The average electricity price for regulated tariff customers linked to the wholesale market, it will fall by 0.43% on Tuesday compared to yesterday, Monday, up to 213.83 euro per megawatt hour (MWh), according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.
This price for PVPC customers is the result of add the average wholesale market auction price the compensation that demand will pay to combined cycle power plants for the application of the “Iberian exception” to capping the price of gas for the production of electricity.
The high prices this week are partly explained by the hello heat which affects the whole country, implying a higher demand and a lower contribution from renewable sources (wind and photovoltaic).
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 for this Tuesday. The maximum price will be found between 10 p.m. and 11 p.m., with 182.49 euros/MWhwhile the minimum for the day, of 118.49 euros/MWh, will be given between 03:00 and 04:00.
To this price of the ‘swimming pool’ is added compensation of 71.48 euros/MWh 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.
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.
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.
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MARCH, THE MOST EXPENSIVE MONTH IN HISTORY
On February 24, when the Russian invasion of Ukraine began, the wholesale market price was 205.6 euros/MWh and since then there has been a daily rise in the price which peaked on March 8, when the price was at the all-time high of 544.98 euros/MWh.
In this context, the average wholesale market price in March was around 283.30 euros/MWh, some 55 euros more than the average for December 2021, which had been the most expensive month of the month until then. history with 239 euros/MWh.
The bone Wholesalers have a direct impact on the regulated tariff or PVPC, to which almost 11 million consumers in Spain are covered, and serve as a reference for the other 17 million who contract their supply on the free market.
El conflicto militar entre Ucrania y Rusia podría provocar en las próximas semanas un encarecimiento aún mayor de los precios de la energía, especialmente en el caso del gas, debido al riesgo de que las imports rusas hacia Europa se vean frenadas por las sanciones impuestas por la European Union.
To cushion the impact of higher electricity prices on consumers, the government has extended until June 30 the tax reduction on taxes levied on electricity bills.
The price escalation affecting much of Europe is due, among other factors, to the higher cost of gas on international markets, which is used in combined cycle power plants and sets the market price most hours, and the increase in the value of carbon dioxide (CO2) emission rights.
To cushion the impact of higher electricity prices on consumers, the government extended the tax reduction on taxes levied on electricity bills in the first four months.
The price escalation affecting much of Europe is due, among other factors, to the higher cost of gas on international markets, which is used in combined cycle power plants and sets the market price most hours, and the increase in the value of carbon dioxide (CO2) emission rights.
The military conflict between the two ex-Soviet countries could cause an even sharper rise in energy prices in the coming weeks, particularly in the case of gas, due to the risk that Russian imports to Europe will be slowed down by the sanctions imposed by the European Union.