The price of electricity falls 31% on Wednesday and marks its lowest level since the gas cap, in October 2021

It will be the lowest since the Iberian exception came into force Sources from the Ministry for the Ecological Transition and the Demographic Challenge indicated that this gas adjustment is negative due to the low price of gas in the market, the average price of electricity for Regulated rate customers linked to the wholesale market will fall 30.9% this Wednesday compared to this Tuesday, to 80.44 euros/MWh, according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press. This price is the result of adding the average 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 the generation of electricity. In this way, the price of electricity for this Wednesday for consumers covered by the regulated rate, the so-called PVPC, will be the lowest since the Iberian exception came into force, in mid- June, and the cheapest since October last year. In the auction, the average price of electricity in the wholesale market – the so-called ‘pool’ – stands for this Wednesday at 81.71 euros/MWh. The maximum price will be registered between 9:00 p.m. and 10:00 p.m., with 136.74 euros/MWh, while the minimum for the day, of 48.37 euros/MWh, will be between 3:00 p.m. and 4:00 p.m. of the ‘pool’ is added the compensation to the gas companies that has to 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 , which on this occasion for this Wednesday for the first time since the mechanism exists shows a negative balance of -1.27 euros/MWh. Sources from the Ministry for the Ecological Transition and the Demographic Challenge indicated that this gas adjustment is negative due to than the low price of gas in the market, which leaves the reference price for gas plants at 41.49 euros per megawatt hour (MWh), very close to the reference price of 40 euros/MWh of the Iberian mechanism. Thus, When considering the income derived from the congestion rents of the interconnection with France, 50% intended to defray the cost of gas adjustment, results in this negative value. With the application of the Iberian mechanism, exceptionally, the congestion rents -directed in principle to defray the costs of network construction for reduce congestion – that are generated during its application will be used to reduce the cost of adjusting gas power plants. In this way, in the event that at a given time the price of the interconnection is saturated in the export direction, the so-called ‘market decoupling’ occurs, that is, one price appears in Spain (lower) and another in France (more high). In these circumstances, a French marketer that buys energy in Spain through the interconnection will pay the French price (more expensive). Meanwhile, the Spanish plant will receive the Spanish price (lowest) and the difference between the two is the congestion rent, which will reduce the cost of the adjustment, the same sources explained.