The cap on gas price will remain in force till May 31, 2023 and will work as a direct subsidy to power producers

Electricity prices in the wholesale market will fall 22.63 percent to 165.59 euros per megawatt, on Wednesday 15 June, the day the cap on the price of gas for electricity generation will come into effect.

Thus, according to data published by the Iberian Electricity Market Operator (OMIE), the so-called ‘Iberian Exception’ will begin its journey with a reduction in price. The device serves to compensate for the reduced reliance on gas in the peninsula’s energy system. After several months of negotiations, the European Commission approved this exception a few days ago.

The gas price cap will remain in force till May 31, 2023 and will act as a direct subsidy to the power producers. This payment will be calculated as the difference between the market price of natural gas – which is 80 euros today, according to MiBgas data – and the maximum limit, which will average 48.8 euros during the year in which it is available. In operation (40 euros during the first six months).

The 22% drop in the price of electricity puts electricity at its lowest level since June and May 29 (when it cost 161.84 euros). If compared with Wednesday of last week, when the average cost was 185.45 euros, the decline is 10.71%, while on the same date last year – on the third Wednesday of June – electricity was already moving upwards, but then also cost only 94.63 Euro MW.