Saturday, November 27

The wholesale electricity market shoots up again and marks its highest price in a month

The average price of the wholesale electricity market is going to skyrocket again this Thursday, rising by 16.48% in a single day, to 226.94 euros per megawatt hour (MWh), according to data from the Iberian Electricity Market Operator (OMIE). With this rise (of 32.1 euros in one day), the pool once again exceeds the 200 euro barrier for the first time since last October 28. It is the sixth highest price in the historical series and the highest since October 18.

After a few weeks of relative truce, the so-called pool has returned to levels similar to last month’s records, although still far from the 288.53 euros on October 7, the highest reached so far.

The cause is, again, the price of natural gas, which this Wednesday has once again exceeded the barrier of 100 euros / MWh in the Dutch TTF market after the decision of Germany, known on Tuesday, to temporarily suspend the certification process of the controversial Russian Nord Stream 2 gas pipeline, which will directly link this country with Russia through the Baltic Sea and bypassing Ukraine. Added to this is the price of CO2 emission rights, again at historical highs and already above 67 euros per ton, according to data from SendeCO2.

Electricity triggered the CPI in October to the highest rate in 29 years and the Government maintains that the promise that this year the receipt will end at levels similar to those of 2018 will be fulfilled, after correcting the cut in extra income from the electricity companies due to the increase in gas that it approved in September. The latest barometer of the Center for Sociological Research (CIS) published this Wednesday reflects that 69.7% of Spaniards support a public intervention to control the price of electricity.

According to the latest barometer of the body chaired by José Félix Tezanos, 83.2% of those surveyed by the CIS consider that the current system for fixing the price of electricity is totally (50.7%) or quite incorrect (32.5 %). For 7.2% of the population, the rise in energy rates is among the main problems in Spain, compared to 3.4% in the previous barometer. According to the CIS, 64.9% are “very” concerned about this rise and 27.3% quite concerned. 97.5% of those surveyed consider that electricity should be considered a basic consumer good, such as water.

Despite the escalation, there is 10.1% of respondents who assure that their receipt has not gone up “at all”. Another 21.8% say they have done it “a little”. For 28.5% it has risen “quite a lot” and for 19.7% it has risen a lot. And it is that the records of the wholesale electricity market are directly reflected in the consumers who are in the regulated tariff or voluntary price to the small consumer (PVPC), where 40% of the low voltage supplies are, and for which the cost of energy is directly indexed to that of the so-called pool.

Most of the low voltage supplies, 60%, are in the free market, which are not immediately affected by these increases, although they will eventually do so. These clients, who historically have had rates higher than those in PVPC, are for now outside the universe that the National Institute of Statistics (INE) takes into account to calculate inflation. This body will change its methodology to calculate the CPI in January and will include supplies in the free market.

After correcting the cut approved in September, by leaving bilateral contracts out of the reduction in extra income from non-CO2 emitting technologies, the Executive has put on the table that renewable producers who have a guaranteed remuneration (with a 7.4% profitability) can advance the return of the extra income that they must repay in the future as a result of the pool rises. But the measure has not found consensus, as admitted a few days ago by the third vice president, Teresa Ribera.

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