Saturday, September 25

The price of electricity chains its fourth consecutive record and is already shooting above 140 euros / MWh

Follow the nightmare of records in the wholesale electricity market. The average price of the so-called pool will chain its fourth consecutive historical maximum this Thursday, standing at 140.23 euros per megawatt hour (MWh), 5.86% above the 132.47 euros on this Wednesday. The pool pulverizes the barrier of 140 euros and is thus on the way to repeating the streak of the second week of August, when in the heat of the heat wave it chained five highs and made full of records on weekdays.

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The new record is reached with the reference of gas in the Iberian market Mibgas already on the verge of 52 euros / MWh and with the quotation of the Dutch market TTF (reference for this raw material in Europe) at record levels due to Asian demand, the supply problems from Russia and low storage levels heading into winter. For its part, the ton of carbon (which makes electricity generation with gas more expensive) this week exceeded 61 euros for the first time in history, compared to around 30 euros at the beginning of the year.

The price of this Thursday more than triples the 44 euros of the first Wednesday of September 2020, according to OMIE data. Throughout the day, the price will remain above 130 euros / MWh. The most expensive time will be 10 at night, when it will be at 148 euros / MWh.

The pool once again pulverizes all the records after the succession of records in August, when it stood at a monthly average of almost 106 euros / MWh, with hydroelectric, and not natural gas, dominating the matching in the marginal market, taking advantage of the high prices offered by combined cycles. August has ended with the most expensive electricity bill in history, with the consequent effect on inflation, which has shot up 3.3%, its highest in almost ten years, putting upward pressure on the revision of pensions and the minimum interprofessional salary (SMI), whose revision the social agents have begun to negotiate this Wednesday and for which the President of the Government, Pedro Sánchez, confirmed an “immediate rise” this Wednesday.

Specifically, in August, the average bill has shot up 46% year-on-year and 9.1% compared to July, to stand at 93.10 euros for the average user covered by the semi-regulated rate of the voluntary price to small consumers ( PVPC), according to Facua.

The “complex situation of the energy sector and the wholesale market” have focused part of the opening speech of the political course of the President of the Government, Pedro Sánchez, who this Wednesday assured that the Executive “takes charge of social concern” and “has acted, acts and will continue to act until solving the rise in energy prices “, always within the European framework, in an expression of support for the struggle between the third vice president and minister for the Ecological Transition, Teresa Ribera, and Unidos Podemos, that asks to intervene the light and ensures that there is scope for it in the EU.

The Government, which is preparing a reform of the PVPC to (at the cost of a higher risk premium for the consumer) to make it less dependent on the volatility of the pool, to which it has directly indexed the cost of energy, has recognized that with the projections Currently, the PVPC is going to skyrocket in 2021 by 25% compared to 2020, when the wholesale market collapsed due to the pandemic.

Sánchez has asked the political groups this Wednesday to allow the rapidity of the two structural measures proposed by Ribera to make electricity cheaper: the fund to remove the premiums for the oldest renewables from the bill and the mechanism to drain the extra income they receive nuclear and hydroelectric plants due to the increase in cost of CO2, which benefits them because they do not have to pay for it.

The escalation has opened a debate on the need to reform the electricity market, forcing the government to consider having a public company manage the hydroelectric concessions as they expire. This Wednesday, deputy Juan López de Uralde, from Alianza Verde, the environmental party integrated in United We Can, has asked Transición Ecológica to start up a public registry of hydroelectric concessions with the expiration dates of the dams “and the income obtained by the companies for their exploitation ”.

And he has again urged “to recover those concessions, as the permits of the electricity companies expire, to guarantee that there is no speculation with a basic good such as energy”, since, according to the deputy, “of the government practical and concrete solutions are expected, and not appeals to the empathy of the oligopoly ”.

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