This Wednesday, July 15, will be the first day of application of the so-called ‘Iberian exception’. This new measure, agreed between Spain and Portugal with the European Commission, aims to limit the price of gas to considerably reduce the cost of the average consumer’s electricity bill.
This measure will limit the price of gas for electricity generation to an average of 48.8 euros per MWh. In addition, it will allow the price of a megawatt hour (MWh) to never exceed 50 euros in the next 12 months, a measure that will help lower the electricity bill.
[What is the “Iberian exception” and how much will it lower the electricity bill for the Spanish?]
This first price of electricity will be 165.59 euros per megawatt hour tomorrow
(MWh), which represents a reduction of 22.6% compared to 214.05 euros per MWh today in the wholesale market.
[The price of electricity should not exceed 150 euros per MWh in the next twelve months]
But how much will the average electricity bill now cost? How can I calculate the reduction that I will have in the monthly cost of electricity? This is what you have to know.
The average user’s electricity bill reached 120.68 euros in the month of May, as explained in its latest analysis by the association FACUA-Consumers in Action. An excessively high price if we take into account that a year ago this same invoice did not exceed 83 euros, which represents a rise of 46.9% in just 12 months.
With this new cap on gas prices, motivated by the implementation of the so-called ‘Iberian Exception’, the bill of consumers who have a regulated electricity rate – known as the Voluntary Price for Small Consumers (PVPC) – will drop considerably.
[Regulated rate or free market: who benefits more from limiting the price of gas?]
In fact, this limitation that has just come into force has already shown the first results in the price of electricity this coming Wednesday, June 15. It will be then when the cost is reduced from 214.05 euros per megawatt hour (MWh) to 165.59 euros per MWh in the wholesale market. This will be the lowest price that electricity has reached since May 29.
This reduction in the price of the megawatt hour, of up to 22.6%, will also mean a considerable reduction in the price of the average consumer’s bill, which is now set at over 120 euros. In this way, the current price that the user pays for his bill could be reduced below 100 euros and even reach 90 euros per month.
For her part, the Vice President and Minister of Ecological Transition, Teresa Ribera, spoke of a reduction of up to 15 euros in the average receipt of 100 euros in Spain thanks to this cap. In percentage, the Government has foreseen a reduction of between 15 and 20%.
[Which is cheaper: the free or regulated market]
