Price of electricity today, September 11: the most expensive hour will be from 20:00 to 21:00 and the cheapest from 14:00 to 15:00

The wholesale electricity price in Spain is not set by a single regulation, but by a layered regulatory “block”: EU law on the internal energy market, the Electricity Sector Law and implementing regulations (CNMC, royal decrees and orders), plus exceptional measures such as the Iberian gas mechanism. Below I summarize the key pieces that, together, determine how the price is formed in the day-ahead/intraday market, balancing services, and its pass-through to the regulated consumer.

1. European framework of the internal market and balancing services

The basis of the wholesale market design is the European framework of the internal electricity market. The CNMC Circular 3/2019 (BOE-A-2019-17287) sets out and applies the main EU regulations:

• The network codes and market guidelines, including the Regulation (EU) 2015/1222 (CACM), which regulates the coupling of the European day-ahead and intraday markets and the allocation of capacity and congestion management.
• The Regulation (EU) 2017/2195 (EBGL), which sets the framework for balancing and reserve markets (balancing services).
• Other regulations such as FCA (forward capacity allocation), SOGL (system operation), or NCER (emergency and restoration), which condition operation and thus real-time price formation.
• The Regulation (EU) 1227/2011 (REMIT), on integrity and transparency of the wholesale energy market, which prohibits abusive practices and protects that prices result from genuine supply and demand.

On this basis, Circular 3/2019 assigns the CNMC the methodological development of the wholesale market operation and system operation in accordance with these European regulations.

2. Electricity Sector Law and organization of the wholesale market

The internal pillar is the Law 24/2013, of December 26, on the Electricity Sector (BOE-A-2013-13645). Among other aspects relevant to the wholesale price:

• It defines system activities (generation, commercialization, networks, system operator and market operator) and configures production under free competition regime, whose remuneration is based on an organized wholesale market.
• It establishes that all production units must participate in the day-ahead market offer system, including those previously under special regime, so their energy enters the marginal clearing.
• It regulates the specific remuneration regime for renewables, cogeneration and waste (RECORE) and its financing via system charges, which condition the regulated components of the final price.
• It distinguishes between access tolls for networks and charges for other regulated costs (deficit, extra non-peninsular costs, RECORE, capacity mechanisms, etc.), which are added to the market energy price.

3. Methodologies for wholesale market, tolls and charges

On Law 24/2013, a decisive methodological block for price formation is deployed:

• CNMC Circular 3/2019: establishes the methodologies regulating the operation of the wholesale market and system operation, consistent with European regulations.
• CNMC Circular 3/2020 and its amendment by Circular 1/2025 (BOE-A-2020-1066 and BOE-A-2025-2044): set the methodology for the calculation of transport and distribution tolls, which are passed on to consumers.
• Royal Decree 148/2021, on methodology for electric system charges (BOE-A-2021-4239): defines how the total amount of charges is distributed among consumers, with a binomial structure (power and energy terms) and time discrimination, influencing the hourly price they face.
• Various resolutions and circulars from the CNMC and the Ministry (for example, the Resolution of May 23, 2024 on rules for the day-ahead and intraday markets, BOE-A-2024-11958) develop the operational clearing rules and adaptation to European auctions and platforms.

4. PVPC and price formation for the small consumer

The link between the wholesale market and the regulated tariff is marked by:

• The Royal Decree 216/2014, on the methodology for calculating the voluntary prices for the small consumer (PVPC) and its contracting regime (BOE-A-2014-3376), amended by Royal Decree 469/2016.
• Procedures such as PO 14.12, approved and updated by resolutions of the State Secretariat for Energy (for example, Resolution of June 30, 2023, BOE-A-2023-15276), which detail the estimation of the cost of PVPC components.

These regulations determine how the hourly price of the wholesale market (OMIE) and balancing services are integrated, along with tolls and charges, into the regulated bill.

5. Iberian gas mechanism and other interventions

The most direct recent intervention on the clearing price has been the so-called “Iberian mechanism”:

• Royal Decree-law 10/2022, of May 13, which temporarily establishes a production cost adjustment mechanism to reduce the electricity price in the wholesale market (BOE-A-2022-7843), developed by Order TED/517/2022 on its implementation (BOE-A-2022-9435).
• Royal Decree-law 3/2023, which extends this mechanism and modifies its articles (BOE-A-2023-7937).

This scheme establishes an adjustment to gas facilities offering in the market, so that the clearing price reflects a capped gas cost, with compensation financed by the benefiting consumers.

Overall, these regulations — European framework, Law 24/2013, circulars and royal decrees on market, tolls, charges, PVPC and exceptional mechanisms — are those that regulate the setting of the wholesale price and its pass-through to consumers in Spain.

The daily electricity price in the wholesale market (the so-called “pool”) is formed based on the supply and demand of energy for each hour of the following day. Although the specific system may vary slightly between countries, in Europe and Spain the key factors explaining why electricity prices rise or fall each day are quite similar. The main ones are as follows.

1. Available supply and types of technologies entering the market

In the wholesale market, power plants offer energy according to their costs. The cheapest operating technologies enter first (renewables and nuclear), and as more energy is needed, more expensive technologies are incorporated (mainly gas combined cycles). The final price is set by the last plant needed to cover demand, i.e., the most expensive one entering each hour.

• Renewables (wind, solar, run-of-river hydro): have very low variable costs (no fuel cost), so when there is a lot of wind, sun or water available, they displace more expensive technologies and push the price down.
• Nuclear: usually operates almost constantly (low flexibility), offering energy at a relatively low price. When fully available, it helps stabilize prices.
• Gas combined cycles and other thermal plants: these technologies usually set the marginal price when they enter, because their costs depend on fuel and emission rights. When many hours per day are needed, prices tend to be high.

2. Electricity demand each hour

Demand is not fixed: it changes according to the hour, day of the week, and season. During peak hours, when consumption is highest, more expensive technologies are usually required.

• Hourly patterns: generally, consumption spikes early in the morning and at dusk, when households and businesses activate simultaneously. These hours are most sensitive to price increases.
• Weekdays vs. weekends: on weekdays industrial and service demand is higher, tending to increase the average price compared to Saturdays and Sundays.
• Seasonality: in summer (air conditioning) and winter (electric heating or heat pumps) consumption spikes, especially during heat waves or cold spells.

3. Weather conditions

Climate influences both supply and demand:

• Wind and sun: more wind and more hours of sun mean more cheap renewable production, which pressures the price down. Cloudy or windless days require more gas or other expensive sources.
• Rain and reservoir levels: if reservoirs are full, hydro can generate more at lower cost, reducing the price. Dry years or prolonged droughts reduce this capacity.
• Temperature: extremes of heat or cold increase demand (climate control), forcing the entry of more expensive technologies.

4. Price of fossil fuels and CO₂ emission rights

The cost of natural gas and coal (when still used) is decisive, because combined cycles usually set the marginal price:

• Natural gas: if gas prices rise in international markets (due to geopolitical tensions, lower supply, higher global demand), the cost of generating electricity with gas also increases and is passed on to the daily electricity price.
• CO₂ emission rights: plants emitting CO₂ must buy rights in the European emissions trading system. When the price of these rights rises, it further increases the cost of electricity produced with fossil fuels.

5. Interconnection capacity and situation in neighboring countries

Electric systems are interconnected. If a neighboring country has very high prices, it may be profitable to export electricity to it, reducing the available supply in the domestic market and pushing the internal price up. Conversely, if the opposite occurs, cheaper energy can be imported, moderating the local price. The physical capacity of these interconnections limits how much can be imported or exported each day.

6. Regulation, taxes and tolls (impact on the final bill)

Although the wholesale market determines the “base” energy price, the bill consumers pay also includes taxes, access tolls and regulated charges (network remuneration, energy policies, etc.). Regulatory changes in any of these components (temporary tax reductions, toll adjustments, gas caps or other intervention mechanisms) do not modify the basic pool operation but can cushion or amplify how the daily wholesale price variation is passed on to the final bill.

To be eligible for the regulated electricity tariff, the Voluntary Price for the Small Consumer (PVPC), a domestic consumer must mainly meet contracted power and type of supplier/contract requirements. Beyond that, there are practical conditions worth understanding to know if you can switch from the free market to the regulated one.

1. Maximum contracted power

PVPC is designed for small consumers. According to information repeatedly gathered by Demócrata about the electricity price, PVPC:

• Is the regulated tariff for consumers with contracted power up to 10 kW in low voltage.
• Therefore, it is aimed at households and small businesses (typical homes, small shops, etc.), not large consumers.

If your supply has power above 10 kW, you cannot opt for PVPC; in that case you can only be in the free market.

2. Type of contract and supplier

The second key requirement is not technical but contractual: PVPC can only be contracted with a Reference Supplier (COR), i.e., one of the companies authorized by the Government to operate in the regulated market.

According to Demócrata’s article on how to know if you have a regulated or free market tariff:

• If your bill is issued by a Reference Supplier (Energía XXI, Curenergía, Régsiti, Baser Comercializadora de Referencia, the COR of CHC Energía, Teramelcor, Energía Ceuta XXI, Aguas de Barbastro Energía, etc.), you may be under PVPC.
• The bill usually explicitly states that the contract is under the “Voluntary Price for the Small Consumer” or shows the acronym PVPC.
• If the bill corresponds to another company or plans with commercial names like “Stable Plan,” “Fixed Rate,” “Night Plan,” etc., it is generally free market and not PVPC.

Therefore, to contract PVPC you must:

• Be in low voltage with power ≤ 10 kW, and
• Sign the contract with a Reference Supplier, not just any free market supplier.

3. Meter and technical aspects

In practice, the vast majority of households already have a smart meter with remote management, which records consumption hour by hour. Information from Demócrata and notes from the Ministry for Ecological Transition show that:

• PVPC is based on hourly prices, published daily and applied to actual consumption each hour.
• This operation actually requires hourly or at least detailed measurement, which is practically covered by the smart meters that distributors have massively installed.

Although the consulted notes do not state the smart meter as a separate “formal requirement,” in practice:

• Your supply must be measurable by hour to correctly apply PVPC.
• If you still have an old meter, the distributor is obliged to progressively replace it with a smart meter; the cost is reflected as meter rental on the bill.

4. Incompatibilities and relation with other tariffs

The draft Supply and Contracting Regulation analyzed by Demócrata introduces a relevant idea: consumers under the regulated PVPC tariff cannot simultaneously have other contracting forms.

Translated into practical terms:

• You cannot have PVPC and another indexed or fixed tariff at the same time for the same supply point and billing period.
• If you are in the free market and want PVPC, you must change supplier to a reference one and fully switch to the regulated market.

5. Personal requirements and relation with the social bonus

To contract PVPC itself no income, family or vulnerability requirements are demanded: it is enough to meet power and contract type. Those requirements appear when it comes to the electric social bonus, an additional aid:

• Notes from Moncloa and MITECO indicate that only vulnerable consumers defined in Royal Decree 897/2017, and who are also under PVPC, can benefit from the social bonus.

That is: PVPC is a necessary condition for the social bonus, but not vice versa. You can be on PVPC without being a social bonus beneficiary.

6. How to check if you meet the requirements

• Check the contracted power on your bill (power term). If it is ≤ 10 kW, you pass the first filter.
• See who bills you: if it is not a Reference Supplier, you are in the free market.
• Check if the contract or bill mentions PVPC or “Voluntary Price for the Small Consumer.”
• If you do not meet any of the above, you can request a switch to PVPC from a Reference Supplier, adjusting power beforehand if necessary.