Thursday, September 16

The price of electricity climbs this Friday to 117.14 euros / MWh and touches another all-time high

No truce in the wholesale market. The average daily price of electricity in the so-called pool will chain its third rise this Friday, with a rise of 3.3% compared to Thursday, and will remain at the gates of a new historical maximum with 117.14 euros per megawatt hour (MWh).

It is the second highest price in the historical series, only surpassed by that of last Friday, August 13, when it reached 117.29 euros / MWh in the heat of the heat wave.

The electricity pool will register for tomorrow a minimum above the level of 100 euros / MWh (104.07 euros / MWh) -between 5:00 p.m. and 6:00 p.m.-, while the maximum time will be between 9:00 p.m. and 6:00 p.m. 10 pm, with 126.14 euros / MWh, according to OMIE data collected by Europa Press.

In this way, the price of electricity remains at the historical levels that were recorded during the past week, in the heat of the heat wave, after having fallen slightly at the beginning of the week to records below 90 euros / MWh.

So far in August, the ‘pool’ has smashed all the records seen so far, pointing, when its equator has already been exceeded, at an average price for the month above 100 euros / MWh. The first five days of last week marked a maximum figure after another, with that historical level, until now, on Friday, August 13, of an average daily price of 117.29 euros / MWh.

Last week’s upward spiral led the political debate to focus on how to lower the price of electricity. In fact, the Government opened the door to create a public energy company, as has been requested for some time by its partner in the Executive, United We Can.

This context of increases in the electricity pool is marked by the increase in the prices of CO2 and gas rights, to which has been added the increase in demand due to the heat wave of recent days.

CO2 emission rights have become more expensive to exceed 55 euros per tonne so far in August, when at the beginning of the year they were trading at around 33 euros. Meanwhile, the price of natural gas is around 45 euros per MWh, according to Mibgas data.

More energy weight

The price of energy normally has a weight in the bill of around 24%, while around 50-55% corresponds to tolls -the cost of transmission and distribution networks- and charges -the costs associated with the promotion of renewables, extrapeninsular ones and the annuities of the tariff deficit- and the rest, with taxes. However, the spectacular rise in the wholesale market has meant that the weight of energy has increased in recent weeks.

The fluctuations in the daily price directly affect consumers covered by the regulated tariff (PVPC), slightly more than 10 million, and also ends up being transferred to those who are in the free market -about 17 million-, since they have a price agreed with your company. Power companies have asked to reform the PVPC so that it is not so exposed to the wholesale market, an option that the government is studying. This rate is still the least expensive for the consumer.

On June 24, the Government approved a Royal Decree-Law as a matter of urgency to reduce the taxes that are applied to the supply of electricity and, with it, the electricity bill of homes, the self-employed, SMEs and the group of companies, which entail the reduction of VAT on electricity from 21% to 10% until the end of this year and the suspension of the 7% tax on electricity generation for three months.

In the specific case of VAT, a 10% reduction is applied until the end of the year for all consumers with contracted power up to 10 kilowatts (kW), provided that the average monthly price of the wholesale electricity market is above 45 euros per MWh.

Regarding the suspension of 7% of the tax on the value of electricity production, which already in 2018 was decided to temporarily suspend for six months to contain another upward wave in the price of electricity, will be in force during the third quarter of this year.

The electricity bill of an average user in August will be “the most expensive in history”, with an increase so far this month of 43.7% compared to the same period last year, according to data from Facua-Consumidores in action.

According to estimates by the consumer association on the PVPC, the first 15 days of August reflect a monthly bill for the user of 91.62 euros, with that rise of almost 44% compared to the 63.77 euros in August of the year last, despite the recent VAT cut.