Wednesday, December 7

A stabilized PVPC based on the year: the Government’s plan to lower the price of the regulated electricity market


Last April, the UN published a report detailing how the war in Ukraine had affected the food, energy and financial systems. In it he pointed out that, in the short term, governments “can manage price increases to protect consumers.” Now, the Spanish Government is preparing to comply with this recommendation through a new system for calculating the price of electricity in the regulated market that avoids fluctuations. It is also one of the conditions established by the EU to approve the Iberian exception.

a new calculation. The idea of ​​the Ministry for the Ecological Transition is that when setting a price, instead of using a specific day as a reference, three more stable time references are used: monthly, quarterly and annual average. This decision comes more than a year after the establishment of the new structure of the PVPC (Voluntary Price for Small Consumers), which replaced the previous quotas with a single one divided into peak, flat and off-peak time periods.

Spain paid for electricity 44% more expensive than Europe during half of 2022. The question is whether the

Greater savings for the PVPC rate. In addition, in the calculation of the averages, the annual references, the most stable, will have a greater weight, in order to avoid the enormous fluctuations of the PVPC rate. In this way, the Executive foresees that the oscillation between the most expensive hour and the cheapest, currently located at 27%, will be reduced to 17%. Specifically, for the owners of the 9 million supply points with a regulated tariff, the price would be reduced to an average of 2.5 euros/MWh.

Therefore, if a house consumes 3,272 megawatts per year, the savings would be just over 8 euros/MWh. However, although it seems a small figure, it should be noted that what this measure really seeks is to stabilize the prices of the regulated market, which, according to the Government, would be achieved.

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progressive application. This measure, which the Government has put out for public consultation until November 7, will be applied progressively: its representativeness in the market is expected to be 25% in 2023, 40% in 2024 and 50% in 2025. In this way, the Executive hopes to protect the variation in prices of the daily market and encourage “the displacement of demand” to cheaper hours as well as the use of renewable energy.

Possible comeback of the regulated rate Although it is true that the rise in the electricity price has been generalized, in 2021 this increase was 32% for customers with a PVPC rate, while for those on the free market it was 14%. On the other hand, according to the CNMC (National Markets and Competition Commission), that year a total of 1,250,000 consumers decided to change the PVPC rate for the free market, numbers considerably higher than the 660,000 in 2019 and the 575,000 in 2020 The question now is whether, with this change, the Government will achieve the opposite effect.

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