The average price of electricity for regulated rate customers linked to the wholesale market will drop 11.4% this Sunday compared to Saturday, to 269 euros per megawatt hour (MWh), according to provisional data from the Iberian Energy Market Operator (OMIE).

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 so-called 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 (known as ‘pool’) will be 149.18 euros/MWh for this Sunday. The maximum price will be registered between 10:00 p.m. and 11:00 p.m., with 200 euros/MWh, while the minimum for the day, of 90.40 euros/MWh, will be between 5:00 p.m. and 6:00 p.m.

To this price of the ‘pool’ is added the compensation of 119.83 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.

19.3% less than without the application of the Iberian exception

In the absence of the mechanism of the Iberian exception to cap the price of gas for the generation of electricity, the price of electricity in Spain would be an average of 333.42 euros/MWh, which is about 64.4 euros/MWh more than with the compensation for clients of the regulated rate, who will thus pay 19.3% less on average.

The Iberian mechanism, which entered 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 energy prices are more expensive.

Specifically, the measure 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 mechanism.

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