The price of electricity shows a sharp fall to its lowest level on Wednesday. There is a 30% drop from Tuesday’s price, to 80.5 euros per megawatt-hour MWh. This is the lowest price so far this year.
Moreover, the price for consumers with the regulated tariff, known as PVPC, will be the lowest since the ‘Iberian exception’ took effect in mid-June. Electricity on Wednesday has not been this cheap since October last year. On 21 October 2021, Spaniards paid €79/MWh.
Cheapest and most expensive hour
At the wholesale market auction, the pool price stood at €81.71/MWh on Wednesday. Between 9.00 pm and 10.00 pm, electricity is the most expensive, at €136.74/MWh; the cheapest hour is between 3.00 pm and 4.00 pm, at €48.37/MWh.
On top of this pool price comes the compensation for the gas companies. This is paid by consumers who benefit from the ‘Iberian measure‘. These are the consumers who pay a regulated tariff or who, although buying on the free market, have an indexed tariff. The latter showed a negative balance of €1.27/MWh on Wednesday, the first time since the mechanism existed.
What would the price be without Iberian mechanism?
Without this mechanism, which limits the price of gas for electricity generation, the wholesale price would be €84.40/MWh, i.e. only €4 more, according to data from the Iberian electricity market operator (OMIE) and the Iberian gas market (Mibgas).
That is almost €4/MWh more than with the compensation for customers with a regulated tariff. They pay an average of 4.68% less.
The ‘Iberian mechanism’, which came into force on 15 June, limits the gas price for electricity generation to an average of €48.80/MWh for a 12-month period. This means the price will cover the coming winter, a period when energy prices are higher. In the first six months, the average was still €40.
