The average price per megawatt hour goes from 214 euros to 165 euros, the lowest level since May 29 last year
First day of application of the ‘Iberian exception’ and first decrease in the price of electricity. The first electricity auction following the entry into force of the gas price cap saw a daily drop of nearly 23% in the wholesale electricity market on Tuesday. The average price per megawatt hour (MWh) goes from an average of 214 euros this Tuesday to 165 euros, the lowest level since May 29, according to data from the Iberian Energy Market Operator (OMIE).
The most expensive part of the day is between noon and one in the morning, when it will be over $194 per megawatt hour (MWh), while the least taxing part will be between three and four in the afternoon, when it’s around 144 euros. For example, there will be no time slot that is higher than 200 euros/MWh throughout the day.
The mechanism, which was finally given the green light from Brussels last week, limits the price of gas for electricity generation to an average of 48.8 euros per MWh over a twelve-month period and thus covers the coming winter, a period in which those energy prices are more expensive.
Specifically, the ‘Iberian exception’ sets a path for natural gas to generate electricity in the first six months at a price of 40 euros/MWh, compared to about 80 euros/MWh against which natural gas is quoted in Mibgas, and then a monthly increase from five euros/MWh until the end of the measure.
The government limits in its calculations to 15.3% the reduction to the average electricity consumer subject to the regulated PVPC rate during the 12 months of application of the approved ceiling for the generation of electricity from natural gas, according to the report of impact that the decree and to which Europa Press has had access.
For the industrial consumer, who is fully exposed to the spot price, the government estimates a cut of 18% to 20%, with the first month of the mechanism fluctuating between 15% and 17%, and finally between 13% and 15%.
Despite this sharp drop in the ‘pool’ compared to a year ago, the average price of electricity for this Wednesday will be 82% more expensive than the 90.95 euros/MWh of 15 June 2021.
The prices of the ‘pool’ have a direct impact on the regulated tariff – the so-called PVPC – which covers nearly 11 million households in the country, and serves as a reference for the other 17 million who have contracted their supply on the free market.
In fact, the National Commission on Markets and Competition (CNMC) verified that by 2021, as part of the upward energy spiral, about 1.25 million people have switched from the PVPC to a fixed-price free-market tariff.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
