By Chris King • 10 September 2023 • 18:13
Image of electricity pylons.
ON Monday, September 11, the average price of electricity for regulated rate customers linked to the wholesale market in Spain will rise by 14.57 per cent compared to today, Sunday 10.
Specifically, the price will stand at €116.94/MWh.
According to provisional data from the operator of the Iberian Energy Market (OMIE), in the auction, the cost of energy in the wholesale market – the so-called ‘pool’ – will stand at €116.94/MWh tomorrow.
The minimum price, of €45.45/MWh, will occur between the hours of 4 pm and 5 pm, while the maximum price will be recorded between 9 pm and 10 pm, at €129.11/MWh.
The rise in prices in most European countries is attributed to various factors, including the increase in the price of gas in international markets.
This fuel is used in combined cycle plants and has a significant impact on determining market prices during most hours of the day. Furthermore, the increase in the value of carbon dioxide (CO2) emission rights also contributes to this situation.
Why does the price of electricity change hourly?
Electricity bill prices are flexible and linked to the wholesale electricity market. For this reason, the price of electricity in each time period is determined based on the energy demand at that moment. This gives rise to a constant variation in the cost of electricity throughout the day.
For example, during periods of high demand due to more extreme cold temperatures for heating or extreme heat for air conditioners, prices tend to rise.
Additionally, it is important to consider that expenses associated with adjustment services, charges, capacity payments, marketing, tolls and interruptibility pricing, among others, may vary the price from one hour to the next.
With the entry into force in January 2024 of the new methodology for calculating the new regulated electricity rate, it is expected to give more stability to the electricity market
On Tuesday, March 28, Spain’s Council of Ministers approved the extension of the Iberian exception until December 31, after the agreement was reached by Spain and Portugal with the European Commission.
It is not excluded that the deal could be extended for a longer time if the said framework is also extended.
In a meeting of the Council of Ministers on Tuesday, June 13, the government spokesperson, Isabel Rodríguez, confirmed the approval of a new system for calculating the regulated tariff.
This will be known as the Precio de Venta al Pequeño Consumidor (PVPC). It will come into effect on 1 January 2024.
The new regulated tariff will take into account various corrective factors to reflect the daily market price, establishing more stable prices three months and one year in the future.
This will make it possible to establish a price that can work in the medium and long term, avoiding drastic fluctuations. However, short-term price references will also be maintained to encourage savings and efficient consumption.
With this new calculation, it will no longer be linked to the daily electricity market and will start to be calculated on the basis of long-term pricing. As the Minister for Territorial Policy pointed out: ‘Consumers should be reassured because they do not have to do anything’.
Using an appliance correctly can help to save money on the electricity bill. Many items nowadays are equipped with energy-saving modes which can assist homeowners in saving money.
Some household appliances consume more electricity than others, in general. Although not all homes have a dishwasher, they can be one of the worst protagonists.
According to calculations from the Spanish Consumers Organisation, (OCU), this appliance can consume up to 246 kWh per year, which represents approximately 7 per cent of total energy consumption and translates into up to approximately €74 extra on the annual electricity bill.
Washing machines can also consume up to 255 kWh per year, that is, an extra €77 on the annual bill. Finally, the refrigerator has an average consumption of 662 kWh per year, which means an increase of approximately €199 in the annual rate in the case of the PVPC.
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Originally from Wales, Chris spent years on the Costa del Sol before moving to the Algarve where he is a web reporter for The Euro Weekly News covering international and Spanish national news.
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