By Jennifer Leighfield • 29 March 2021 • 1:09
Price of electricity and gas going up again
THE price of electricity is rising again this month in Spain and will be 12 per cent higher by the end of March than it was in February.
The electricity bill of an average user is up to around €55.20 per month in March, which is 12.6 per cent more than in February and 16 per cent more than in March last year, according to the National Markets and Competition Committee.
The price remained somewhat stable in February, following the rise in January caused by the cold spell and storm Filomena.
The reasons behind the rising electricity prices in March, according to a report in national Spanish daily 20 minutos, are the fact that wind production of electricity has fallen and had to be covered by combined gas cycles, an expensive raw material which must also compensate for CO2 emissions.
Comparing with last year, another reason is because demand fell during the State of Alarm.
Electricity began rose in April 2019, although this was followed by 19 months of falling prices, the two months of rises, in December 2020 and January 2021, and then another drop in February this year.
The rises and falls are due to production costs, which rise when less energy is being produced by renewable sources such as wind and water, as it has to be made using fossil fuels such as gas or coal. The price of petrol also influences production costs.
Meanwhile, the price of butane gas bottles (bombonas) in Spain is also continuing to rise, and is now at €13.96, the highest since January 2019, and it is expected to continue to rise.
Since November last year, the price has gone up by nearly €2, affecting those who use butane gas for heating, hot water and cooking, and added to the abovementioned rise in the price of electric.
The 4.96 per cent rise in the cost of a butane gas bottle, which almost the maximum permitted, could occur again in May to compensate for the higher price of gas and transporting it.
The Consumer Organisation, OCU, has recommended that families who are having financial difficulties should check if they are entitled to benefits to help pay their energy bills.
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Jennifer Leighfield, born in Salisbury, UK; resident in Malaga, Spain since 1989. Degree in Translation and Interpreting in Spanish, French and English from Malaga University (2005), specialising in Crime, Forensic Medicine and Genetics.
Published translations include three books by Richard Handscombe. Worked with Euro Weekly News since November 2006. Well-travelled throughout Spain and the rest of the world, fan of Harry Potter and most things ‘geek’.
I am going to quote the article above “Prices rising again”, unnamed, concerning repeated increases in electricity prices in Spain :
“Comparing with last year, another reason (behind the rising electricity prices in March – my remark)n is because demand fell during the State of Alarm”
According to investopedia.com (apparently quoting extensively Adam Smith and Alfred Marshall but not mentioning their names): “Law of supply and demand describes the way in which (…)the price of goods tends to increase when (…)when the demand for that good increases (making that good more sought after). Conversely, it describes how goods will decline in price when they become (…) less popular among consumers. This fundamental concept plays an important role throughout modern economics”.
Now it seems I am missing something or…your article gives full credit to a phony excuse provided by electricity suppliers without giving us readers one word of critical comment. Prices increased again because demand fell? Then, in response to the higher price, demand will fall again and that will certainly justify another, third, increase in electricity price. And this is how you will likely explain it again. Irresistible logic. But that leaves us with a question: does the law of supply and demand apply also to Spain?
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