The price of electricity for regulated rate customers will rise 24.1% this Friday, to 231.25 euros/MWh

Some 114 euros less than the price per MWh if the gas price limit is not included

MADRID, 7 Jul. (EUROPA PRESS) -

The average price of electricity for regulated rate customers linked to the wholesale market will rise 24.17% this Friday compared to this Thursday, up to 231.25 euros per megawatt hour (MWh), according to provisional data from the Operator of the Iberian Energy Market (OMIE) collected by Europa Press.

This price for PVPC customers is the result of adding the average price of the auction in the wholesale market to the compensation that the demand will pay to the combined cycle plants for the application of the 'Iberian exception' to cap the price of gas for electricity generation.

In the auction, the average price of electricity in the wholesale market - the so-called 'pool' - will be 146.73 euros/MWh this Friday, which is 22.5 euros more than the price for this Thursday (124.2 euros/MWh).

The maximum electricity price for this July 8 will be registered between 9:00 p.m. and 11:00 p.m., with 169.12 euros/MWh, while the minimum for the day, of 120.89 euros/MWh, will be between 03:00 and 04.00 hours.

To this price of the 'pool' is added the compensation of 84.52 euros/MWh to the gas companies (a figure that is still provisional and that usually varies compared to the definitive one and affects the percentage variations of the price), compared to 62, 04 euros/MWh registered for this Thursday. This compensation must be paid by the consumers who benefit from the measure, the consumers of the regulated rate (PVPC) or those who, despite being in the free market, have an indexed rate.

In the absence of the 'Iberian exception' mechanism to limit the price of gas for the generation of electricity, the price of electricity in Spain would have been an average of 345.17 euros/MWh, which is 114 euros/MWh more than with the compensation for clients of the regulated tariff, who will thus pay around 33% less on average.

Compared to a year ago, the price of electricity for customers of the regulated rate for this Friday is 147.2% more compared to 93.67 euros/MWh on July 8, 2021.

The Iberian mechanism, which entered into force on June 15, limits the price of gas for electricity generation to an average of 48.8 euros per MWh over a period of twelve months, thus covering the coming winter, a period in which energy prices are more expensive.

Specifically, the 'Iberian exception' sets a path for natural gas for electricity generation at a price of 40 euros/MWh in the initial six months, and subsequently, a monthly increase of five euros/MWh until the end of the measure .

The Government limited in its calculations to 15.3% the reduction in the receipt to the average electricity consumer covered by the PVPC regulated rate during the 12 months of application of the approved cap on the generation of electricity from natural gas, according to evidence in the impact report that accompanies the decree law and to which Europa Press has had access.

For the industrial consumer, totally exposed to the 'spot' price, the Government estimated a reduction of between 18% and 20%, with the first month of the mechanism oscillating between 15% and 17%, and between 13% and 15% at last.

The third vice-president and minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, stated last Tuesday that consumers will begin to notice the drop in their electricity bill derived from the measures adopted by the Government, such as the reduction of the load tax and the cap on gas for electricity generation, in the July bill.

"The first receipt that will arrive at our homes since the increase in the tax reduction and since the creation of the gas cap will be in July. I am talking about a relative reduction, with what it would have been in the absence of these measures. In absolute terms, it can be produce a smaller reduction for those who have a PVPC rate (of the regulated market) and a more important reduction for those who have a rate in the free market," said Ribera.

The prices of the 'pool' have a direct impact on the regulated rate --the so-called PVPC--, to which almost 11 million households in the country are covered, and serve as a reference for the other 17 million who have contracted their supply in the free market.

In fact, the National Commission of Markets and Competition (CNMC) has verified that in 2021, in the framework of the upward spiral of energy, around 1.25 million people switched from the PVPC to a rate in the free market at a fixed price.