Cost of electricity to decrease 22% on first day of gas price cap

The cost of electricity will decrease by 22% on Wednesday compared to the day before in Spain, as announced by the Iberian Electricity Market Operator (OMIE).

The price, which changes every day, has been set at €165.59 per MWh, down from €214.05 on Tuesday.

On Wednesday, the most expensive hour will be from 12:00 am to 1:00 am, at €194/MWh, while the cheapest time of the day to use appliances will be from 3 pm to 4 pm, at €144.17/MWh.

This coincides with the first day the gas price cap for Spain and Portugal is in force.

Last Wednesday, a few weeks after it was announced, the European Commission greenlighted a deal with Spain and Portugal to bring electricity bills down for the next 12 months. The price of gas was limited to an average of €48.8/MWh until May 2023.

The deal, known as the "Iberian exception," will reduce the price of electricity for millions of households that have faced rising energy costs, especially in the wake of the war in Ukraine.

Indeed, the Spanish government believes the measure will lead to a 15% to 20% reduction in electric bills for households that have contracts in the PVPC regulated market (around 40% of the total and 70% of industrial businesses).

For the first six months the legislation is in place, the price of gas will be limited to €40/MWh, while from December 2022, the price will be raised by €5/month. On May 2023, the EU Commission expects residents in Spain and Portugal to pay a maximum of €70/MWh for gas.

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