Homeless. The average price of the wholesale market of the electricity market is going to chain its second consecutive historical record this Tuesday, shooting up by more than 100 euros in a single day, up to 544.98 euros per megawatt hour (MWh), on a Monday of shock in the energy markets due to the war in Ukraine.
Until now, the pool had never traded above 500 euros, after having exceeded the level of 400 euros for the first time in history on Monday. This Tuesday, at all hours it will be above that figure, with a peak of 700 euros per MWh at 8:00 p.m. Some stratospheric figures, light years away from those of a normal year, in which the pool used to be listed around 40 or 50 euros. The vector of this new record is, once again, natural gas and the price formation system in force in the EU, whose rules Spain has been asking Brussels to change for months.
This week, the European Commission could open up to a solution such as the one that the Spanish Government has been demanding for some time in the face of the worst energy crisis since the 1970s, which, as the International Energy Agency (IEA) has just warned, is providing multimillion-dollar “profits dropped from the sky” for European electricity companies due to the stratospheric rise in gas prices and the design of the wholesale market, based on a marginal system in which all technologies charge the price set by the last plant that matches supply and demand.
This Monday, the most used reference in Europe for the gas market, the Dutch TTF, has broken all records again. It has come to trade at 345 euros per MWh, with a rise of close to 80%, more than 150 euros in a single session, compared to Friday’s session, when it already registered the highest prices until then, after the takeover by the Russian army of the largest nuclear power plant in Europe, the Ukrainian Energodar plant, in the Zaporizhia region.
The lack of control of TTF gas occurs despite the increase in Russian gas flows to Europe, given the risk of interruptions in the supply from that country and the imposition of restrictions on imports in Western countries, after the United States United opened the door last weekend to that possibility. A scenario that has caused the Brent oil barrel to trade this Monday at its highest levels since the record highs of 2008.
The prices of the ‘pool’ have a direct impact on the regulated rate –the so-called PVPC–, to which almost 11 million consumers in the country are covered, and serve as a reference for the other 17 million who have contracted their supply in the free market.
This Monday, FACUA-Consumers in Action called on the European Commission “to stop bowing to the interests of the large energy companies and allow the Member States to set reasonable limits on offers in daily auctions”. According to FACUA, if the wholesale electricity prices of recent days are maintained this month, the average user’s bill “would exceed 250 euros, although everything indicates that the historical maximum will continue to be exceeded in the coming days.”
“Taking into account the exceptional situation that is going through and given that all electricity generation technologies are taking advantage of high gas prices, which are only used by conventional and combined cycle thermal power plants”, FACUA considers calling on the National Commission for the Markets and Competition (CNMC) that “set a maximum of 50 euros per megawatt hour for bids in the daily auction”.