Average price of electricity in Spain crashes to lowest level of 2023 on Thursday, November 2

Image of an electricity meter.

Image of electricity meter. Credit: Jittawit21 / Shutterstock.com

THE average price of electricity for regulated tariff customers linked to the wholesale market in Spain falls to the lowest level of the year on Thursday, November 2.

Compared to Wednesday 1, the price will drop by 2.4 per cent. According to provisional data from the Iberian Energy Market Operator (OMIE), in the auction, the cost of energy in the wholesale market – the so-called ‘pool’ – will stand at €4.42/MWh.

Graph showing hourly electricity prices. Credit: OMIE

Tomorrow’s minimum price of €0.06/MWh will occur between the hours of 4 am and 5 am, while the maximum price will be recorded between 8 am and 9 am, at €10/MWh, and then again between 7 pm and 9 pm.

Hourly electricity prices on Thursday 2

From 01:00 to 02:00 hours: €4.3/MWh

From 02:00 to 03:00 hours: €0.77/MWh

From 03:00 to 04:00 hours: €0.06/MWh

From 04:00 to 05:00 hours: €0.09/MWh

From 05:00 to 06:00 hours: €1.6/MWh

From 06:00 to 07:00 hours: €4.3/MWh

From 07:00 to 08:00 hours: €5/MWh

From 08:00 to 09:00 hours: €10/MWh

From 9:00 a.m. to 10:00 a.m.: €4.55/MWh

From 10:00 to 11:00 a.m.: €4.3/MWh

From 11:00 a.m. to 12:00 p.m.: €4.3/MWh

From 12:00 to 13:00: €4.3/MWh

From 1:00 p.m. to 2:00 p.m.: €4.3/MWh

From 2:00 p.m. to 3:00 p.m.: €4.3/MWh

From 3:00 p.m. to 4:00 p.m.: €3.8/MWh

From 4:00 p.m. to 5:00 p.m.: €4.3/MWh

From 5:00 p.m. to 6:00 p.m.: €4.3/MWh

From 6:00 p.m. to 7:00 p.m.: €4.5/MWh

From 7:00 p.m. to 8:00 p.m.: €10/MWh

From 8:00 p.m. to 9:00 p.m.: €10/MWh

From 9:00 p.m. to 10:00 p.m.: €4.55/MWh

From 10:00 p.m. to 11:00 p.m.: €4.3/MWh

From 11:00 p.m. to 12:00 p.m.: €3.8/MWh

Compensation to the gas companies must be added to the average price of the ‘pool’. This has to be paid by the consumers who are beneficiaries of the measure, the consumers of the regulated tariff (PVPC) or those who, despite being in the free market  have an indexed rate.

However, this is once again at €0/MWh, a situation that has been repeated since February 27.

What causes energy prices to fluctuate?

This sudden drop in the cost of energy in Spain is due to the recent presence of storms across the country. In turn, they have assisted with renewable generation, especially wind power.

In the final days of October, the upward trend of electricity prices was halted thanks to these storms. As a result, the average of the electricity market for the month closed at €90.14/MWh, almost 13 per cent lower than the €103.34/MWh registered in September, according to lasprovincias.es.

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

The Iberian extension was extended until December 31

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.

A new system will come into force on January 1, 2024

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’.

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Written by

Chris King

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. Got a news story you want to share? Then get in touch at editorial@euroweeklynews.com

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