The average price of electricity for regulated rate customers linked to the wholesale market will rise this Sunday to 67.22 euros per megawatt hour (MWh), which is 67.71% more compared to 40.08 euros/ MWh this Saturday.
In the auction, the average price of light in the wholesale market -the so-called ‘pool’- will stand this Sunday at 68.41 euros/MWh. The minimum price, of 36.45 euros/MWh, will be given between 11:00 a.m. and 12:00 p.m., while the maximum price will be recorded between 7:00 p.m. and 8:00 p.m., when it will be 178.58 euros/MWh.
Compensation to gas companies
Compensation for gas companies is added to this pool price, which must be paid by consumers who are beneficiaries of the measure, consumers of the regulated tariff (PVPC) or those who, despite being on the free market, They have an indexed rate, which for this Sunday will be -1.19 euros/MWh. 16.33% less than without applying the Iberian exception.
In the absence of the ‘Iberian exception’ mechanism to cap the price of gas for electricity generation, the price of electricity in Spain would be around 80.34 euros/MWh on average, which means 13.12 euros/MWh more than with the compensation for customers of the regulated rate, who will thus pay 16.33% less 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 for a period of twelve months, thus covering next winter, a period in which energy prices are more expensive. Specifically, the ‘Iberian exception’ sets a path for natural gas for electricity generation from 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 . EXTENSION OF THE IBERIAN EXCEPTION
The Spanish Executive wants to extend the ‘Iberian exception’ at least until the end of 2024 with a cap similar to the current one, of between 45 and 50 euros per megawatt hour (MWh) and has requested this from Brussels. However, the European Commission has informed Spain and Portugal that the extension of the ‘Iberian exception’ cannot go beyond December 2023, the date on which the time frame for support initiatives for the war in Ukraine expires, Therefore, as long as the European Union (EU) does not modify it, the extension of the mechanism must abide by it.
The Third Vice President and Minister for Ecological Transition, Teresa Ribera, explained that in the event of such a scenario, there is the possibility that the temporary framework of aid for the war in Ukraine will be extended and also allow an extension of the Iberian solution. beyond December.
It is also possible that the ‘Iberian exception’ will cease to be necessary if during the Spanish Presidency of the Council, from July to December 2023, the reform of the electricity market is agreed, for which the Spanish Government has already sent its proposal.