The average electricity price in the wholesale market rose by 3.48% this Tuesday compared with Monday, staying above 200 euro per megawatt hour (MWh) for a second straight day.
Special, notable price levels show Tuesday settling at 213.82 euro/MWh, according to data from the Iberian Energy Market Operator (OMIE) and collected by Europa Press. The figure is roughly seven euros higher than Monday’s 206.62 euro/MWh.
With Tuesday’s figures, May closes with an average of 187.12 euro/MWh, marking it as the eighth most expensive month in the historical series that began in 1998.
For context, May 2022 averaged 178.78 euro/MWh, which is about 67.12 euro/MWh lower than this year’s May at 187.12 euro/MWh.
The peak price for Tuesday is forecast at 247.77 euro/MWh between 07:00 and 08:00, while a minimum of 180.18 euro/MWh is expected between 15:00 and 17:00.
Compared with a year earlier, the average price for this Tuesday is forecast to be 142.76% higher than May 31, 2021, when it stood at 88.08 euro/MWh.
Pool prices directly influence the regulated PVPC rate, which covers about 11 million households in the country and serves as a reference for the broader market that many consumers choose to leave. In 2021, the National Markets and Competition Commission (CNMC) reported that roughly 1.25 million people moved from PVPC to a fixed-rate free-market option amid the ongoing energy price rally.
Gas costs are about 600 million higher in Spain than in Portugal
On 14 May, the Official State Gazette (BOE) published a Royal Decree outlining a mechanism to cap gas prices for electricity generation at an average of 48.8 euro per MWh over a 12-month window, covering the next winter when energy costs tend to spike.
Although the decree has been issued, its formal implementation awaits Brussels’ approval and will be initiated through the Ecological Transition order. Industry leader Reyes Maroto expects Brussels to authorize the mechanism within the week.
The calculation foresees limiting the discount for domestic consumers on the PVPC rate to about 15.3% during the 12-month rollout. Europa Press’ impact report accompanying the decree notes the approved ceiling for gas-powered electricity generation.
For industrial users exposed to spot prices, the government estimates a bill reduction of 18% to 20% in the first month of the mechanism, and about 13% to 15% in the latter months, depending on market conditions.
Even so, Teresa Ribera, minister for the Ecological Transition and Demographic Challenge, acknowledged some uncertainty about the exact decline in electricity prices once the gas cap takes effect, while maintaining a forecast range of 15% to 20%.
Under the gas ceiling, applied by both Spain and Portugal, Spanish consumers may incur roughly 600 million euros more costs than their Portuguese counterparts according to industry forecasts provided to Europa Press.
This outcome partly stems from the longer-term extension of electricity futures contracts in Spain and the subsequent sector-wide implications and clarifications that follow.