The drop in gas on international markets during the last few weeks will allow the crown oOctober as the month with the lowest electricity price more than a year, before the Russian invasion of Ukraine began and the energy crisis broke out in Europe. There are still two days left until the end of October, and currently the average recorded price on the wholesale market 164 euros per megawatt hour (MWh), the lowest since September 2021, when electricity was paid on average at 156 euros per MWh.
In addition, iIt is to be expected that the price at which October closes will be even lowerdue to the continuous decline that the electricity market has recorded in recent weeks, which has brought it to the three lowest prices in 2022 and records an average of 110 euros per MWh during the last one two weeks. Thus, the average for October is significantly below the 309 euros per MWh that was paid in August, the most expensive month in history, burdened by high temperatures, increased gas consumption and low production renewable registered in the context marked by the Russian invasion of Ukraine.
Less demand for gas
In this sense, the same circumstances that caused electricity to set a record price on the wholesale market in August were reversed to close October as the cheapest month in more than a year, thanks to lower gas demand. Such good temperatures are delaying the activation of the heating system in much of Spain, causing a drop in demand for gas, which, with more wind production and the accumulation of reserves of this raw material – in Spain they are around 94% – puts electricity at levels not seen in months.
The gas cap has no effect
The drop in gas also created an unprecedented situation in Spain, allowing the so-called Iberian mechanism did not have to be applied for eight days consecutive years because the value of this raw material fell below the maximum set by the Government. This is why the price of electricity in October, if this mechanism – which limits the price of gas used in the production of electricity – would not be in effect, would reach the current 169 euros per MWh, slightly higher than the price recorded by the market with a gas cap. However, despite the fact that in the last month the effects of the gas cap have been diluted by market conditions, since The Iberian Mechanism entered into force on 15 June it made it possible to curb the escalation of electricity by more than 15%: the average price since then is 245 euros per MWh, compared to 288 euros that would have been paid without this mechanism.
Likewise, it made it possible to set the price of electricity in Spain at significantly lower values than those of other major European economic powers such as Germany (315 euros), France (363 euros) and Italy (400 euros). ). Despite this, because of the little influence she had restrictions on gas last month, the average price recorded in Germany in October is lower than that of Spain, at 154 euros per MWh, while France (182 euros) and Italy (217 euros) continues with higher prices.
The electricity bill will follow the same trend
This drop in prices was also recorded on the wholesale electricity market will have a direct effect on the electricity bill are paid by all consumers included in the regulated market (PVPC), and that it could be the cheapest in the whole year if the trend continues in the days remaining until the end of the month. Until October 28, for a typical customer on the regulated market, and according to the electricity bill simulator of the National Commission for the Market and Market Competition (CNMC), with a contracted power of 4.4 kilowatts and a monthly consumption of 250 KWh, the October bill is around 73 euros. If it continues in this price range, the bill could be around 80 euros at the end of October, which is the lowest price of the whole year and the cheapest since September 2021.