilizing measure is designed to cushion households and businesses through periods of higher energy costs, including the approaching winter.
Specifically, the Iberian exemption is structured as a natural gas pricing pathway for the next generation of electricity. In the initial six months, the price target is about 40 euros per MWh, with a planned monthly increase of five euros per MWh thereafter until the measure ends.
Teresa Ribera, the third vice-president and minister for Ecological Transition, has noted that the measure has already saved families and companies around 2.3 billion euros in the first three months of its application. This figure illustrates the policy’s impact on household energy bills and business operating costs as the market absorbs the temporary relief while long-term price formation adjustments continue. The broader objective remains to reduce exposure to volatile wholesale prices while maintaining reliability and supply security across the Iberian Peninsula.