The first electricity tender under the cap on gas at 40 euros per megawatt hour concluded with a price of 165 euros per MWh, which was 23% below the higher end of the initial expectation. In the wholesale market on Tuesday, electricity stood at 214 euros per MWh, showing a 16% drop from the 14‑day monthly average of 197.50. Yet this figure does not tell the whole story, because final charges to households will include additional components. A compensation mechanism for combined cycle plants that participated in the programming and a discount for energy sold to France add up to a total of 59.27 euros per MWh. Taking these adjustments into account, the overall average price lands at 224 euros per MWh, about 10 euros higher than Tuesday’s level and roughly 25 euros higher than the early two weeks reported by the Iberian Energy Market Operator (OMIE).
The first tender under the system that defines what analysts call the Iberian exception was celebrated with typical conditions. OMIE sources indicate that price information is published at regular intervals, preserving the transparency expected in this market. The bidding process follows the established practice, with the notable exception that gas‑fired plants are not allowed to bid in certain windows. When the price of natural gas exceeds 40 euros per MWh, the market dynamics shift so that the cost basis for this fuel remains a dominant factor. In the Iberian stockpile, the price for gas hovered around 78.75 euros per MWh, while the auction itself produced a publishable price of 165 euros per MWh as reported by OMIE, illustrating how fuel costs influence the final numbers.
Those gas‑fired generating units, however, must cover the 78.75 euro per MWh gas cost that feeds their production. Consumers ultimately carry the difference between the displayed market price and the actual attic price. The daily adjustment of this compensation depends on the gas offer price and the volume of gas required to run electricity generation, which in turn depends on whether free market contracts are renewed and how many consumers are affected by the mechanism. Even though some users saved on other technologies that previously captured the extra margin, the electricity market rewards all technologies according to the price set by the most expensive plant, which in this case is linked to natural gas costs.
The government had expected that the average price in the first month of implementing the 110‑euro per MWh measure in the wholesale market would settle near 176.60 euros per MWh, a projection tied to a gas quote of 96 MWh. In reality, the wholesale price stayed close to 165 euros per MWh, while the final consumer price reached around 224 euros per MWh, reflecting the combination of market dynamics and regulatory adjustments. This sequence demonstrates how policy targets interact with actual market behavior and how the price path for end users is shaped by both wholesale movements and compensatory mechanisms. [CITE: OMIE]
These developments affect a large share of consumers under a regulated tariff known as the Voluntary Price for Small Consumers (PVPC), which covers about 37 percent of households, while industrial users who obtain energy directly from the market represent around 70 percent of demand. In total, the wholesale market’s movements and the regulatory framework account for roughly 60 percent of the electricity bill, as taxes and fees are reduced and the mix of generation sources evolves with market conditions. The ongoing adjustments illustrate the profound link between gas prices, power plant costs, and the final price paid by households and businesses across the region. [CITE: OMIE]