March 20, 2012 / 1:42 PM / 6 years ago

Iberia power rises on coal, gas burn fcasts

* Spain day-ahead base up 4.24 euros to 51.07 eur/MWh

* Demand weak in mild weather

* Hydropower output low after drought

MADRID, March 20 (Reuters) - Benchmark Iberian power prices rose on Tuesday due to forecasts that coal- and gas-burning generators will have to work harder to make up for a drop in supplies of cheaper wind power.

National grid operator REE estimated that coal and gas plants between them would step up output to some 178 gigawatts on Wednesday in Spain, which typically accounts for 85 percent of the Iberian Electricity Market (Mibel), from 122 GWh on Tuesday.

The Mibel’s spot exchange, OMIE, fixed the closely observed “pool” price at 51.07 euros ($67.63) per megawatt-hour, rising from a rate of 46.83 euros set on Monday for Tuesday.

Coal- and gas-fired plants are the last to enter the pool at a daily auction held by OMIE and tend to set the day-ahead price.

Weighing on prices was weak demand for electricity, which in Spain was 679 GWh on Tuesday, compared with 748 GWh on Feb. 20 during a cold wave.

Prices were bolstered, on the other hand, by low levels of hydropower, which was providing just 4.3 percent of Spain’s generation mix on Tuesday, down from an average of 8.6 percent for the past year.

Spain’s Met Office estimates the December-February quarter was the driest since comparable records began in 1947, with rainfall at just 30 percent of normal levels. ($1 = 0.7552 euros) (editing by Jane Baird)

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