Price of electricity rises to 21 euros on Wednesday

The price of electricity will rise on Wednesday for the first time since last Thursday to reach 21 euros per megawatt hour (MWh), almost five times more than this Tuesday, when it has registered its lowest price of the year, according to the results of the auction held in the wholesale market.

The final average price is the result of adding, to the 21.6 euros/MWh registered in the wholesale market, the provisional adjustment that the beneficiaries of the gas cap have to pay to compensate the plants that use this material to generate electricity, which can sometimes be negative, as on Wednesday, which will be -0.7 euros.

Without the so-called Iberian mechanism, which limits the price of natural gas used for electricity generation, the wholesale price would be 38 euros/MWh, i.e. some 17 euros higher, according to data from the Iberian Electricity Market Operator (OMIE) and the Iberian Gas Market (Mibgas). This calculation already applies the new gas cap of 45 euros, which will be in force throughout January.

The prices of the last few days, unusually low in the midst of the Russian invasion of Ukraine, are the result of the high participation of renewables in the national mix, which this Tuesday will account for nearly 70% of generation with 576.6 gigawatt hours (GWh), its highest figure in history for the second consecutive day, according to data from Red Eléctrica.

By time slots, and excluding the adjustment, electricity will reach its highest price between 20:00 and 21:00 hours, with 122.7 euros/MWh; and the lowest, between 2:00 and 4:00 hours, when its price will be 0.1 euros/MWh. Despite this increase, the price of electricity will be nearly 91% lower than a year ago, when it stood at 223 euros/MWh, and will be at levels well below those recorded in most of the surrounding countries, even without the application of the cap on gas.

Thus, in France the average price will be 157 euros/MWh; in Italy, 149.4 euros/MWh; in Germany, 144 euros/MWh; and in the United Kingdom, 138 pounds/MWh (around 561 euros/MWh).