The light drops by 23% on the first day of application of the 'Iberian exception'

The average price per megawatt hour goes from 214 euros to 165 euros, its lowest level since May 29

Jose Maria Waiter

First day of the application of the 'Iberian Exception' and first drop in the price of electricity. The first electricity auction after the entry into force of the limit on the price of gas has shown a daily reduction of almost 23% in the wholesale electricity market on Tuesday. The average price per megawatt hour (MWh) will go from 214 euros on average this Tuesday to 165 euros, its lowest level since May 29, according to data from the Iberian Energy Market Operator (OMIE).

The most expensive section of the day will be between twelve at night and one in the morning, when it will exceed 194 euros per megawatt hour (MWh), while the least onerous will be between three and four in the afternoon, when It will be around 144 euros. In this way, there will be no time slot throughout the day that exceeds 200 euros/MWh.

The mechanism, which finally received the green light from Brussels last week, limits the price of gas for electricity generation to an average of 48.8 euros per MWh over a twelve-month period, thus covering the coming winter, a period in which that energy prices are more expensive.

Price of 40 euros/MWh

Specifically, the 'Iberian exception' sets a path for natural gas to generate electricity at a price of 40 euros/MWh in the initial six months, compared to around 80 euros/MWh at which natural gas is quoted in Mibgas, and subsequently, a monthly increase of five euros/MWh until the end of the measure.

The Government limits in its calculations to 15.3% the reduction 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 the report of impact 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 estimates a reduction of between 18% and 20%, the first month of the mechanism oscillating between 15% and 17%, and between 13% and 15% at last.

However, despite this significant drop in the 'pool', compared to a year ago, the average price of electricity for this Wednesday will be 82% more expensive than the 90.95 euros/MWh of June 15, 2021 .

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.

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