A snapshot of today’s wholesale electricity market in Iberia and Europe
On Wednesday, the wholesale price of electricity is set to rise by 4.7% to 250.16 euros per megawatt hour (MWh). The increase is accompanied by an adjustment charged to beneficiaries, calculated from the auction results in the wholesale market or pool, to support power plants that run on natural gas.
Data from the electricity market operator OMIE and the Iberian Gas Market (Mibgas) show that, once the gas price cap is in effect for electricity production, the wholesale price can be about 61 euros lower than the 311.54 euros per MWh that would prevail without the cap. This creates a notable saving for buyers relative to a scenario without the cap, highlighting how the policy affects pricing in the Iberian market and its neighbors.
Across Europe, electricity prices continue their ascent in major economies, with concerns in Italy and France that average prices could surpass 500 euros per MWh. In Italy, the benchmark for MWh is projected at 526.21 euros, with potential afternoon peaks near 650 euros. In France, the average price is expected around 529.62 euros per MWh, reflecting tight gas supply and high electricity demand during peak hours.
Germany faces a different pressure as it navigates a renewed curtailment of Russian gas via the Nord Stream 1 pipeline. Market observers note a price near 424.49 euros per MWh, while the United Kingdom shows about 307.55 pounds per MWh, equivalent to roughly 363.66 euros depending on the current exchange rate. These dynamics illustrate how gas costs and pipeline flows shape electricity prices across borders.
Portugal participates in a similar pricing framework within its own Iberian market, where the gas cap applies as part of shared market rules known as the Iberian exception. The result is a price environment that mirrors Spain’s, with an integrated approach to managing gas-driven costs for electricity production.
Auction mechanics and price setting
If the calculation includes only the wholesale market results and omits the gas-cap adjustment paid by beneficiaries, electricity prices would rise by about 1.5%, reaching roughly 148.25 euros per MWh. Price fluctuations also follow a daily arc: the highest level typically appears between 21:00 and 22:00, around 164.20 euros per MWh, while the lowest point tends to occur between 03:00 and 04:00, near 125.12 euros per MWh.
Beyond the raw trading figures, the gas-adjustment cost remains a factor since it is allocated to the final consumer. The amount varies with system needs and volume, and it ultimately flows through to households and workplaces as part of the total energy bill. This mechanism helps stabilize the grid by ensuring that gas-powered plants continue to operate when gas prices surge, even as the market seeks efficient balance between supply and demand.
For this Wednesday, the average gas-adjustment component for consumers is estimated at 101.91 euros per MWh. Adding this adjustment to the base wholesale price yields a final average of 250.16 euros per MWh. Compared with the previous year, this represents a substantial rise in overall cost—well over a doubling and marking a dramatic shift in the price landscape faced by residential and commercial electricity users in the region.