The month with the most expensive light in history. August 2022 ends with the MWh at 300 euros on average, according to daily data published by the Iberian Energy Market Operator (OMIE), which includes both the price of electricity in the wholesale market, and the compensation paid to the gas companies, the cap on gas that prevents the cost for consumers from being even higher.
The EU will meet urgently to address the intervention of the electricity market
That the price rises is not a novelty, after a year of practically continuous increases, attenuated by the so-called ‘Iberian solution’ that prevents the high price paid for gas, which is used in combined cycle plants, from also is paid for the rest of the energies, such as renewables or nuclear.
The price of electricity is, therefore, separated from gas but that has not prevented it from taking off. This Wednesday, the average price of electricity paid by regulated rate customers linked to the wholesale market will reach 476.39 euros, 3.69%. It is the most expensive day with the exception of 544.98 euros/MWh on March 8, before the ‘gas cap’ came into force, which began to be effective on June 15.
Cheaper than in other European markets
Two components must be distinguished from this figure. On the one hand, the average price of electricity in the wholesale market, the so-called ‘pool’, which reaches 187.3 euros/MWh. On the other, the cap on gas, the compensation that clients with a regulated rate pay to gas companies, 289.09. In fact, throughout this week, this compensation has been higher than the pool price.
In August, on average, the compensation to the gas companies has been around 145 euros, with days that have not reached 84 euros and with others, such as the one marked for this August 31, that more than triple that figure.
In that sum, of the price of the ‘pool’ plus compensation, the last month started at 235.32 euros/MWh, so that, practically, August closes at double what it started. This price, both for Spain and Portugal, remained practically stable until the middle of the month, until on August 12 it exceeded the barrier of 300 euros, which although it has not remained constant, in recent days, it has stepped on the accelerator until it exceeded the level of 400 euros/MWh, including gas compensation.
August began at 235.32 euros/MWh, so that it practically closed at double what it started. This price, both for Spain and Portugal, remained practically stable until the middle of the month, until on August 12 it exceeded the barrier of 300 euros, which although it has not remained constant, in recent days, it has stepped on the accelerator until it exceeded the level of 400 euros/MWh, including gas compensation.
However, the 300 euros on average and the 476.39 euros/MWh at the end of the month are far from the figures reached in other European markets, which have led the European Commission to launch an immediate review and modify the electricity market structure. This Wednesday, France exceeds 651.8 euros/MWh; Germany, 604.5 and Italy 612.4 euros.