Spain and Portugal have reached an agreement with the European Comission to put a limit on the price of natural gas used to produce electricity of 40 euros per megawatt-hour initially and 50 euros on average throughout the period of application, which will last one year. In the absence of knowing more details about the measure, this implies that from its entry into force, consumers of the regulated market will pay for their electricity bill, at least half of what they paid in the month of Marchaccording to estimates based on data from the CNMC and the wholesale market.
March ended as most expensive in history after the crazy increase of the gas by the ukrainian War, with an electricity price in the wholesale market 283.30 euros on average per megawatt-hour, while in the first 26 days of April it was 188 euros; this is one difference of 33%. Once the Government implements the limit on the price of gas (something that is expected to be done in May), the wholesale market could have a hypothetical limit of around 130 euros per megawatt-hour, approximately, according to different experts. Thus, the average price per megawatt-hour will be 54% lower than the average price of March.
According to the simulator of the National Commission of Markets and Competition, an average consumer with peak and off-peak power of 3.5 kilowatts (kW) and a consumption of 178 kWh per month (52 kWh peak, 43 kWh flat and 83 kWh in valley) paid in april for your bill about 61 euros, 41% less than in March (105 euros). That is, the difference in receipt price (41%) turned out higher than the price of electricity in the wholesale market (33%). According to this rule, in a hypothetical month of May in which the wholesale market price (estimated at 130 euros per megawatt hour) is 54% lower than it was in March, it is conceivable that the final consumer receipt will also remain reduced by at least the same amount; that is, halfway.
Related news
Specifically, according to preliminary calculations by the energy expert Francis Valverdeif the new cap accepted by Brussels were applied from Begginings of may, the bill for that month for a typical consumer (with 4.4 kW of contracted power and a consumption of 3,500 kW/h per year) would be around 65 euros, 55% lower than that of the month of March, when had paid 144.3 euros.
3rd The evolution/forecast of the regulated bill 2022
If the new cap applies from the beginning of May, the bill for that month should be around €65, which would be a good drop from almost €100 in May. We will see it pic.twitter.com/kqqRj24pS7– Francisco Valverde (@FranValverdeS) April 26, 2022
Approximate figure
That hypothetical limit of 130 euros per megawatt-hour is a indicative figure that takes into account the weight of natural gas in electricity generation, the cost of CO2 emission rights, and other types of charges (maintenance, etc.), as explained by the energy expert and consultant for Menta Energía, Francis Valverde. This does not imply that all the combined cycle offers will be made at that price and that the invoice will always be linear. First, because the price of gas may vary depending on, among other factors, the efficiency of each plant. And, above all, because of the effect of renewables on the electricity market. In this way, those 130 euros per megawatt-hour is a hypothetical limit that will hardly be reached on a regular basis, but what is practically certain is that it will not be exceeded.