Why has electricity in Spain reached an all-time high?

Electricity bills are at all all-time high in Spain as prices for November look set to make it the most expensive month this year. 

Watch out Spanish households. Your next electricity bill is just about to get even juicier. Spain is on the cusp of breaking a new record for the highest electricity prices of the entire year. To make things worse, this is in stark contrast to neighbouring countries including France and Germany, which are registering some of the lowest rates yet.

On Tuesday, November 26 the worrying reveal of record electricity prices had Spanish homes shaking. According to data from the Iberian Energy Market Operator (OMIE), the average price per megawatt hour (MWh) stands at €143.25 euros – an increase of 75.3 per cent compared to Monday. There had been relative stability but this latest peak makes November stand out as quite possibly the most expensive month in the year.

France and Germany have far lower electricity bills compared to Spain

France and Germany are creating some jealousy as their prices are plummeting to low rates of €114.24/MWh and €112.75/MWh, respectively. Italy doesn’t fail to match its usual trends of surpassing Spain with high rates of €150.17/MWh. This exposes some unwelcome realities for Spain, which has enviable potential for renewable energy generation. Despite lucrative uses of renewable energy sources, Spain is clearly prone to changes in market dynamics that depend on seasonal demand. The double whammy comes when bills are not only steeper but have the added extra of inflation to tip the scale.

For more savvy homes, using electrical appliances at certain hours has been a foolproof way to save energy for years. Not any more. Even at the “cheapest” hours of between 1pm and 3pm, prices will still exceed €100/MWh. Avoid the expensive slot between 6pm and 7pm, when rates will skyrocket to an eye-popping €162.07 euros/MWh.

Spain changes how electricity is regulated

There has been changes to the management of electricity via a regulated tariff (PVPC), which combines a mix of long, short and mid term prices. This avoids extreme fluctuations yet is still dependent on market trends, periods of high demand and viability of renewable energy. The PVPC promotes efficiency, and yet for customers on a regulated rate, they will be subject to price hikes, regardless of measures in place.

Whilst the government is getting stuck in to amend things with its electric social bonus and renewable energy incentives, this is not a direct remedy and many households will feel the strain, especially in the run up to Christmas. Despite a period of lower rates, this news gives the sensation that we can’t sit back on our haunches and enjoy the continual relief of low electricity bills. Oscillations look set to be on the cards, yet hopefully November will be an unlucky “one-off” and these prices won’t be seen again in a good while.

Until then, folks: use electricity responsibly, efficiently and frugally!

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