The wholesale price of electricity is still not reaching a ceiling and will set a new record tomorrow for the second day in a row. A) Yes, The amount will average 111.88 euros per megawatt hour (MWh) during the day on Tuesday, August 10. After setting levels never seen before in Spain on Monday and registering an average of 106.74 euros per megawatt hour (MWh), the cost of electricity continues to climb and draws an upward trajectory in the second week of August. In fact, today I already know had surpassed the previous record of 106.57 euros per MWh, which was registered on July 21. According to the data collected in the Iberian Electricity Market Operator (OMIE), the price set for tomorrow’s session is three times the one registered exactly one year ago, when the 38.88 euros per megawatt hour were recorded.
Throughout the whole day tomorrow, including the cheapest ‘off-peak’ hours in the early morning, the price will remain above 100 euros per megawatt hour and will mark its daily maximum in the most expensive ‘peak’ band that goes from 20 hours at 10 pm, when it will reach 120 euros per MWh. On the contrary, the daily minimum will be registered in the hourly period that goes from 4:00 p.m. to 5:00 p.m., up to 102.02 euros per MWh.
The price of electricity continues without brakes in this start of August and is on the way to exceed the historical records of July, the month that closed with a daily average of 92.42 euros per MWh, that is, at the highest monthly level ever recorded in Spain. And it does not stop there, the new rise in the price of energy comes on the eve of a new heat wave in Spain that will make the use of air conditioning or electrical ventilation devices essential in homes and offices. Industry sources blame this rise, among other factors, the high prices of CO2 emission rights and the rising cost of natural gas. Emission rights have shot up to exceed 54 euros per ton at the beginning of August, when at the beginning of the year they were trading around 33 euros. For its part, the price of natural gas already exceeds 43 euros per MWh, according to data from the Iberian Gas Market (Mibgas).
A shot receipt
In August, the upward trend in the price of electricity continued, which did not cease during the month of July, since the average daily cost did not drop below 74 euros per MWh on any day, with maximum indicators skyrocketing to 106.57 euros per MWh. From the OCU consumer association they calculate that during 2021 households are suffering a strong price increase in electricity supply that has led them to accumulate from January to July 2021 a bill of 470 euros compared to 381.28 euros that an average household added in the same period last year. That is, the receipt is 23% more expensive and means having already paid 89 euros more than in 2020.
This increase in the bill has a direct impact on the almost 11 million households that have contracted the regulated PVPC rate, but also in other rates indexed to the wholesale market. Thus, the price of electricity in the also known as ‘pool’ has a weight of around 24% in the electricity bill for these consumers. In addition, the OCU has detected a strong price increase in many of the offers that marketers offer to new customers. Some of these offers, despite the fact that they are launched with a fixed price, their contract includes the possibility of updating prices when the company considers it appropriate with the stipulated notice, so that the consumer would not have the confidence of having a fixed price guaranteed. , they warn from the consumer association.
For its part, from Facua they demand that the coalition government undertake measures to curb “speculation” in setting electricity rates. The association proposes a decalogue of claims, among them, a change in the rules of the wholesale market auction, the reduction of VAT from 21% to 10% permanently, the control of fraudulent offers from electricity companies and the approval of a new model of social voucher for families. Facua also urged the state to recover expiring hydroelectric power plant concessions, in order to integrate them into a public energy company.
To alleviate the increase in the wholesale price of electricity, the Executive approved in June to reduce the VAT on electricity bills from 21% to 10% and temporarily suspend the tax on electricity generation (7%), paid by generators.
George is Digismak’s reported cum editor with 13 years of experience in Journalism