Electricity in Portugal and Spain will rise 35% on Tuesday, to an average price of 365.33 euros per MWh, the highest since March 10, days after the Russian invasion of Ukraine, and the sixth highest ever, according to data. official data.
This increase already takes into account the Iberian mechanism, which came into force on June 15 after the agreement of Portugal and Spain with the European Commission and sets the maximum price for gas used by energy companies for electricity generation (from 40 euros per MWh, despite the fact that in European markets it costs more than 280 euros per MWh for futures contracts).
This “brake” provides that electricity producers are compensated for the difference between the price of gas in the wholesale market and the price determined by the mechanism (adjustment cost), and the cost of this compensation is distributed among all consumers with contracts indexed to in the spot market or with contracts extended after 26 April.
In Spain, the range of consumers who have to pay for this adjustment cost of the mechanism is much larger than in Portugal. This is due to the fact that 40% of families still use the regulated tariff, which is also valid in the wholesale market with monthly updates. In Portugal, the government said that in July only 29% of consumers would pay to adjust the Iberian mechanism.
The average daily price that will be valid this Tuesday in the Iberian market (MIBEL) is 182.93 euros per MWh, to which is added the cost of the adjustment, which is 182.40 euros. The final cost is therefore €365.33, with setup costs accounting for almost half of that amount.
Despite a 35 percent increase in electricity prices in the Iberian Peninsula on Tuesday, according to the Iberian electricity and gas market operators (OMIE and Mibgas), consumers can pay even more, around 110 euros per MWh (476.77 euros). MWh) if it were not for the Iberian mechanism in place since 15 June.
In addition to rising gas prices, exacerbated by the impact of the war in Ukraine, which began on February 24 with a Russian military invasion, more gas is being used for electricity this year due to a drought that has reduced water supply capacity. stored in dams and can be used for energy production.
According to the latest data from the Spanish government, the storage of water in Spanish reservoirs is 37.9% of the total capacity, the lowest level since 1995.
Between January 1 and August 15, Spanish hydroelectric production was the lowest since 1992 and was half the annual average for those months of the year.
Last year, for example, Spanish hydroelectric power plants generated twice as much energy as this year (22.6 thousand gigawatts per hour compared to 11.4 thousand this year), according to official figures published today by the newspaper El Pais.
Despite an increase in installed capacity to use renewable energy sources to generate electricity (such as solar power), the decline in hydroelectric power has been largely offset by the use of gas in combined cycle power plants.
However, in the past two weeks, Spain’s electricity consumption has been declining both compared to the same period in 2021 and in relation to previous weeks, which coincided with the entry into force of the “urgent” savings measures approved by the Spanish government. Government. .
In the first week of this “climate shock plan for energy saving and energy efficiency” that ended on August 15, electricity consumption decreased by 3.7% compared to the previous week and by 1.8% compared to the same days in 2021.
According to data released today by the Spanish government, consumption fell 9.5% in the second week compared to the previous seven days and 8.6% compared to last year.
Measures taken in Spain to save energy include a commitment that air conditioning for cooling public, cultural or commercial spaces cannot be below 27 degrees. In addition, shop window lighting must be turned off at 22:00 and the same goes for the lighting of public buildings that are not in use at this time.
These measures were approved as part of an agreement between the countries of the European Union to achieve global energy savings of 15% between August 1 and March 31, 2023, compared to the average over the past five years over the same period, taking into account due to the threat of supply cuts. gas to Europe from Russia.
In the case of Spain, which, like Portugal, is less dependent on Russian gas than other EU countries, the savings are 7%.