Madrid (EFE).- Light will close March with a decrease of more than 32% in the wholesale market, reaching an average of 89.6 euros per megawatt hour (MWh), in a month in which it has not been necessary to apply the cap to gas in no day thanks to the sharp drop in the price of this raw material.
According to the data compiled by EFE, March will become the second month with the lowest electricity price since July 2021, 20 months ago, only behind this January, when an average of 71 euros/MWh was reached thanks to the largest share of renewables, especially wind power.
During the last month, renewables have concentrated close to 54% of the peninsular electricity generation, exceeding the 47% share registered in February, but somewhat behind the 58.6% in January.
The price of electricity has also remained in March well below -71% less- the record that was reached in August 2022, the most expensive month in history with an average of 308.6 euros/MWh.
gas drop
In this price drop, the price of gas gains importance, whose escalation after the start of the Russian invasion of Ukraine unleashed an energy crisis in Europe that lasts over time, and which has plummeted in recent weeks in international markets to stabilize at levels close to 40-50 euros/MWh.
For this reason, during the month of March it was not necessary to activate the Iberian mechanism on any day, since the price of this raw material has remained at all times below 55 euros/MWh, the maximum price set by the Government for March.
In March, the Iberian Gas Market (Mibgas) marked an average of 44.2 euros/MWh, and on four occasions the price was less than 40 euros (Wednesday 22, 39.91 euros; Sunday 26, 39.48 euros; Monday 27, 39.62 euros, and Wednesday 29, 39.79 euros).
Thus, the so-called cap on gas has already chained 33 consecutive days without working; in fact, the last day it did so was February 26, when the cap was still at 50 euros/MWh.
Extension until December
Despite the fact that it has not been necessary to activate the gas cap in the last month, the Government has reached an agreement with the European Commission to extend it until December 31 with the aim of having a “safety net” for consumers in the event that its price rebounds in the coming months.
Until now, the mechanism established a cap on the price of gas used to generate electricity in the wholesale market, which began at 40 euros/MWh and since January has risen by 5 euros per month.
For the remainder of the year, the Government and Brussels have agreed to apply a more prolonged and linear increase in this mechanism until reaching a maximum price of 65 euros per megawatt hour (MWh) in December.
For April, when the cap was expected to be 60 euros/MWh, the maximum price will finally be 56.1 euros/MWh.
In the following months the reference price will increase by 1.1 euros except in the case of August, when the increase will be 1.2 euros, until it reaches 65 euros/MWh in December.
Cheaper than in Europe
Both the fall in the price of gas and the entry into force of the Iberian mechanism have allowed Spain to systematically have the cheapest electricity among the large European economies since last June, a situation that has been repeated in March.
Among the main community partners, Italy has once again been the country with the most expensive electricity, after closing the month with an average of 136.3 euros/MWh.
For their part, both France (112 euros/MWh) and Germany (102.5 euros/MWh) have registered lower values, although always above the prices registered in the Spanish wholesale market.
The bill also falls
This decline in the wholesale market will also allow the March electricity bill for an average consumer under the regulated rate or PVPC to fall by 17% compared to the previous month.
Thus, for a typical consumer in the regulated market, using the electricity receipt simulator of the National Commission for Markets and Competition (CNMC), with a contracted power of 4.4 kilowatts and a monthly consumption of 250 kilowatt hours (KWh). Distributed in the different periods (peak, flat and valley), the January bill reaches 54 euros.
This value is the second lowest since February 2021, more than two years ago, only behind last January, when the electricity bill marked an average of 48.62 euros.