As you will be aware we have been eagerly awaiting the “Iberian Exception” price cap to be finalised and take effect, which was planned to take place from around 3rd May.
Typically, nothing is as quick as first suggested and due to a few adjustments, the decree had been delayed. However, the temporary measure should be passed today, Friday 13th May during an “extraordinary Council of Ministers meeting”, says Prime Minister Pedro Sanchez.
Sánchez referenced an initial cap of 40€/MWh compared to a seen price of 72€ in the market on Wednesday, or the 80€ that we have seen as an average price in the last quarter.
The cap is set to increase during the temporary 12-month duration to an average of around 48.80€, close to the 50€ that had been suggested in the initial agreement between Spain, Portugal and the European Commission. Once this measure has been approved and filters into the market, we should start to see the prices come down. In comparison to the record high prices seen in March, the market could expect to see around a 30-40% reduction in price.
We expect to be sending an update and advise of the best way forward to take advantage of the price reductions within around 14 days, market price dependant. .
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