Electricity prices soar with heatwave, exceeding €100 per megawatt-hour: most expensive range

The wholesale electricity market, the so-called “pool”, will once again exceed the level of 100 euros per megawatt hour (MWh) this Thursday, thus reaching levels not seen since the beginning of the year, helped by the first heat of the summer. In particular, the average price per day of the “pool” will be 101.37 euros / MWh, a maximum of 138.23 euros / MWh from 9 p.m. to 10 p.m. and a minimum of 79.21 euros / MWh from 3 p.m. and 4 p.m., according to data from the Iberian Operator of the Energy Market (OMIE), compiled by Europa Press.

Thus, the wholesale market price this Thursday will exceed the 100 euro/MWh mark for the first time since January 9 last year, when it was 113.83 euro/MWh.

The heat wave, the first in intensity this summer, will therefore leave prices particularly high, given the behavior of the electricity market in 2024, in which in April the “pool” recorded its first negative prices in history due to the majority presence of renewable energy sources – solar, wind and hydroelectric – in electricity production, which often led to a drop in prices.

In particular, April ended as the month with the lowest electricity price in history since the launch of the wholesale market – an average of 13.67 euros/MWh.

The first heat wave of the summer is expected to begin this Thursday, reaching its peak on Friday, July 19, when maximum temperatures will exceed 40 degrees Celsius in most of the country and reach 44 degrees Celsius in areas of the Guadalquivir Valley, according to the forecast of the State Meteorological Agency (AEMET).

This increase in the “pool” will impact customers in the regulated market or PVPC, who are subject to daily price fluctuations.

It should be remembered that the “pool” does not exactly represent the final amount in the price of electricity for the consumer subject to the regulated tariff, since with the introduction in 2024 of a new PVPC calculation method that includes a basket of medium-term and long-term prices in order to avoid strong fluctuations, without losing short-term price references that promote savings and efficient consumption.

Thus, the share of the pool price link will gradually be reduced to include links to futures markets, so that they will be 25% in 2024, 40% in 2025 and 55% starting in 2026.