Friday, September 24

The price of electricity shoots up this Thursday to another historical record and reaches 122.76 euros / MWh

The average daily price of electricity in the wholesale market will skyrocket this Thursday to a new historical record, reaching 122.76 euros per megawatt (MWh), pulverizing the previous record of 117.29 euros / MWh on August 13. It is the sixth all-time high so far in August.

For this Wednesday, the price of electricity will mark a maximum of 129.81 euros / MWh -from 10.00 p.m. to 11.00 p.m.- and a minimum of 119.95 euros / MWh -from 04.00 a.m. to 05.00 a.m.-, according to data from OMIE collected by Europa Press.

The prices for Spain and Portugal (which share the electricity market) are higher than those of the wholesale markets of France (93.2 euros / MWh), Germany (92.6 euros / MWh) or Greece (118.74 euros / MWh) , but lower than those of Italy (129.63 euros / MWh).

Compared to a year ago, the average daily price of electricity for this Thursday will be 165% more expensive than the levels set for the same dates in August 2020, when it was 46.25 euros / MWh.

So far in August, the ‘pool’ has smashed all the records seen so far, pointing to an average price for the month above 100 euros / MWh. From August 9 to 13, it already had five consecutive highs. This Thursday will add another.

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. The Government opened the door a few days ago to create a public energy company, as has been requested for some time by its partner in the Executive, United We Can.

The purple formation has made a final proposal to the Government this week to lower the electricity bill, which involves limiting the price of nuclear and hydroelectric energy by decree law. The spokeswoman for the Executive, Isabel Rodríguez, indicated on Tuesday that this proposal is going to be studied.

This context of increases in the electricity pool is marked by the increase in the prices of CO2 and gas rights. 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 44.7 euros per MWh, according to Mibgas data.

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 National Commission of Markets and Competition (CNMC) and the Government.

On June 24, the Executive 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 whole 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. The increases in recent weeks have already eaten the effect of those tax cuts and August will close with the most expensive bill in history.