Saturday, September 25

The price of electricity falls slightly but marks the second highest record in history

The average price of electricity in the wholesale market will be 118.99 euros per megawatt hour (MWh) this Friday, 3% below the historical maximum of this Thursday. Despite the slight drop, it is the second highest record in history, only surpassed by the record of 122.76 euros / MWh this Thursday, when it will be hydroelectric energy again, and not water, the one that matches supply and demand in the most expensive hours of the day.

For this Friday, the price of electricity will mark a maximum of 125.33 euros / MWh (at 1 am) and a minimum of 106.75 euros / MWh (at 6 pm), according to data from the Iberian Market Operator of Electricity (OMIE).

Compared to a year ago, the average daily price of electricity for this Friday triples the levels that it marked for the same dates in August 2020, when it was 39.8 euros / MWh. That month, with demand still sunk by the pandemic, the average wholesale market price was 36 euros. This month it will close above 100 euros, an unprecedented figure, after breaking six all-time highs throughout this month.

This upward spiral has led the political debate to focus on how to lower the price of electricity, an issue on which Más País, Compromís and Nueva Canarias have registered a petition in Congress to open a parliamentary investigation commission.

In case ingredients were missing for the controversy, the National Markets and Competition Commission (CNMC) announced on Thursday, on the eve of the new record, that some electricity marketers, which the body did not identify, have taken advantage of the entry into force of the new rates on June 1 to raise their rates by applying penalties of up to 30% in the price of energy. The consumer organizations Facua and OCU demand to know which companies they are.

Before this spectacular spiral of increases, energy weighed on the bill around 24% (now around a third), while around 50-55% corresponded to tolls – the cost of transmission and distribution networks – and charges -the costs associated with the promotion of renewables, extra-peninsular ones and the annuities of the tariff deficit- and the rest, taxes.

The fluctuations in the daily price directly affect consumers covered by the regulated tariff (PVPC), just over 10 million, for which the cost of energy is directly linked to the prices of the so-called pool. The electricity companies have asked to reform this rate, which despite being subject to these ups and downs is the least expensive, according to experts, the CNMC and the Government.

The spiral of increases in the bill, the political anger generated, the tensions within the coalition Executive and the excessive remuneration that, according to many observers in the sector, the daily auction of the wholesale market grants to the hydroelectric plant, have led the Government to open the door for the first time for a public company to manage expired hydroelectric concessions. In addition, this week Unidos Podemos has transferred to the Ministry for the Ecological Transition a proposal to lower the electricity bill that would limit the price of nuclear and hydroelectric energy by decree law.

This proposal, which according to Ecological Transition raises doubts with European regulations, is in addition to the bill proposed by the Government to drain the excess remuneration of hydro and nuclear due to the increase in the cost of the CO2 market. This is, together with the future fund to remove the cost of the premiums for renewables from the receipt, the great bet of the Teresa Ribera department to lower the price of the receipt, although it will take months to come into effect and high gas prices are expected until the beginning of the the next year.

The third vice president, Teresa Ribera, is expected to appear in Congress next Monday to explain the measures of her department to stop the spectacular rise in electricity, which has already eaten up the VAT reduction on the receipt and the temporary suspension of the tax. to the generation approved by the emergency government in June.