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The price of electricity plummets this Saturday by 74% and breaks a new annual minimum with 1.51 euros/MWh

MADRID, 3 Nov.

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The price of electricity plummets this Saturday by 74% and breaks a new annual minimum with 1.51 euros/MWh


The average price of electricity for regulated tariff customers linked to the wholesale market will plummet on Saturday, November 4, 73.7% compared to this Friday, to 1.51 euros per megawatt hour (MWh), marking thus a new annual minimum driven by the high presence of renewables -mainly wind and hydraulic- in generation.

In fact, we would have to go back to find a lower electricity pool price than this Saturday until January 31, 2021, when it set an average for the day of 1.42 euros/MWh.

By time slots, the maximum price, of 4.3 euros/MWh, will be registered in the first hour of the day. However, there will be another day with hours at zero euros per MWh - between 3:00 p.m. and 4:00 p.m. and 11:00 p.m. and 12:00 p.m. -, according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.

Furthermore, throughout the section of the day that runs from 11:00 a.m. to 6:00 p.m., the wholesale electricity market will also set minimum prices close to zero euros/MWh.

In this way, the 'pool' continues with the level of historically low prices that it has marked at the end of the month of October and the beginning of November, driven by the continuity of the storms in the Peninsula and by lower demand with the arrival of the weekend.

The large presence of renewable generation, especially wind, due to the effect of the storms in Spanish territory, with a series of storms that are leaving strong winds and rain, is allowing the 'pool' to register these low prices.

In fact, the storms suffered in the final stretch of October led to the upward trend in electricity prices of recent months being halted at the end of last month. Thus, the average of the electricity market for the month closed at 90.14 euros/MWh, almost 13% lower than the 103.34 euros/MWh in September.

So far in October, with just four days, the pool registers an average price of just over 4 euros/MWh, compared to just over 115 euros/MWh that it registered in the same month last year.

Spain, along with Portugal, will thus have the lowest pool price on Saturday compared to other countries on the Old Continent, where in France or Germany they will have a price of more than 24 euros/MWh, while in the United Kingdom they will exceed 93 pounds/MWh (about 106 euros).

Compensation to the gas companies would be added to the average price of the 'pool', which has to be paid by the consumers who are beneficiaries of the measure, the consumers of the regulated tariff (PVPC) or those who, despite being in the free market, They have an indexed rate, but it is once again at 0 euros/MWh, a situation that has been repeated since February 27.

The so-called 'Iberian exception' was extended until December 31, following the agreement reached by Spain and Portugal with the European Commission. Thus, it was extended for seven months, until the end of this year, and it was not excluded that it could be extended for longer if said framework was also increased.

Specifically, the agreement not only represented an extension of the Iberian exception that was already applied, but also implied some adjustments to accommodate it, such as the price reference, which until then had increased by five euros per month, and became softer. .

In the original agreement, the aforementioned reference price for gas had an average value of 48.8 euros/MWh: it was 40 euros/MWh for six months, rising 5 euros/MWh each month thereafter. It has increased by 1.1 euros/MWh since last April, ending at 65 euros/MWh.

Currently, the mechanism has not had any effect on the marginal matching processes in the wholesale markets since the end of February due to the drop in the price of natural gas below the thresholds set for its application, but, if necessary, the extension will allow maintaining a reasonable price, not so dependent on the evolution of natural gas.