Light hours 2022
The price of electricity falls 21% this Saturday, to 189.3 euros/MWh
The average price of electricity for regulated rate customers linked to the wholesale market will fall 21.1% on Saturday compared to this Friday, to 189.3 euros/MWh, according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.
This price is the result of adding the average of the auction in the wholesale market to the compensation that the demand will pay to the combined cycle plants for the application of the ‘Iberian exception’ to cap the price of gas for the generation of electricity.
In the auction, the average price of electricity in the wholesale market – the so-called ‘pool’ – stands for this Saturday at 119.31 euros/MWh. The maximum price will be registered between 10:00 p.m. and 11:00 p.m., with 190.01 euros/MWh, while the minimum for the day, of 81.49 euros/MWh, will occur between 1:00 p.m. and 2:00 p.m.
To this price of the ‘pool’ is added the compensation of 69.99 euros/MWh to the gas companies that has to be paid by the consumers who benefit from the measure, the consumers of the regulated tariff (PVPC) or those who, despite being in the free market, they have an indexed rate.
7.8% less than without applying the measure
In the absence of the ‘Iberian exception’ mechanism to limit the price of gas for electricity generation, the price of electricity in Spain would be on average around 205.36 euros/MWh, which is 16 euros/MWh more than with compensation for regulated rate customers, who will thus pay 7.8% less on average.
The ‘Iberian mechanism’, which came into force on June 15, limits the price of gas for electricity generation to an average of 48.8 euros per MWh over a period of twelve months, thus covering the coming winter, a period in which 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 initial six months, and subsequently, a monthly increase of five euros/MWh until the end of the measure .
The Ministry for the Ecological Transition and the Demographic Challenge has released to public information a proposal for a Royal Decree to reduce the volatility of the regulated rate, the so-called PVPC, in order to provide greater stability to a rate that has been particularly impacted due to the volatility of the electricity market in the last year, giving greater weight to references to futures markets, which will grow progressively until they represent 55% in 2025.
Specifically, the proposal proposes incorporating into the formula for calculating the PVPC – contracted by the owners of some nine million supply points, 35% of the country – a basket of medium and long-term prices to avoid strong fluctuations, without lose short-term price references that encourage savings and efficient consumption.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.