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Date Published: 16/06/2022

ARCHIVED - Electricity prices in Spain continue to climb despite gas cap

ARCHIVED ARTICLE

Energy prices have increased by almost 16% in the last 24 hours in Spain

<span style='color:#780948'>ARCHIVED</span> - Electricity prices in Spain continue to climb despite gas cap

It’s only the second day on which the price of natural gas has been capped but already electricity costs have rebounded, reaching a whopping 259.01 euros per MWh on Thursday June 16. The high price is caused by several factors, not least of which is the government’s obligation to pay compensation to the electricity companies for the difference between the new limit of 40 euros put on gas and the real market price.

The current heatwave, which has pushed temperatures over 40ºC in many parts of Spain, isn’t helping matters either; when the weather is this hot, people naturally use air-conditioning and fans more often, which hikes up the prices, and there is virtually no wind at the moment so this green energy isn’t available either.

As a result, electricity is 15.62% more expensive on Thursday that the previous day, and costs will peak between 5am and 6am.

Unfortunately, it’s all a bit of a vicious cycle: the more it is necessary to resort to natural gas to satisfy energy demand, the greater the compensation that will have to be paid to electricity companies, which is reflected on customer bills. However, the heatwave we are currently experiencing isn’t expected to last beyond the weekend and as electricity use returns to normal levels, the gas cap should result in lower costs.

Image: Archive

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