The average price is up another 4% this Tuesday to 270 Euros/MWh with the combined cycles at full capacity and the gas price points to maxima due to tension with Russia
No session of the newly released Iberian exception with the associated shock. This has happened almost every day since the mechanism that limits the price of gas went into effect. For this Tuesday, and despite this limit, electricity costs rise by 4.6% and are above 270 euros/MWh. This is the highest price in the past week and one of the highest since last March, amid the worst moment of the post-war crisis in Ukraine.
The need to compensate the companies that own combined gas cycles with a price that continues to rise explains this uptrend. The international market is once again stressed by Russia’s sudden cutbacks to Eastern European countries, as well as by the problems arising at one of the major US gas plants on the east coast, which served as the starting point for transporting methane tankers to Europe. The concurrence of all these circumstances makes it necessary to make a correction of 122 euros/MWh for this Tuesday just to pay the gas compensation; figure that corresponds to the 148 euro/MWh in which the electricity price is fixed in the daily ‘pool’.
The more than 270 euros/MWh represent another jug of cold water for consumers in the regulated market, the first to expect a substantial cut in their bills in the coming month, with the start of the Iberian cap on gas. For now, the average price of electricity for the first six days with the system in operation is around €240/MWh, above the €187 it closed in May or €191 in April, although lower than the record €283 in March. .
Without the ‘Iberian exception’ mechanism, the electricity price in Spain would have been on average about 286 euros/MWh, which is about 16 euros/MWh more than with the compensation for customers of the regulated tariff, which will therefore be about 5 euros on average. pay .6% less.
Before this Monday, the average price of electricity for regulated tariff customers connected to the wholesale market had already increased by 45.6% compared to this Sunday, to 258.68 euros/MWh. This increase comes after two consecutive days of declines that coincided with the slump in demand over the weekend and the end of the heat wave.
The Iberian mechanism, which was finally given the green light by Brussels last week, limits the price of gas for electricity generation to an average of 48.8 euros per MWh over a period of twelve months and thus covers the coming winter, a period in which energy prices are more expensive.
Specifically, the ‘Iberian exception’ sets a path for natural gas for electricity generation at a price of 40 euros/MWh in the first six months, followed by a monthly increase of 5 euros/MWh until the end of the measure.
In its calculations, the government has limited the reduction of the receipt for the average electricity consumer subject to the regulated PVPC rate to 15.3% during the 12 months of application of the approved ceiling for the generation of electricity from natural gas.
However, the first results do not provide the estimated records for the time being. The Association of Electric Power Companies (Aelec), which integrates the major companies in the sector, admits that the “complexity” exists in calculating whether the cap on gas meets the government’s goal of reducing the amount of gas, will reach the invoice between 15% and 20% one year ahead. “We will have to see its evolution in the coming weeks,” said Pedro González, the director of the regulatory association.
From Aelec, they point out some of the deformations caused by the mechanism. Certainly in relation to the demand for light that France needs. Exports to that country from Spain have soared since the entry into force of the Iberian leave, the mechanism to limit the price of natural gas for electricity and reduce the electricity bill, thus reducing the effect of the measure by increasing the electricity price in Spain.
González has predicted that these electricity exchanges will skyrocket to a maximum of about 25 terawatt hours (TWh) per year, about 10% of Spain’s demand, quintupling the 5-6 TWh it stood at.
The organization argues that the offer of a lower electricity price from Spain causes the export balance with France to rise to those maximum levels, despite French consumers not paying off-compensation on combined cycles for the measure, which falls on Iberian consumers who benefit from the mechanism.
And they expect that only when the free market contracts are extended, when they expire, will the compensation to be paid to the gas companies for that cap be distributed among more consumers compared to those who are now behind that adjustment, those who have a contract regulated. (PVPC) or linked to the daily ‘pool’.
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.
