The first effect of the Iberian exception is already known, after the first auction held with a ceiling price of 40 euros per megawatt (MWh) for gas used to produce electricity, the price that consumers will pay tomorrow, Wednesday, for the MWh of electricity used will be 49 euros lower than this Tuesday.
This can be seen on the website of the Iberian Energy Market Operator (OMIE), which after the auction has left the average price of MWh at 165.59 euros, compared to 214 paid on Tuesday, a reduction of 22.6%.
A 22.6% reduction
The band in which electricity will be more expensive on Wednesday will be between 1:00 and 2:00 am, when the MWh has marked a price of 197.17 euros, while the lowest will be between 16:00 and 17:00 hours when it will be paid at 144.17 euros. Thus, the price is below 200 euros per MWh in all time slots.
The measure comes into force in the middle of the heat wave when electricity consumption in homes and businesses is soaring due to increased use of air conditioning.
Effective tomorrow only for the PVPC
Those who will first notice this measure on their bills will be the 37% of consumers whose bills are linked to the regulated PVPC market, to whom the new reduced price will be applied as of tomorrow.
The fall in this first price with the new mechanism is in the range of the average reduction estimated by the Government, which will vary between 15% and 20% for a full month of consumption.
82% more expensive than a year ago
Despite this "happiness", the price per MWh of electricity will be 82% more expensive tomorrow than the 90.95 euros it was a year ago. Although it is also worth remembering that the escalation of the energy crisis that began in July had not yet begun. It is to be expected that the impact will be more significant when these dates are reached.
Electricity market experts agree that this is one of the measures designed by the Government that will have the greatest effect on the objective of reducing consumers' electricity bills. Doubts are growing as to how long Brussels will allow its application, as it could distort market unity in Europe.
12 months of operation
For the time being, the European Commission has given the go-ahead for it to be in operation for 12 months, until 31 May 2023.
During that time, the average cap that will be applied to the price of gas will be 48.8 euros per MWh, starting during the first six months with a cap of 440 euros MWh and ending at 70 euros MWh.