The free electricity market closes in substantial balance, while in 2021 it produced margins of €1.6 billion. This negative performance was mainly driven by an unexpected and exogenous open position for about 13 TWh of electricity, represented by 6 TWh of higher sales and 7 TWh of loss of hydropower production due to a persistent drought.
Added to this, particularly in early 2022, were the effects of a 10% unhedged position of about 6 TWh, a level in line with our risk policies. The 19 TWh thus determined were hedged through a combination of generation from thermoelectric sources and market purchases, with an overall increase in procurement cost of 4.3 billion euros. The Group, in this context, decided to fully honor contracts with customers, so as to protect them from the volatility of the energy market, reflecting in revenues only 60% of these higher costs.
Associated with these factors is the decrease in the regulated electricity market, to be mainly related to lower prices associated with green certificates and the change in status of a coal-fired thermoelectric plant located in the south of the country that is no longer considered a "must run."
The gas business shows a decrease in margins of 0.3 billion euros as a result of the revision of the prices of some multi-year supply contracts, which entails positive impacts in the coming years.
Finally, the aforementioned negative dynamics were partially offset by the optimization of both the electricity and gas portfolio executed by trading activities and increased generation services for approximately EUR 0.9 billion.
As for Iberia, on the other hand, during 2022 there was a growth of EUR 1.3 billion (+56.5%) in EBITDA from integrated position, which thus amounted to 3.6 billion euros at the end of the year. The components are represented in the following table: