Wholesale market electricity price in Spain to reach historical high as heatwave hits country

The wholesale electricity price in Spain rises to an historical high as heatwave hits the country.

The price of electricity in the wholesale market will peak to a historical high this Sunday- driven by the heatwave that is forecast to affect the whole Iberian peninsula.

The maximum price will be set today, Sunday, July 11, at 103.63 euros / MWh and the minimum at 67.98 euros / MWh, according to data from the Iberian Electricity Market Operator (OMIE).

Industry sources attribute this maximum to a combination of factors, such as the heatwave that is extending this weekend over a large part of the peninsula, the costs of CO2 emission rights – which have exceeded 50 euros per ton -, and the rise in the price of gas.

These factors outweigh the fact that it is a Sunday, a day in which industrial activity is significantly reduced and power demand is normally reduced.

These high prices penalise the industry and individuals, especially the 10.5 million eligible for the voluntary price for small consumers (PVPC), who see how the price cap measures adopted by the Government, a reduction in IVA, are not yet causing the desired effect.

Consumers who are in the free market are exempt — some 17 million—, since they have a fixed price agreed with their company.

It should be remembered that in July the measures for the temporary suspension of the 7% tax on electricity generation for the third quarter of this year came into force. To this should be added the VAT reduction from 21% to 10% applied to contain the cost of the electricity bill.

The price of energy adds to the electricity bill by around 24%, while around 50-55% corresponds to tolls (the cost of transmission and distribution networks) and charges (the associated costs to the promotion of renewables, to extra peninsular ones and to the annual payments of the tariff deficit), while a little more than 21% corresponds to taxes.

The fourth vice president of the Government and Minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, warned a few days ago that the high electricity prices registered in recent weeks, as well as the impact that it has produced on both domestic and industrial consumers, will remain for the next few months.

The minister stated that her main objective is to alleviate the negative effect that these prices are causing on consumers, although she has admitted that this situation will continue to persist over time.

In her opinion, the solution is to ensure that 100% of the electrical system is capable of being supplied without depending on international fuels and the costs of carbon dioxide (CO2) emission.

Thank you for taking the time to read this article, please remember to come back and check The Euro Weekly News website for all your up-to-date local and international news stories.