The average price of electricity in the wholesale market fell this Sunday for the second consecutive day to an average price of 110.02 euros per megawatt hour (MWh), compared to 114.63 euros this Saturday .
With this decline, the price of electricity ends a week in which there have been five consecutive days of historical increases, between Monday and Friday, although it continues to skyrocket. Last year at this time, the average price was 31.55 euros MWh, so the increase is 248.65%, that is, tomorrow’s price will triple that registered exactly one year ago, according to OMIE data collected by Europa Press.
Since last Monday, historical records in the price of electricity have been recorded day after day, coinciding with the heat wave that is hitting the country, with some of the highest temperatures ever recorded in Spain.
This context of climate change is also one of the main causes of the continuous rise in energy prices, since it responds to carbon dioxide (CO2) emission rights, which seek the transition towards a renewable energy model.
The electricity pool will register for Sunday, August 15, an average price of 110.02 euros / MWh and, unlike other days, there will be time slots in which it is below 90 euros / Mwh.
The daily maximum will be from 00:00 to 01:00 (124.91 euros / MWh), while the minimum will be between 17:00 and 18:00 (84.47 euros / MWh).
Last July, the price of electricity closed at an average of 92.42 euros / MWh, which is the highest level in history and 166.8% above the same month last year.
So far in August, the ‘pool’ has registered eight records: the five that it marked between Monday and Friday of this week, and those experienced on Monday, Tuesday and Wednesday of last week.
CO2 rights and gas prices
The increase in the price of the electricity market is motivated by the high prices of emission rights and the increase in the cost of natural gas.
Specifically, emission rights have become more expensive to exceed 57 euros per ton on certain days in August, when at the beginning of the year they were trading around 33 euros. Meanwhile, the price of natural gas has already risen to 45 euros per MWh, according to Mibgas data.
The price of energy has a close weight in the bill of around 24%, while around 50-55% corresponds to tolls -the cost of transmission and distribution networks- and charges -the costs associated with development from renewables, to extrapeninsular ones and the rate deficit annuities – and the rest, to taxes.
The fluctuations in the daily price affect consumers covered by the regulated tariff (PVPC), just over 10 million, while those in the free market are exempt -about 17 million-, since they have an agreed price with your company.
According to industry experts told Europa Press, 88% of electricity consumption in Spain is not exposed to the volatility of the price of the ‘spot’ market, as they have contracts with fixed prices, thus being exposed to clients under the PVPC.
In July, a 36% increase in the bill
The electricity bill of an average user has increased by 36.2% in July compared to the same month last year, standing at 85.34 euros, according to data from Facua-Consumidores en Acción.
The reduction in VAT to 10% until December while the average price per megawatt hour is above 45 euros dampens the rise by 8.54 euros. If 21% were still applied, the receipt would have broken all records, reaching 93.88 euros, according to the association’s calculations.
On June 24, the Government approved a Royal Decree-Law as a matter of urgency to reduce the taxes applied to the supply of electricity and, with it, the electricity bill of homes, the self-employed, SMEs and all 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.
In the specific case of VAT, a 10% reduction is applied until the end of the year for all consumers with contracted power up to 10 kilowatts (kW), provided that the average monthly price of the wholesale electricity market is above 45 euros per megawatt hour (MWh).
Regarding the suspension of 7% of the tax on the value of electricity production, which already in 2018 was decided to temporarily suspend for six months to contain another upward wave in the price of electricity, will be in force during the third quarter of this year.
