The mechanism ceases to apply if the compensation price is lower than the reference price or ceiling, which is now 50 €/MWh.
The mechanism of the well-known Iberian exception or cap on gas in electricity generation has not been applied for three days as the reference price is lower than the limit price at which this mechanism is applied.
The gas cap has ceased to apply. And it does so for the following reason.
In the month of February, the gas price cap stood at 50 €/MWh, but as the compensation price is lower, it has not been applied for the last three days. This price has been below the €50/MWh limit since Sunday 19/02.
It is not the first time
Last October, the Iberian exception mechanism stopped working after several days below 40 €/MWh, the reference price for the first six days of the mechanism.
Unlike now, the fact is that in 10 days the reference price will rise again to 55 and this paves the way for the mechanism to extend its non-application.
The situation of low demand by the industry, the good winter temperatures and the fact that the warehouses are practically full today means that the price has been falling sharply in recent weeks.
This means that all Spaniards will pay less on their electricity bills, especially those on the free market who will no longer pay compensation.
There could still be some cold spells that push up demand and the price, but it is normal that in April and May with even higher reference prices of 60 and 65 €/MWh the mechanism will no longer apply.