The price of electricity drops 16% this Friday, to 111.69 euros/MWh

MADRID, 24 Ago.

The price of electricity drops 16% this Friday, to 111.69 euros/MWh


The average price of electricity for regulated rate customers linked to the wholesale market will fall on Friday, August 25, by 15.96% compared to this Thursday, to 111.69 euros per megawatt hour (MWh).

By time slots, the maximum price, of 140.61 euros/MWh, will be recorded between 9:00 p.m. and 10:00 p.m., while the minimum price will be between 4:00 p.m. and 6:00 p.m., with 91.33 euros/MWh, according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.

In this way, the price of electricity will thus continue to fall for the second consecutive day, after last Wednesday its highest level of the summer for one day and the maximum since the beginning of March, with 134.94 euros/MWh.

Despite these decreases in the last two days, electricity prices remain at high levels compared to recent months due to the rise in natural gas prices in August and demand, in the midst of a heat wave , the fourth so far this summer.

In this sense, sources from the employers' association Aelec -made up of the electric companies Iberdrola, Endesa and EDP Spain- pointed out that this increase in the price of electricity in the wholesale market is, fundamentally, a direct consequence of the increase in gas prices by more than 40% during the current month of August.

However, after the evolution of the retail market in 2022, they highlighted that "a vast majority of customers are covered by fixed price rates or flat rates." Specifically, 70% of customers have contracts in the free market.

Thus, they added that the volatility in electricity prices due to the rise in gas and, to a lesser extent, CO2, as well as short-term aspects such as increases in average temperatures, "does not affect the majority of customers with tariffs fixed price or flat rates", and stressed that, despite this increase, prices "remain far from those reached last summer when the Russian invasion of Ukraine caused prices to reach their all-time high".

In these first 24 days of the month, the electricity market average is above 96.4 euros/MWh, compared to the 154.89 euros/MWh registered in August 2022.

To this average price of the 'pool' would be added the compensation to the gas companies, which must be paid by the consumers who are beneficiaries of the measure, the consumers of the regulated tariff (PVPC) or those who, despite being in the free market , have an indexed rate, but which is again at 0 euros/MWh, a situation that has been repeated since February 27.

The so-called 'Iberian exception' was extended until December 31, after the agreement reached by Spain and Portugal with the European Commission.

Thus, it lasted seven months, until the end of this year, and it was not ruled out that it could last longer if said framework was also extended.

Specifically, the agreement not only represented an extension of the Iberian exception that was already applied, but also implied some adjustments to accommodate it, such as the price reference, which until then had increased by five euros per month, and became softer. .

In the original agreement, the aforementioned reference price for gas had an average value of 48.8 euros/MWh: it was 40 euros/MWh for six months, rising 5 euros/MWh every month thereafter. It increases by 1.1 euros/MWh since last April, to conclude at 65 euros/MWh.

Currently, the mechanism has had no effect on the marginal matching processes in the wholesale markets since the end of February due to the fall in the price of natural gas below the thresholds set for its application, but, if necessary, the extension will allow the maintenance of a reasonable price, not so dependent on the evolution of natural gas.