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    Electricity prices start to fall and drop 4% on Wednesday


    October 4, 2022 - CE Noticias Financieras

     

      Electricity will fall this Wednesday by more than 4%, to 271 euros per megawatt hour (MWh), according to the results of the auction held in the wholesale market or 'pool' and the adjustment to be paid by the beneficiaries of the cap on gas to compensate the plants that use this material.

      In this sense, electricity will slow down its escalation after five days of rising prices, although it will remain well above 200 euros/MWh, a barrier that it did not surpass for nine consecutive days between the end of September and the beginning of October, as reflected in the data compiled by EFE. According to figures from the Iberian Electricity Market Operator (OMIE) and the Iberian Gas Market (Mibgas), the wholesale price of electricity, that is, the price paid by consumers with regulated tariffs, will be some 7 euros cheaper than the 278 euros that would have been paid per MWh without the gas cap.

      The increase in electricity demand at the beginning of the week and the tensions in the energy markets, pending the evolution of the investigations into the leaks in Baltic waters from the Nord Stream 1 and 2 gas pipelines, condition the values in the main European economies. In fact, the heads of state and government of the European Union will address the security of critical infrastructures at their next informal summit, to be held this week in Prague (Czech Republic).

      Against this backdrop, electricity will be priced on Wednesday, on average, at 293 euros/MWh in Italy, although it will reach 495 euros/MWh between 20:00 and 21:00. For its part, in France it will be at 223 euros/MWh, while in Germany it will fall to 103 euros/MWh. In Portugal, where the cap is also applied to gas for electricity generation under the so-called 'Iberian exception', the price will be the same as in Spain, the country with which it shares the market. Outside the European Union, in the United Kingdom it will be paid at 120 pounds (about 138 euros at the current exchange rate).

      Auction and adjustment

      If only the results of the auction in the wholesale market are taken into account, without including the adjustment to be paid by the beneficiaries of the gas cap, the MWh will fall by almost 12% to 168 euros.

      By time slots, always excluding such adjustment, the most expensive price will be reached between 8:00 and 9:00 hours, when it will reach 250 euros/MWh, while the cheapest will be recorded between 23:00 and 24:00 hours, about 127 euros/MWh.

      To these amounts must be added, however, the cost of the adjustment to gas plants, the amount of which varies depending on the volume required by the system and its price, and is passed on to households and beneficiary companies. For Wednesday, the provisional average adjustment for consumers will be 103 euros/MWh, bringing the final price to 271 euros/MWh, around 33% more than a year ago.

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