On Saturday, the average cost for customers on regulated rates connected to the wholesale market is projected to fall to 53.19 euros per megawatt hour (MWh). This represents a drop of 40.57 percent from Friday’s level of 89.5 euros per MWh, a swing that highlights how market dynamics can shift quickly in the energy sector.
In the wholesale market auction, known as the pool, the typical price for electricity this Saturday is expected to be around 53 euro per MWh. The forecast also points to a low of 35 euro between 15:00 and 16:00, while the high is anticipated to reach 80 euro between 12:00 and 01:00. This range reflects daily variations driven by demand, generation mix, and operational constraints across the grid, underscoring the volatile nature of the wholesale market for consumers and suppliers alike.
Additionally, a charge linked to gas company compensation per MWh is added to the pool price. This levy, which applies to consumers who benefit from the measure, affects those on regulated rates (PVPC) as well as those on indexed zero rates, including some in the free market, adding 0.19 euro for each MWh consumed this Saturday. The levy is part of a broader policy framework designed to manage the costs of gas use in electricity generation and to distribute those costs among beneficiaries of the regime.
Without the Iberian exception mechanism that caps the gas price used for electricity generation, the Spanish electricity price would average about 85.38 euros per MWh. Under such a scenario, consumers on the regulated tariff would pay roughly 32.19 euros per MWh less on average, representing a reduction of around 37.7 percent. The mechanism therefore functions as a stabilizing tool, helping to cushion price volatility in the market and providing a measure of predictability for households and businesses during periods of rising energy costs.
The Iberian mechanism, in force since 15 June, sets an average cap on the gas price used to generate electricity at 48.8 euros per MWh over a 12-month period. This framework aims to offer relief during the winter months when energy costs typically rise, while continuing to shield consumers and industry from sharp price spikes. In practical terms, the cap serves as a financial buffer that can translate into steadier electricity bills for households and firms across the region, maintaining affordability and supply reliability even when wholesale prices wiggle upward.
Specifically, the Iberian exemption outlines a staged price path for natural gas used in electricity generation. The price begins at 40 euros per MWh for the first six months and then increases by five euros per MWh each month until the measure ends. This gradual trajectory is designed to provide a predictable transition, allowing consumers and producers to adjust to evolving energy costs without sudden shocks to the wallet or the bottom line.
The Spanish Government has requested that Brussels extend the Iberian exemption, proposing a cap between 45 and 50 euros per MWh and seeking to preserve the current protections at least through the end of 2024 [Attribution: European energy policy briefing]. This request reflects ongoing efforts to balance energy affordability with market stability, ensuring continued protection for households and key sectors as regulatory decisions are revisited in the European arena.