This is how the consumer market has changed after twelve months of incessant increases and exceptional measures
For just a year now, the price of electricity has not stopped rising. With some weak stops, such as those in January and February –until the Russian invasion of Ukraine began–, but without a break. An upward trend that has had a major impact on the pockets of all citizens, who have seen how their receipts incorporated increasingly higher amounts. These are the great changes that consumers have faced.
Massive jump to the free market
1.2 million in a year
If there is something that has transformed the Spanish electricity market in this energy crisis, it has been the passage of contracts from the regulated market to the free market. The vertigo in the face of a tariff such as the PVPC (Voluntary Price for Small Consumers), which has not stopped increasing, has caused around 1.25 million people to go from the regulated electricity tariff, which is indexed to the wholesale market, to one on the free market at a fixed price. This is indicated by the National Commission for Markets and Competition (CNMC), whose updated statistics reveal that in 2020 there were 575,000 transfers of this type and in 2019 about 660,000. Likewise, the CNMC recalls that in October 2021 around 60% of electricity consumers (about 18 million) had a fixed-price supply contract, which allowed them to maintain the agreed prices until the date of revision of their contracts. On the contrary, 40% of consumers with contracts indexed to the wholesale market price would have experienced a price increase of 45% in 2021, an increase of around 229 euros compared to 2020 for an average consumer.
less fixed weight
energy counts more
Another of the major changes in receipts in the last year has been the structure of the invoice itself. Usually, a third of it was destined to the payment of taxes, another third to the fixed part (power), and the rest, to consumption. However, the weight that this last item has taken in the receipt as a whole has risen to 70% of the total. This change has been possible thanks to the fiscal measures approved by the Government in recent months. On the one hand, the Executive applied a VAT reduction from 21% to 10%. This is an action that has been extended until June 30, after the evolution of the cost of energy has eaten up the impact of the drop in this tax. The same has happened with the suspension of the special electricity tax, which has dropped from 5.1% to 0.5%, the legal minimum required by the EU. In addition, the Executive has applied a reduction in charges (the fixed amount of the receipt that is destined to pay the first renewables or to amortize the electricity deficit, among other items).
ironing at dawn
To make matters worse, since June 1, new time slots have been in force that penalize consumption or reward it to a certain extent. Off-peak hours are from 00:00 to 08:00, as well as on weekends. The rest of the day the energy cost rises considerably, especially after 6:00 p.m.
More discount, more users
This is another of the most important variations that consumers have faced in the last year. When the crisis began, there were 1,161,214 households that were covered by the social bonus: a discount of between 60% and 70% on the energy consumed part of the receipt, depending on the socioeconomic situation of the family that has requested it. Before, it was at 25%. The statistics of this aid have been changing considerably to exceed 1.2 million current beneficiaries.
During the last year, the weight acquired by combined cycle power plants (those that run on gas) has been increasing as the months have passed, until they represent 18% of the demand for electricity consumption. Until 12 months ago, its weight in the whole of the electricity ‘mix’ was around 15%, according to REE data, due to the lack of activation of renewable plants.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.