March was a good month for energy markets (electricity, gas and oil) in Spain as prices fell sharply compared to previous periods.
For electricity, the average wholesale market price in March was €88.31 per megawatt-hour (MWh) in Spain. That is 68.8% lower than in March 2022, according to calculations by the Association of Large Energy Consumers (Aege).
This price is 13.8% lower than in Germany and 21.1% lower than in France. Compared to February, the average price in March in Spain was even 33.8% lower. Considering the development so far in 2023 and the quotations of future prices until the end of the year, the estimated average price of the Spanish electricity market is now €112.15/MWh. That is 33% lower than in 2022, 9.5% cheaper than the German market and 31.9% lower than the French market.
However, Aege points out that large industries in France and Germany buy their electricity with contracts that are more competitive than the price of their electricity markets. In France, for instance, they enjoy the so-called ARENH tariff, at €42/MWh.
What caused prices to fall?
The lower electricity prices in March were partly due to lower gas prices, which fell to €44.5/MWh. The sharp fall meant that on no single day in March was it necessary to activate the so-called Iberian mechanism. The price always remained below €55/MWh. That was the maximum price set by the government for March.
First full month without a gas cap
In October, Spain, with permission from Brussels, set a ceiling on the price of gas used by thermal power plants in Spain. The difference with the gas price, set in the Mibgas, has to be financed by consumers paying the daily market price . This daily compensation for gas adjustment has been zero (0.0 €/MWh) throughout March.
Good account outlook in March
The reduction in the electricity price affects the electricity bill in March. For an average consumer on the regulated tariff (PVPC), it will be the lowest in the past 25 months, after January. This is due to the fall in natural gas prices and increased renewable energy production. Thus, the bill for March is estimated at €53.6 for an average consumer on the regulated market, with a contracted power of 4.4 kW and a monthly consumption of 250 kWh.
