The wholesale electricity price is set to rise slightly this Friday, edging up by 2.38% from Sunday to sit at 163 euros per megawatt hour (MWh).
For this Monday, the average pool price is projected at 163.13 euro per MWh, about four euros higher than the current level and rising from 159.33 euro per MWh on Sunday, according to data from the Iberian Energy Market Operator sourced by Europa Press.
The highest price expected on Monday occurs between 20:00 and 21:00, at 270.2 euro per MWh, while the lowest price between 15:00 and 16:00 is forecast at 55.1 euro per MWh.
Compared with a year ago, the pool price for this Monday is markedly higher, standing at 213.65% above the level recorded on April 11, 2021 when it reached 52.01 euro per MWh.
Pool prices directly influence the regulated tariff, known as the PVPC, which covers roughly 11 million households in Spain and serves as a benchmark for the other 17 million customers in the free market. The CNMC noted that in 2021 about 1.25 million people switched from PVPC to a fixed-price free-market rate amid an ongoing energy price surge.
On March 29 the government approved a national plan to cushion the impact of the Ukraine conflict. The plan included extending the electricity tax relief until March 30 and widening the electricity social subsidy to reach about 1.9 million beneficiary households.
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30 EURO GAS CAP
Spain and Portugal submitted a preliminary proposal to the European Commission to set a gas reference price of 30 euros per MWh to help lower electricity costs.
Teresa Ribera, the Third Vice-President and Minister for Ecological Transition, clarified that this is a joint proposal, contingent on discussions with European authorities.
Ribera indicated that if the proposal is accepted, the electricity price may be capped within three or four weeks. She urged patience, noting that a careful assessment of technical considerations is necessary for proper implementation.
If this proposal progresses, it would influence pool prices by affecting the daily gas-fired combined-cycle plant offers in the wholesale market, among other effects.
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STABILITY SINCE STABILITY
When the Ukraine invasion began on February 24, wholesale prices stood at 205.6 euro/MWh. Since then there has been a daily ascent, peaking on March 8 at 544.98 euro/MWh. Since March 12, prices hovered around 250 euro/MWh but have tapered, slipping below 230 euro in recent days.
MARCH WILL BE THE MOST EXPENSIVE MONTH IN HISTORY
The price surge began when the Russian invasion started, and by early March it reached a record level of 544.98 euro/MWh. So far in March, the average wholesale price has been around 294 euro/MWh, with February around 239 euro/MWh, marking March as the most expensive month on record and well above December 2021’s average.
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Wholesalers continue to influence the PVPC tariff, which covers about 11 million consumers in Spain and serves as a reference for the 17 million customers who procure supply in the free market. The Ukraine-Russia conflict could push energy prices higher in the coming weeks, particularly for gas, as European imports face potential slowdowns due to sanctions. To soften the impact on households, the government extended the VAT reduction on electricity bills to 30 June. The rise in prices across Europe is partly driven by elevated global gas costs and the price of carbon dioxide emission rights, which shape the wholesale market for most hours.
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To mitigate the rise in electricity costs, the government extended the four-month tax relief on electricity bills. Higher energy prices across Europe reflect international market pressures and higher gas prices used in gas-fired plants and carbon emission costs. The ongoing conflict between traditionally linked economies could push energy prices higher in the weeks ahead, especially for gas as European imports face potential slowdowns from sanctions. In 2021, the electricity market set new records as prices climbed throughout the year. The government extended the tariff tax relief to alleviate the burden on consumers, with VAT reductions and electricity taxes maintained through April. The production tax for companies remained scheduled to end on March 31 for the time being.