Electricity prices in Spain hit record high

Conor Faulkner
Conor Faulkner - [email protected] • 1 Sep, 2022 Updated Thu 1 Sep 2022 13:50 CEST
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August was the most expensive month for electricity in Spain since records began, despite the so called 'Iberian exception' cap designed to keep prices low.


August was the most expensive month for electricity in Spain ever, with the average price a staggering €308/MWh on the wholesale market. This has, in turn, been passed down to consumers and sent bills skyrocketing further.

According to figures from main operator of the Iberian Energy Market, OMIE, the new record-high price dwarfed the old record of €283.3/MWh, recorded last March shortly after the war in Ukraine began.

Yet electricity bills, and utilities more broadly, had been on the rise long before Russia's invasion of Ukraine, and the record price was reached even when the "Iberian exception" was factored in.

Iberian Exception 

In March 2022, for the first time ever two European countries - Spain and Portugal - set a price cap on gas destined for electricity generation, and by extension electricity prices, for twelve months. In June the European Commission approved the cap mechanism, which became known as the Iberian 'exception.'


Financial aid has been given directly to energy companies in order to "preserve the integrity of the market," according to Margrethe Vestager, vice-president of the EU Commission. These subsidies total €6.3 billion for the Spanish market, and €2.1 billion for Portugal.

Yet the energy market has become so volatile in recent months that the cap could do nothing to stop August becoming the most expensive month in Spanish history. Without the cap in place, the average price in August would have been €376.7/MWh, meaning that it has brought the wholesale price of electricity down by around 18 percent.

European neighbours

In fact, prices have climbed so high despite the cap, and August was such a historic month - in the last eight days of the month six of the ten highest single day prices in history were recorded - but electricity prices on the Spanish wholesale market are still far lower than in other major European economies.

In countries like Italy and Germany, markets more dependent on gas, and in France, suffering with low nuclear reactor production, the average price is around €500/MWh.

The peak price in Europe was recorded in Italy, with an average of €543.15/MWh, even breaking the €700 barrier for four days and remaining above €600 for nine.

In France, a country famed for its nuclear power production, around half of its reactors are out of action due to refuelling or corrosion problems, meaning the average price is €492.48/MWh with a peak of €700.



Conor Faulkner 2022/09/01 13:50

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