The average electricity price in the wholesale market is expected to fall this Wednesday by 10.48%, dipping to as low as 186.84 euros per megawatt hour (MWh) on Tuesday before the daily change takes full effect on Wednesday. This shift marks a notable step for consumers tracking the Iberian market and its influence on household bills reported by the Iberian Energy Market Operator (OMIE) and compiled by Europa Press.
Consequently, the pool price this Wednesday is projected to stay below 200 euros per MWh for the first time since last Sunday, representing a reduction of 21.87 euros compared with today’s level (based on OMIE data cited by Europa Press). This development helps explain the direction of the broader energy costs that Canadians and Americans seek to understand when considering wholesale mechanics in comparable markets.
The minimum price for May 11 is forecast to fall between 154.4 euros per MWh with the hourly window 16:00–17:00 showing a range, while the maximum could reach 228.84 euros per MWh during the 08:00–09:00 period. These intraday fluctuations underscore the volatility inherent in electricity markets, even as the overall daily average shows a downward tendency compared with earlier benchmarks.
On a year-on-year basis, the predicted average price for Wednesday would be considerably higher, reflecting a rebound of about 245.68% relative to May 11, 2021, when the market comparison was markedly different. This contrast illustrates how fuel costs and market dynamics can reshape daily pricing in wholesale electricity, a pattern mirrored in many energy economies, including North America when similar drivers are at play.
Pool prices directly influence regulated rates in regions that use a standardized tariff system known in Spain as PVPC, which serves nearly 11 million households and acts as a benchmark for the broader 17 million households that opt for free-market supply. This linkage mirrors how regulated and market-based pricing interact in other regions and can inform readers about how such benchmarks affect monthly household budgets in North American contexts.
In 2021, the National Markets and Competition Commission (CNMC) confirmed that around 1.25 million consumers shifted from PVPC to a fixed-price option in the free market, illustrating how price trends can drive consumer choice during periods of energy cost pressure. This historical shift helps explain ongoing policy discussions about price stability for households and businesses facing rising energy costs in Canada and the United States, where similar dynamics influence market participation.
Iberian exception expected to be confirmed Friday
The government is set to sign off at an extraordinary cabinet meeting next Friday on the Iberian exception, a measure to cap natural gas prices used for electricity generation. If approved, this cap could lower electricity bills by as much as 30%, a point highlighted by government spokesperson and policy minister Isabel Rodriguez on Tuesday. The move aligns with a recent agreement between the governments of Spain and Portugal and the European Commission to limit wholesale gas prices in the Iberian Peninsula’s electricity market, a plan projected to average about 50 euros per MWh over the next year.
Earlier this year, Spain and Portugal finalized terms with the European Commission to stabilize wholesale gas costs across the Iberian grid, a policy intended to cushion consumer bills as global energy markets experience fluctuations. The initiative signals how regional price controls may influence household bills across similar markets, offering a reference point for policymakers and consumers in Canada and the United States evaluating price-amelioration measures.
The government calls an extraordinary cabinet session on Friday to approve the gas cap aimed at reducing electricity costs
As part of the agreement with the Community Manager, the initial gas reference price is projected around 40 euros per MWh, with a target average of 50 euros per MWh over the 12 months in force. This is a broader ceiling than the 30 euros per MWh cap initially proposed by the Spanish and Portuguese authorities, reflecting an adjustment to market expectations and cross-border energy planning.
On March 29, the government also advanced a national plan to address the repercussions of the war in Ukraine. Measures include extending tax relief on electricity bills through June 30, expanding the electricity social bond to cover up to 1.9 million households, and provisions to shield vulnerable consumers from sudden price spikes.
Additionally, a reform to the renewable energy tariff framework was adopted, delivering an 1.8 billion euro reduction in retail electricity charges. The package also extended the gas reduction policy through June 30, aiming to dampen extraordinary profits in the electricity market by widening eligibility to cover energy contracts tied to futures and fixed-price arrangements, provided that the price exceeds 67 euros per MWh.