The average electricity price for regulated rate customers connected to the wholesale market will fall by 3.47% on Friday compared to this Thursdayuntil the 300.34 euros per megawatt hour (MWh), according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.
Despite this new drop, the price of electricity for customers at regulated tariffs linked to the wholesale market will remain for the fifth consecutive day above 300 euros/MWha figure that had not been reached since last March, the month in which the record for the historical series was recorded and which took place on March 8 with 544.98 euros/MWh.
This week’s high prices explained partly for the hello heat which affects the whole country, which implies higher demand and lower contribution from renewable sources (wind and photovoltaic).
To this are added the supply tensions gas in the context of the Russian invasion of Ukraine and the maintenance of key infrastructure, factors that pushed the Dutch TTF market (a benchmark for Europe in the price of this raw material) to more than 170 euros/MWh, whereas in mid-June it was around 80 euros/MWh.
This price for PVPC customers is the result of adding the average auction price on the wholesale market to the compensation that demand will pay to combined cycle power plants for the application of the “Iberian exception” aimed at cap the price of gas for electricity generation.
At auction, the average price of electricity in the wholesale market –the so-called ‘pool’– is set for this Friday and 147.25 euros/MWh, i.e. approximately 14.97 euros less than today’s price (162.22 euros/MWh).
The Maximum price light for this friday will check in at 10pm.with 184.01 euros/MWh, while the Minimum for the day, 126 euros/MWh, will be given at 12:00 p.m..
At this price of the ‘pool’ the compensation of 153.09 euros/MWh is added to gas companies which must be paid by consumers who benefit from the measure, consumers of the regulated tariff (PVPC) or those who, although on the free market, benefit from an indexed tariff.
11.6% less than without applying the measure
In the absence of the “Iberian exception” mechanism to cap the price of gas for the production of electricity, the price of electricity in Spain It would have been on average around 339.85 euros/MWh, ie around 39.5 euros/MWh more than with the compensation of regulated tariff customers, who will thus pay around 11.6% less on average.
Compared to a year ago, The price of electricity for customers of the regulated tariff this Friday is 244% higher compared to 87.18 euros/MWh on July 15, 2021.
The Iberian mechanism, which entered into force on 15 June, limits the price of gas for electricity production to an average of 48.8 euros per MWh over a period of twelve months, thus covering the coming winter, a period when prices energy are more expensive.
More specifically, the ‘Iberian exception’ sets a trajectory for natural gas for electricity production at a price of 40 euros/MWh in the first six months, then a monthly increase of 5 euros/MWh until the end of the measure.