MADRID – On Monday, the cost of electricity on the wholesale market rose by 46% to €258.68/megawatt-hour (MWh). The ‘Iberian Exception’ price for Spain and Portugal seems to have little effect on consumers for the time being.
The move by Pedro Sánchez’s government makes the price per MWh €25 cheaper than what would have been paid in Spain without the so-called ‘Iberian Exception’, which came into effect last Tuesday. However, it is hardly noticeable in the average of the first six days. It is only €36 euros below the almost €268.88/MWh that consumers would otherwise have paid.
The association of electricity companies AELEC warned that an increase in exports to France is caused by the gas limit. Therefore, that immediately reduces the effect of the limit.
Tuesday price reaches a new record high since the start of the measure
Today (Tuesday) the costs will hit a new all-time high since Minister Teresa Ribera’s acclaimed measure went into effect. The price will reach €270.16/MWh, according to the latest data from the market authority OMIE. Almost a week after the measure came into effect, that is €16 cheaper than the €286.21/MWh that would have been paid in the Iberian Peninsula if there were no cap on the price of gas for electricity generation.
In addition, the return to productive activity after the weekend will push electricity consumption back up. Such a scenario is also observed in other European countries. Especially in Italy. Here the price was close to €309/MWh on Monday with maximums up to €394.96/MWh. This is evident from data consulted by EFE.
France and United Kingdom
In France, too, the price per MWh will exceed the €300 mark (€303.95) after two days of relative stabilisation. On Wednesday, between 7.00 pm and 8.00 pm, it will be above €354/MWh, with a maximum of €450. In Germany, the price will be around €267 – with a peak of €500 between 8.00 am and 9.00 am. The UK pays £196.19 (that’s about €228.53). In Portugal, the gas limit is also applied due to the so-called “Iberian exception”. Therefore, the same price will be paid as in Spain.
The director of Russia’s largest oil company, Rosneft, Igor Sechin, warned on Sunday that Europe’s “energy suicide” will have long-term consequences in the form of loss of economic potential and competitiveness.
Germany announces additional measures
That same Sunday, Germany, one of the European countries with the greatest dependence on Russian gas, announced additional measures to reduce industrial dependence on this raw material for electricity generation. However, the German government defends that security of supply is currently “guaranteed”. The decision to eventually return to coal is intended to accelerate reserves due to the restriction of gas supplies from Russia.
In addition to the recovery in demand after the weekend and the stabilised temperatures after last week’s heat wave, European energy markets are suffering from the current geopolitical tensions with Russia.
Delivery cuts from Russia continue
The price of TTF natural gas for delivery to the Dutch market in July rose by 1.80% to €124.7/MWh, while the supply cuts from Russian territory continue. Last Monday, the Kremlin conditioned the supply of gas to the European Union until the return of the pumps of the Nord Stream gas pipeline, which are under repair outside the country.