A year ago, on 25 December 2021, the average price of electricity was a whopping 226.42 euros/MWh SUR

Price of electricity in Spain plummets this Christmas Day to lowest level since May 2021

The average price for regulated rate customers linked to the wholesale market will drop 69 per cent compared to Saturday and be around 20 times less than a year ago

EUROPA PRESS

MADRID.

Sunday, 25 December 2022, 07:57

The average price of electricity for regulated rate customers linked to the wholesale market in Spain will plummet this Sunday, Christmas Day, to 10.63 euros per megawatt hour (MWh).

The price of electricity will fall 69% on 25 December compared to Saturday and will once again see the lowest price registered since May 9, 2021, before the start of the energy crisis, when it was 10.53 euros/MWh. A year ago, on December 25, 2021, the average price of electricity was 226.42 euros/MWh.

Therefore the price of electricity continues its downward trend that began at the start of December due to the highest level of hydroelectric production in 16 months. Bad weather has spun the wind turbines and the heavy downpours have allowed more generation of hydraulic power. By ceasing to depend so much on gas for generation of electricity, the price of the commodity has fallen dramatically.

Best prices before 6pm

In the energy auction, the average price of electricity in the wholesale market - the so-called 'pool' - stands this Sunday at 15.24 euros/MWh. During most of the day, until 6pm, the price of electricity will be below 5 euros/MWh.

The minimum price, of 1.45 euros/MWh, will be from 5am to 7am, while the maximum price will be registered between 8pm and 9pm, with 50.26 euros/MWh, according to provisional data from the Operator of the Iberian Energy Market (OMIE) collected by Europa Press. Compensation for gas companies is added to this pool price, which must be paid by consumers who are beneficiaries of the measure, consumers of the regulated tariff (PVPC) or those who, despite being on the free market, have an indexed rate, which for this Sunday is at negative levels, -4.61 euros/MWh, according to provisional data.

Effect of the 'Iberian exception'

In the absence of the 'Iberian exception' mechanism to cap the price of gas for electricity generation, the price of electricity in Spain would be around 67.4 euros/MWh on average, which is around 56.67 euros/MWh more than with the compensation for customers of the regulated rate, who will thus pay 84.23% less on average.

The 'Iberian mechanism', which came into force on 15 June, limits the price of gas for electricity generation to an average of 48.8 euros per MWh for a period of twelve months, thus covering next winter, a period in which energy prices are more expensive. Specifically, the 'Iberian exception' sets a path for natural gas for electricity generation from 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.