The price of electricity collapses by 76% on Saturday, to 6.45 euros/MWh, and will mark several hours at 0 euros

MADRID, Oct. 27 (-) –

The average price of electricity for regulated tariff customers linked to the wholesale market will fall on Saturday, October 28, 76.3% compared to this Friday, to 6.45 euros per megawatt hour (MWh), thus marking its lowest level since mid-January.

By time slots, the maximum price, of 23.55 euros/MWh, will be registered between 8:00 p.m. and 9:00 p.m., while throughout three hours of the day – between 2:00 p.m. and 5:00 p.m. – the ‘pool’ will mark hours to zero euros/MWh, according to provisional data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.

In addition, throughout Saturday a total of 17 hours will be added at price levels below the level of 10 euros/MWh.

The electricity market establishes its prices through a marginalist system, which makes the latest and most expensive technology needed to cover demand set the price for all the others. However, the so-called inframarginal generation technologies – renewable, nuclear and hydroelectric – enter the market at a zero price, so when their production is sufficient to cover all expected consumption the price is set at those zero euros. .

In this case, the latest storms, together with the new storm these days, are causing demand – lower on weekends than on weekdays – to be covered for the most part by renewable technologies, mainly hydroelectric and wind.

In this way, we would have to go back to January 17 to find a lower price in the electricity pool for one day, when it marked 5.1 euros/MWh. In fact that day, the average price of electricity for regulated tariff customers linked to the wholesale market was even lower -4.48 euros/MWh- since the application of the ‘Iberian exception’ showed a negative balance.

So far in October, the electricity market average stands at 94.35 euros/MWh, compared to the 127.21 euros/MWh that the pool registered in the same month of 2022.

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.

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