The regulated electricity price tied to the wholesale market is set to fall on Saturday, July 1, marking a drop of 37.5% from Friday and settling at 60.34 euros per megawatt hour (MWh).
July opens with the lowest electricity price seen in over a month. The market saw 31.52 euros per MWh on May 21. Based on local time zones, a zero cost window is expected between 15:00 and 17:00 when energy will not incur charges, while the day’s highest rate is anticipated between 22:00 and 23:00, reaching 120.2 euros per MWh in the evening hours.
In June, the average price of the electricity pool stood at 93 euros per MWh, compared with 169.63 euros per MWh in the same month last year. This pool average will be augmented by the compensation paid to gas suppliers. Consumers under the regulated rate (PVPC) or those with indexed tariffs, even if they operate in the free market, face a zero euro per MWh charge during this period. This zero-charge regime has been in place since February 27 and continues to apply to eligible customers.
Following negotiations between Spain, Portugal, and the European Commission, the Iberian exemption regime has been extended to December 31. The extension covers seven additional months and signals the possibility of further prolongation should conditions allow. The extension not only preserves the existing exemption but also introduces refinements to accommodate it, including an adjusted price reference that has softened after a monthly rise of five euros.
The reference price used in the initial contract averaged 48.8 euros per MWh for gas. It held at 40 euros per MWh for six months before rising by five euros per MWh each month. The current trajectory projects a further increase of 1.1 euros per MWh compared with last April, bringing the reference to 65 euros per MWh.
The mechanism has not disrupted marginal matching processes in wholesale markets since the end of February because natural gas prices have fallen below the thresholds that would trigger major changes. Nevertheless, the extension keeps a safety margin that helps preserve price stability, ensuring that prices remain reasonable and not overly dependent on fluctuations in gas markets. This approach aims to maintain affordability while allowing for gradual adjustments as market conditions evolve.