The price of electricity is very important for society at large. In particular, the creation of the EU’s Internal Electricity Market began towards the middle of the 1990s, with the aim being to pass on the benefits of the liberalisation of the energy sector, involving better prices and services, to households and businesses alike.
This was the scenario that gave rise to the steady introduction of organised markets throughout the length and breadth of Europe.
OMIE manages the wholesale electricity market (referred to as cash or “spot”) on the Iberian Peninsula. Like any other market, the electricity market caters for the purchase and sale of electricity among its agents (producers, consumers, retailers, etc) at a publicly stated and transparent price.
The prices of electricity in Europe are set daily (every day of the year), at 12 noon, for the twenty-four hours of the following day, in what we call the Daily Market. The price and volume of energy at a specific time are determined by the point where the supply and demand curves meet, applying the marginal pricing model adopted by the EU and an algorithm approved by all the markets in Europe (EUPHEMIA).
The agents may subsequently repeat the sale and purchase of electricity through the so-called Intraday Market; in other words, at different trading sessions a few hours in advance of real time.
For further details on how the market works, please click here.