Spain's market and competition regulator, Comision Nacional de los Mercados y la Competencia, is examining the latest increase in power prices, CNMC's president said Tuesday.
Jose Maria Marin Quemada, in an interview with Spanish national radio RNE, said CNMC was trying to determine whether increased wholesale prices in December have been caused by natural market forces or not, and whether a formal investigation would be necessary.
"Right now, something is going on that is worrying," Marin said, adding the CNMC was looking into what had caused the jump in prices to Eur60/MWh ($62.4/MWh) in December.
Day-ahead prices on the Spanish OMIE exchange, known as the pool and which is used to determine domestic bills, have averaged Eur61.07/MWh so far in December. This compares with an average Eur56.13/MWh in November, Eur52.83/Mwh in October, and Eur43.59/MWh in September.
While certain demand and supply side action by market players has been investigated on previous occasions, the end of the year can also see a drop in renewable output. This can occur because generators can be incentivized to hold back production near the end of the year after their units have met their annual caps.
At the same time, global oil and gas price movements as well as the nuclear situation in France have been affecting Spanish prices.
It is not the first time Spanish prices have spiked in December.
The most notable recent incident took place in 2013 when wholesale prices increased 60% in the week prior to quarterly auctions, known as CESUR, that were used to determine the price that around 20 million consumers would pay for their power in the upcoming quarter. Prices spiked to a 10-year high of Eur93.11/MWh before dropping back immediately after the auction.
Following that, CNMC launched an investigation and in 2015 fined Iberdrola Generacion Eur25 million for manipulating the market through the use of its hydroelectric units on the rivers Duero, Sil and Tajo. The fine is still under appeal.
With the latest case, Marin said: "If we found it to be the case, we would act like we did in the past."
