The price of electricity rises 2.1% tomorrow and nears 200 euros/MWh

MADRID, 16 (EUROPA PRESS)

The average price of electricity in the wholesale market will rise this Tuesday by 2.1% over Monday's price, again approaching the level of 200 euros per megawatt-hour (MWh).

Specifically, the average pool price for tomorrow will be 199.36 euros/MWh, compared to 195.23 euros today, according to data published by the Iberian Energy Market Operator (OMIE) and collected by Europa Press.

The maximum price of light for this Tuesday will be between 22.00 and 23.00 hours, with 265.88 euros/MWh, while the minimum for the day, of 160.99 euros/MWh, will be recorded between 15.00 and 16.00 hours.

Compared to a year ago, the average electricity price for this Tuesday is 159.5% more expensive than the 76.82 euros/MWh of May 17, 2021.

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Pool prices have a direct impact on the regulated tariff -the so-called PVPC-, to which almost 11 million households in the country are covered, and serve as a reference for the other 17 million that have contracted their supply in the free market.

In fact, the National Commission for Markets and Competition (CNMC) has found that in 2021, as part of the upward spiral of energy, around 1.25 million people switched from the PVPC to a fixed-price free market tariff.

GAS CAP

The Official State Gazette (BOE) has published this Saturday the Royal Decree-Law establishing the mechanism to limit the price of gas for electricity generation to an average of 48.8 euros per megawatt-hour (MWh) for a period of twelve months, thus covering the coming winter, a period in which energy prices are more expensive.

After its approval in the Council of Ministers on Friday, the third vice-president of the Government and Minister for Ecological Transition, Teresa Ribera, pointed out that once the measure comes into force this Saturday and at the expense of the European Commission formally adopting the endorsement of the rule, which could be delayed until "about two weeks", it will mean an immediate improvement for 37% of domestic consumers and 70% for industrial consumers.

In this respect, sources from the Ministry for Ecological Transition specified that the mechanism, in spite of its publication as a Royal Decree-Law, will thus be pending the formal decision of Brussels and the signing of an order by the Minister for its application.

The third vice-president estimated that thanks to this measure the price of the pool will fall by around 38% in its average price, from 210 euros per megawatt hour (MWh) marked during the first quarter of this year to around 130 euros/MWh. Thus, the only electricity that consumers will pay for at gas cost will be that produced by gas-fired power plants.

The measure will thus help to contain the escalation of prices and inflation and, above all, will act as a firewall against the volatility of gas prices derived from the war in Ukraine, it will also facilitate the reform of the regulated tariff -the so-called PVPC-, incorporating price references from the futures markets.

Ribera assured that, once the measure is in force, consumers in the regulated market will notice this relief in the price of electricity "immediately", while for the rest of consumers in the free market it will be "progressive", benefiting when they renew or change, "since their annual review will have the reference with lower prices".