The average price of electricity for customers at the regulated tariff linked to the wholesale market will fall this Tuesday by a slight 0.43% compared to Monday, up to 213.83 euros per megawatt hour (MWh), according to provisional data from the Iberian Energy Market Operator (OMIE). 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’ gas price cap for electricity production.
At auction, the average price of electricity on the wholesale market – the so-called “pool” – amounts to 142.35 euros/MWh on Tuesday. To this ‘pool’ price is added the compensation of 71.48 euros/MWh to the gas companies which must be paid by the consumers who benefit from the measure, the consumers of the regulated tariff (PVPC) or those who, although being on the free market, they have an indexed rate.
The price maximum will be recorded between 10 p.m. and 11 p.m. with 182.49 euros/MWh, while the Minimum for the day, of 118.49 euros/MWh, took place between 03:00 and 04:00.
19.93% less than without applying the measure
In the absence of the “Iberian exception” mechanism to cap the price of gas for electricity production, the price of electricity in Spain would have been on average around 267.06 euros/MWh, which represents 53.23 euros/MWh more than with compensation for regulated tariff customers, who will thus pay around 19.93% less on average.
Compared to a year ago, the price of electricity for customers of the regulated tariff on Tuesday is 116.42% higher compared to 98.8 euros/MWh on July 19, 2021.
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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.
Specifically, the “Iberian exception” sets a trajectory for natural gas for electricity generation at a price of 40 euros/MWh in the first six months, then a monthly increase of five euros/MWh until the end of the measure.