MIBEL and the Market Splitting - 5th International Conference on the European electricity market

The purpose of this paper is to evaluate the MIBEL (Iberian electricity market) prices and the interconnection capacity between Portugal and Spain during the first five month of Iberian market. With the formal beginning of MIBEL on 1 of July 2007, it becomes possible for any consumer in the Iberian zone to acquire electrical energy under a free competition regime, from any producer or retailer that acts in Portugal or Spain. But in this few month of MIBEL, has the price decreased? The hourly prices in Portugal and Spain are different for the most part of the days, due to market splitting. So what should be the interconnection capacity between this two countries for that the Iberian Peninsula have only one price? This paper shows the results of two scenarios simulations: the Iberian Market and a market splitting scenario (two distinct markets), in the form of prices and interconnection energy exchanges, for the analysis period of 5 months starting in July and ending in November 2007.