The price of electricity rises this Monday by 31.3%, to 229.59 euros/MWh

For the first time, the price of electricity will be higher than what consumers would pay if the ‘Iberian exception’ mechanism did not exist

Oct. 9 () –

The average price of electricity for regulated rate customers linked to the wholesale market rose 31.3% this Monday compared to this Sunday, to 229.59 euros/MWh, according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.

This price is the result of adding the average of the auction in the wholesale market to the compensation that the demand will pay to the combined cycle plants for the application of the ‘Iberian exception’ to cap the price of gas for the generation of electricity.

In the auction, the average price of electricity in the wholesale market – the so-called ‘pool’ – stands at 163.92 euros/MWh for this Monday. The maximum price will be registered between 8:00 p.m. and 9:00 p.m., with 270 euros/MWh, while the minimum for the day, of 102.84 euros/MWh, will be between 04:00 and 05:00.

To this price of the ‘pool’ is added the compensation of 65.67 euros/MWh to the gas companies that has to be paid by the consumers who benefit from the measure, the consumers of the regulated rate (PVPC) or those who, despite being in the free market, they have an indexed rate.

0.4% MORE THAN WITHOUT APPLYING THE MEASURE

For the first time, the circumstance that the price of electricity will be higher tomorrow than what consumers would pay if the ‘Iberian exception’ mechanism did not exist.

Specifically, if this mechanism were not applied to cap the price of gas for electricity generation, the price of electricity in Spain would be an average of 228.52 euros/MWh, which is 1.07 euros/MWh less than with the compensation for customers of the regulated rate, who will thus pay 0.4% more on average.

The ‘Iberian mechanism’, which came into force on June 15, limits the price of gas for electricity generation to an average of 48.8 euros per MWh over a period of twelve months, thus covering the coming winter, a period in which which energy prices are more expensive.

Specifically, the ‘Iberian exception’ sets a path for natural gas for electricity generation at a price of 40 euros/MWh in the initial six months, and subsequently, a monthly increase of five euros/MWh until the end of the measure .

The Ministry for the Ecological Transition and the Demographic Challenge has released to public information a proposal for a Royal Decree to reduce the volatility of the regulated rate, the so-called PVPC, in order to provide greater stability to a rate that has been particularly impacted due to the volatility of the electricity market in the last year, giving greater weight to references to futures markets, which will grow progressively until they represent 55% in 2025.

Specifically, the proposal proposes incorporating into the formula for calculating the PVPC – contracted by the owners of some nine million supply points, 35% of the country – a basket of medium and long-term prices to avoid strong fluctuations, without lose short-term price references that encourage savings and efficient consumption.