The average daily price of electricity in the wholesale market will fall this Sunday by 7.43% compared to Saturday, which accumulates the third consecutive decrease, but will remain above 100 euros per megawatt hour (MWh).
Specifically, this Sunday the average price of electricity will be at 102.03 euros / MWh and will mark a maximum of 128.41 euros / MWh, from 9:00 p.m. to 10:00 p.m., and a minimum of 93.06 euros / MWh , from 4:00 p.m. to 5:00 p.m., according to OMIE data collected by Europa Press .
Compared to a year ago, the average daily price of electricity for this Sunday is multiplied by three compared to August 30, 2020, when it stood at 33.75 euros / MWh.
One record after another so far this month
So far in August, the ‘pool’ has smashed all the records seen so far, pointing to an average price for the month above 100 euros / MWh.
From August 9 to 13, he already marked one maximum figure after another. This week it is even beating the records of two weeks ago, which coincided with this summer’s heat wave, and three of the five daily highs of the historical series have been touched between Wednesday and Friday.
This upward spiral has led the political debate to focus on how to lower the price of electricity. In fact, the Government opened the door to create a public energy company, as has been requested for a long time by its partner in the Executive, United We Can.
In fact, the purple formation has made a final proposal to the Government to lower the electricity bill that passes by limiting the price of nuclear and hydroelectric energy by decree law.
The third vice president of the Government and Minister of Ecological Transition, Teresa Ribera, will appear next Monday, August 30 in Congress to account for this upward spiral in the price of electricity.
This context of increases in the electricity pool is marked by the increase in the prices of CO2 and gas rights, to which has been added the increase in demand due to high temperatures and a lower contribution from renewables, especially wind power due to the absence of wind.
Specifically, CO2 emission rights have become more expensive and are close to 56 euros per ton so far in August, when at the beginning of the year they were trading around 33 euros. Meanwhile, the price of natural gas is around 47 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), slightly more than 10 million, while those in the free market – some 17 million – are exempt, since they have a price agreed 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.
Lower VAT and temporary suspension of 7%
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 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.
August, the “most expensive bill in history”
In fact, the electricity bill of an average user in August will be “the most expensive in history”, with an increase in cost in the first fortnight of 43.7% compared to the same period last year, according to data from Facua- Consumers in Action.
To date, the five highest receipts have been the 88.66 euros for the first quarter of 2012 (with VAT at 18%), the 87.81 euros for January 2017, the 85.34 for July 2021, the 83.55 euros in September 2018 and 82.13 euros in May 2021 -in all cases with VAT at 21% -, according to data from the association.
With the rates applied from August 1 to 15, the average user will pay 27.85 euros more than in August 2020, when the bill stood at 63.77 euros. The reduction in VAT to 10% until December while the average price per megawatt hour is above 45 euros dampens the rise by 9.16 euros. If 21% were still applied, the receipt would have reached 100.78 euros.