Iberdrola Proposes To Thousands Of Its Customers In France

The price of electricity will drop 9% this Sunday, despite what will continue to exceed the psychological level of 250 euros per megawatt hour (MWh) and will exceed by 138% what consumers paid on the same day last year.

Specifically, for this Sunday, August 21, the average price per megawatt hour in the electricity ‘pool’ will be 141.1 euros/MWh . To this should be added 120.57 euros/MWh for compensation to the gas companies, so that the real average price for the regulated tariff consumer will be 261.67 euros per megawatt hour .

This price for PVPC customers is the product of adding the average price of the auction in the wholesale market and 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.

This price, however, will only be applied to households that have contracted a regulated rate (PVPC) , almost 11 million in Spain. As long as they have their bill in the free electricity market , they will only notice the increase when their contract is updated annually.

At what time is electricity cheaper?
According to data from the OMIE and without counting compensation to gas companies, the cheapest hour of electricity will be in the afternoon, between 5:00 p.m. and 6:00 p.m., when electricity will be worth 25.09 euros/MWh.

At what time is electricity more expensive?
The most expensive time to turn on the light will be at dawn, between 00:00 and 01:00, when it will cost 205.41 euros/MWh. After falling during the day, it will pick up again in the last three hours of the day.

Why does the price of electricity vary so much?
The main cause of the price fluctuations is that the price of gas is experiencing strong increases and its use is essential for the production of energy in the so-called combined cycle plants. Thus, any impact on the price of gas has an almost immediate impact on the price of electricity.

The impact of the ‘Iberian exception’
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 be on average around 373.19 euros/MWh, which is around 111.52 euros/MWh more than with the compensation for clients of the regulated rate, who will thus pay 29.88% less on average.

The ‘Iberian mechanism’, which came 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 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 Third Vice President of the Government and Minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, estimated this week that the Iberian exception has meant a saving of 1,383 million euros for Spanish consumers in its two months of validity.

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