MADRID, June 14 (Xinhua) -- The average price of electricity on Spain's wholesale market fell by 22 percent from 214.05 euros (223 U.S. dollars) per megawatt hour (MWh) to 165.59 euros on Tuesday.

       The drop came on the first day of the application of the so-called 'Iberian exception' for energy costs, which the Spanish and Portuguese governments have recently negotiated with the European Union (EU) citing the high use of renewable energy sources in the region, which means that gas plays a much less important role in generating electricity.

       The agreement, which was approved by the Spanish government on May 13, sets the price of gas at 40 euros per MWh, with an average price of 48 euros per MWh for the next 12 months.

       However, despite the fall in electricity costs, the average price of electricity on Tuesday was still 82 percent higher than the 90.95 euros per MWh charged a year ago.

       Teresa Ribera, Spain's minister for ecological transition, defended the mechanism on Tuesday, saying it meant that in Spain "will have a significant reduction in our bills tomorrow because we will be paying for energy at a lower price."

       Speaking after Tuesday's cabinet meeting, she added that the government was also considering a 'windfall tax' on excessive profits made by energy companies during the current crisis.

       Spiraling electricity and gasoline prices are two of the main reasons that the rate of inflation in Spain currently stands at 8.7 percent, after climbing 0.8 percent in May.