The wholesale electricity price this Monday stands at 206.62 euro per MWh, marking a rise from yesterday and continuing a trend of prices above the 200 euro MWh threshold after nine days below it. Market data from the Iberian Energy Market Operator shows the day starting with a marked increase as suppliers adjust to evolving conditions in the energy sector.
According to OMIE, today’s price is about 45 euros higher than the 161.84 euro per MWh recorded yesterday, reflecting ongoing volatility in the market and the influence of broader European energy dynamics.
The day’s maximum price reaches 250.20 euro per MWh between 21:00 and 22:00, while the lowest price is 169 euro per MWh, recorded between 16:00 and 17:00 as demand and supply fluctuate across the 24 hour cycle.
Compared with the previous year, the average price for this Monday is significantly higher, reflecting a jump from 71.93 euro per MWh on 30 May 2021 to levels around 187.25 percent above that figure in the current period.
Pool prices have a direct impact on the regulated tariff known as PVPC, which covers roughly 11 million households and serves as a benchmark for the remaining 17 million households contracting in the free market. This pricing structure remains a central reference in the Spanish energy market and influences consumer costs through the PVPC framework.
The National Markets and Competition Commission has noted that in 2021 about 1.25 million people moved from PVPC to a fixed-price free-market rate as prices rose, illustrating how price movement can drive consumer choice amid rising energy costs.
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The gas cap: 600 million more expensive in Spain than Portugal
On 14 May, the Official State Gazette published a Royal Decree establishing a mechanism to limit the gas price used for electricity generation to an average of 48.8 euro per MWh over a twelve-month period, targeting the upcoming winter when energy costs usually rise.
While issued as a Royal Decree, the mechanism awaits formal approval from Brussels and will be implemented by a ministerial order once finalized.
The government plans to cap the discount for the average PVPC consumer at 15.3 percent over the 12 months following the cap’s application to gas-fed electricity generation. This calculation comes from official decrees reported by Europa Press.
For industrial consumers exposed to spot prices, the government estimates a reduction in bills of around 18 to 20 percent in the first month, with subsequent adjustments in the following periods. The projections reflect the impact of the cap on the gas component of electricity generation.
Teresa Ribera, the minister overseeing ecological transition, acknowledged that there is some uncertainty about the exact fall in electricity prices once the gas cap takes effect, but forecasts suggest a possible range between 15 and 20 percent.
Under the cap, Spain and Portugal aim to share the burden of higher energy costs. Industry estimates suggest Spain could incur higher costs than Portugal during the implementation period due to market specifics and contractual structures.
Analysts note that contract shapes and post hoc market dynamics influence how the cap unfolds across the sector, affecting both households and businesses alike.
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STABILITY SINCE STABILITY
When the invasion of Ukraine began on February 24, wholesale prices stood at 205.6 euro per MWh, and prices have shown a persistent rise with a peak on March 8 reaching a record 544.98 euro per MWh. Since mid-March, prices have hovered around the 250 euro mark, with a downward trend in recent days bringing them below 230 euro in some hours.
This volatility highlights the sensitivity of the market to international events and energy supply dynamics, influencing price movements across the grid.
MARCH THE MOST EXPENSIVE MONTH IN HISTORY
The early days of the invasion coincided with a steep rise in wholesale prices. March saw an average price around 283.30 euro per MWh, with notable spikes that underscored the extraordinary cost pressures against the December 2021 baseline. This period marked one of the most expensive stretches in the history of the market.
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Wholesalers directly influence the PVPC, the regulated tariff that covers about 11 million consumers in Spain and serves as a reference for the remaining 17 million contracting in the open market.
The ongoing Ukrainian conflict and sanctions on energy imports may keep prices elevated, particularly for gas, in the weeks ahead. To soften the impact on consumers, the government extended a tax relief on electricity bills through early summer.
Rising energy prices are driven by higher global energy costs and the increased price of CO2 emission rights, which affect the market price in many hours and influence power generation costs.
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To cushion the price rise, the government extended the VAT relief on electricity bills and reduced the electricity tax. The measures aim to ease the burden for households, while support schemes and market dynamics continue to evolve.
The overall price dynamics in 2021 established a historical benchmark for electricity costs, with the annual price trajectory influenced by the elevated pool prices in the latter half of the year. The daily market price for January 2021 showed notable inflation compared with the prior year and remained higher than typical December levels.
The government also extended the tax relief measures through April 30 to help all consumers facing higher bills. In particular, the VAT cut from 21 percent to 10 percent and the reduced special electricity tax provided relief, though some production-related taxes faced different schedules for renewal.