From Sunday, June 19, the cost of electricity in Spain and Portugal will drop

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THE average energy price for regulated rate customers connected to the wholesale market in Spain and Portugal will decrease by 16.2%.

It’s important to keep in mind that this decline occurs at the same time as weekend demand is declining and the heat wave has passed.

This price for PVPC customers is indeed the result of multiplying the average price of the wholesale market auction by the amount of compensation that the demand will pay towards the combined cycle plants in order to apply the "Iberian exception," which is intended to set a limit on the cost of gas used in the production of electricity.

With this approach, the total cost per megawatt-hour for the user to purchase electricity would be €177.64/MWh once the €55.03/MWh compensation to the gas firms is added to the pool price. When compared to yesterday, Friday, June 17, when it cost €65.48/MWh.

The consumers who gain from the measure must cover this compensation. These include customers of the regulated rate (PVPC) or those who have an indexed rate although operating in a free market.

The Iberian Energy Market Operator (OMIE) reports that the average cost of electricity in the auction's wholesale market, or "pool," is €122.61/MWh for tomorrow, Sunday, June 19. That is a decline of 16.33% ($23.93/MWh) from yesterday's price of €146.54/MWh.

The day's minimum rate of €50/MWh will be around 4 pm and 5 pm on Sunday, while the day's highest rate of €250/MWh will be recorded between 10 pm and 11 pm.

Prices have increased dramatically since last year. In the wholesale market, energy cost an average of €87.22/MWh on the same day in 2021, which is €35.39 less than it did this year.

This past Sunday, the average cost of energy in Spain would have been over €243/MWh if not for the "Iberian exception," the proper implementation of which is being monitored by the National Commission for Markets & Competition (CNMC).

That is around €71/MWh more than what customers of the regulated rate would have paid without the compensation, who would have paid an average of 29% less.

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