The maximum limit of the electricity market will rise from 3,000 to 4,000 euros

Waiting for Spain and Portugal to impose a cap on the price of gas used to produce electricity, the maximum limit of electrical market It will rise from the current 3,000 euros per megawatt-hour to 4,000 euros per megawatt-hour, market sources confirm to El Periódico. This variation will take effect in about four weeks and will affect all european marketsincluding Spanish and Portuguese.

This is a technical issue and not a political one. European regulations say that if the market price exceeds the 60% of the established maximum (3,000 euros per megawatt-hour in this case) “in at least a unit of market time (hour) in a day on a zone individual auction or in several areas auction” is due Modify that top price. And that happened for the first time in Europe last Monday, April 4, when the price of electricity in the French wholesale market was close to 3,000 euros per megawatt-hour between 7 and 9 in the morning, with prices of 2,712.99 and 2,987.78 euros per megawatt-hour, for the drop in temperatures and the break of half of the French nuclear power plants.

Then the mechanism was activated that forces the European markets to increase that maximum price in €1,000 per megawatt-hour and thus go from the current 3,000 euros to 4,000 euros from the “five weeks following” the day on which the set threshold was exceeded. This will be on May 9, while the announcement about the change by the electricity market operators will take place next Monday, April 11.

The minimal price it will remain unchanged at -500 euros per megawatt-hour, a figure that no country has ever come close to, for the time being; Although many, like Germany, France or Belgium they have known the fact of having negative hourly average prices, and even someday negative average daily prices.

In Spain, the highest price reached in one hour was recorded on March 8, the day with the highest average daily price to date (544.98 euros per megawatt), when between 7 and 8 p.m. it was close to 700 euros per megawatt-hour, a figure never seen before that occurred a day after the natural gas price at Iberian gas market reached the record at the close of 214.36 euros per megawatt-hour, ten times higher than the average for natural gas since the entry into operation of this market.

Limit of 180 euros

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Until July 6 last year, the limit price in the wholesale market Spanish was 180 euros per megawatt-hour maximum and 0 euros minimum, a iberian anomaly that was not reached overcome until September 16, when the maximum was another, and the wholesale market reached a price of 188.18 euros per megawatt-hour, but it had not even been touched. Until that date, the historical record had been 103.76 euros per megawatt-hour on January 11, 2002.

The European Commission had been ‘chasing’ Spain for some time to modify these limits and thus harmonize all European markets. And the market operator OMIE carried out several public consultations, in 2019 and 2020, to test the pulse of the different agents. The first of these consultations had a “uneven” result among its participants: “While the ‘traders’ and dominant groups vertically integrated companies considered it insufficient and preferred to equalize the offer limits to the current limit (-€500/MWh and -€3,000/MWh), the independent marketerslarge consumers and some representatives preferred to maintain a rule of progressive updating from a lower value”. The National Commission of Markets and Competition (CNMC) considered the proposal “proper” because “it allows greater alignment” with the rest of Europe.

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