The wholesale price of electricity is set to average 200.62 euro per megawatt hour this Monday, according to data from the Iberian Energy Market Operator and compiled by Europa Press. In plain terms, the day’s mean price rises to 200.62 euro per MWh, up about 20 percent from Sunday’s 167.06 euro per MWh and roughly five euros higher than Monday of last week.
The peak price for June 13 is expected between 21:00 and 22:00, with the day’s high near 238.40 euro per MWh and a low around 160.5 euro per MWh during the early hours from 03:00 to 04:00. Compared with a year ago, the Monday average is about 153.31 percent higher than the 79.20 euro per MWh recorded on June 13, 2021.
Pool prices directly influence the regulated PVPC rate, which covers roughly 11 million households in the country and provides a reference for the 17 million or so customers who buy on the free market. In 2021 the National Markets and Competition Commission noted that about 1.25 million people moved from PVPC to a fixed price in the free market as part of the energy price spike.
Mid May brought the Official State Gazette’s Royal Decree, which outlines a mechanism to cap gas costs for electricity generation at an average of 48.8 euros per MWh over a year. This cap shapes the energy price for the coming winter as well. Brussels gave its blessing to the plan on Wednesday, and the Ecological Transition ministry signaled its plan to implement it the following day.
The best way to reduce electricity bills without cutting comfort is a topic many households seek to understand as prices move higher. From June 15, the Iberian exception will come into play, affecting the market auction on Tuesday, June 14 and the settlement on Wednesday, June 15. The government estimates a notable impact on bills: for regulated PVPC customers, a discount of about 15.3 percent is expected over the next year under the gas generation cap. For industrial users exposed to the spot price, price relief is projected to range from 18 to 20 percent in the first month, with additional savings in subsequent months.
What it means to separate power costs from gas costs
Electricity prices are driven by multiple forces in the market, and the separation between electricity and gas costs helps explain price movements. A calculator is available to show the price per kilowatt hour for any device, letting consumers estimate bills quickly by device.
Stability in the market since the surge
When the Ukraine conflict began on February 24, prices in the wholesale market stood at 205.6 euro per MWh. Since then there has been a daily rise, with a peak reached on March 8 at a record high around 544.98 euro per MWh. After a volatile period, prices have hovered near 250 euro per MWh and recently slipped below 230 euro per MWh, signaling a gradual cooling from the peak. A look back shows March was the most expensive month in history, with an average above 283 euro per MWh and a notable deviation from December 2021 levels.
Fresh electricity tariffs
Electric wholesalers influence the PVPC, the price benchmark for roughly 11 million consumers. The ongoing conflict in Europe and Russia’s energy role have the potential to push prices higher, particularly for natural gas used in power generation. To cushion families, the government extended the value-added tax relief on electricity bills until late June. The broader Europe-wide rise in energy costs is tied to higher international gas prices and the impact of emissions trading on CO2 allowances.
Saving more than 500 euros a year on the bill
The government extended electricity tax relief to help households absorb the price rise for the next four months. This period also reflects global price dynamics driven by international markets and the gas used in modern combined cycle plants, coupled with CO2 price shifts. The energy tension in Europe remains shaped in part by the war in the two former Soviet states and the resulting shifts in gas supply, with EU sanctions influencing Russian energy shipments.
2021 set a record as the most expensive year for electricity
The year closed with unusually high averages, driven by the market surge in the second half of the year. The daily market average for January 2021 stood around 201.72 euro per MWh, reflecting a sharp rise from the prior year and highlighting how current dynamics compare with historic levels. The government extended the tax relief on electricity for a further period to soften the impact on consumers, including extending the VAT reduction from 21 percent to 10 percent and lowering the special electricity tax, while the production tax remains temporarily suspended for some sectors.