The Iberian mechanism, which sets a maximum price of gas for the production of electricity, allowed families and companies to save on average daily “around 14%” in the first 15 days of application, the Ministry of the Environment announced this Saturday.
“In the first 15 days of application, the Iberian mechanism allowed families and companies with electricity supply contracts exposed to the ‘spot’/spot market price of electricity to benefit from an average daily saving of 38 Euro/MWh [euros por Megawatt-hora]corresponding to an average daily reduction of around 14%”, revealed the office of the Minister of the Environment and Climate Action, Duarte Cordeiro.
In a statement, the guardianship explained that the families and companies exposed to the ‘spot’ electricity market had borne “an average price of 237.84 euros/MWh thanks to the existence of the mechanism, compared to the value of 275.90 euros/MWh that pay if this measure had not been applied”.
According to the daily wholesale price data in the electricity market during the 15 days of application of the Iberian mechanism, presented by the Ministry of Environment and Climate Action, June 22 was the day that registered the highest price in Portugal with the mechanism ., of 284.87 Euro/MWh, which without the mechanism was 296.19 Euro/MWh, when in France it was 383.14 Euro/MWh and in Italy it was 368.07 Euro/MWh.
During this period, with the Iberian mechanism Portugal registered the lowest price on June 26, with 178.38 Euro/MWh, which without the mechanism increases to 252.56 Euro/MWh, in France it was 249.07 Euro/MWh and in Italy of 286.15 Euro/MWh, according to data released by the Ministry of the Environment on the evolution of prices in the same 15 days.
The authority also reported that, during the first 15 days of application of the Iberian mechanism, “the price of natural gas (NG) grew by more than 45%, from 80 euros/MWh registered on June 15 to 116.03 euros /MWh on the 30th, which meant an increase in the cost of generating electricity from NG”.
With effects on the electricity market from June 15, the Iberian mechanism defines an exceptional regime for setting prices in the Iberian Electricity Market (MIBEL), after the rise in prices in the natural gas market (to historical highs), with direct negative consequences for the rise in electricity prices.
The measure is in force until May 31, 2023, encompassing the period of highest electricity consumption (autumn and winter) and, “during this period, an average maximum price of 48.75 euros per megawatt-hour for NG is defined used in the production of electricity”, recalled the Ministry of the Environment.
The Iberian mechanism aims to “limit the rise in electricity prices and protect those most exposed to spot market prices”, also benefiting other electricity consumers in the renewal of their supply contracts .
The measure is the result of close collaboration between the Governments of Portugal and Spain, to separate the price of NG from the formation of electricity prices in the MIBEL, and is also a consequence of the recognition, by the Commission European, of the Iberian System specificities, namely, the reduced electrical interconnection capacity of the Iberian Peninsula to Continental Europe.
Source: Observadora
