Spain Braces for Rising Energy Prices as Heat Wave Hits

Weekends are usually days of respite in the price of light due to the decline in economic activity. But since what does not drop are the temperatures and Spain is going headlong into a new heat wave tomorrow, the price of energy in the wholesale market will climb again on the last day of the week driven by air conditioning compressors.

Specifically, the price of light in the wholesale marketwhich serves as a reference to the regulated rate or PVPC, It will rise 3% tomorrow, to 113.17 euros per megawatt hour (MWh), its highest value on a Sunday since last Marchaccording to the results of the auction held this Saturday, whose data is collected by the Iberian Energy Market Operator (OMIE).

The light will thus reach its second highest value since the beginning of August after two consecutive days on the rise -today it has risen another 2%-. However, electricity will be significantly cheaper than a year ago. So far this month, it has been paid on average almost 90 euros/MWh, compared to 263 euros/MWh in the same period of time in August 2022, the most expensive month in history. Since the beginning of the year, the average price has stood at 88.7 euros/MWh, less than half that of the previous year.

By time slots, electricity will reach its highest price between 9:00 p.m. and 10:00 p.m., with 139.5 euros/MWh, and the lowest between 4:00 p.m. and 5:00 p.m., with 82.5 euros /MWh.

The increase registered in the auction will make electricity in Spain will be higher than the main neighboring countries tomorrow, since in Germany, the average price will be 90.1 euros/MWh; in France, 90.2 euros/MWh, in the United Kingdom, 81 pounds/MWh (about 95 euros/MWh at the current exchange rate) and in Italy, 95 euros/MWh.

The gas cap, which was established at the time to try to contain the price of electricity, will not apply for another day, since its price on the Iberian Gas Market (Mibgas) continues below the limit of 60.6 euros/MWh set by the Government for August.