PROPERTY SEARCH
PROPERTY SEARCH
ARCHIVED - Electricity prices in Spain plummet by 23 per cent
The price drop is far less than Spain expected, partly due to the recent heatwave
After months of seemingly unstoppable increases, the price of electricity has taken a nosedive on Wednesday June 15, dropping almost 23% in the wholesale market to just 165.59 euros per megawatt hour (MWh). This very welcome decrease has occurred as a result of the so-called Iberian Exception: an EU agreement that allows Portugal and Spain to cap the price of natural gas used for generating electricity.
But while this all looks great on paper, the reality is that several factors are still pushing up the price of electricity, so that many customers are unlikely to see the huge savings on their bills that the government promised.
The current heatwave being experienced in Spain means that renewable energies like wind power aren’t contributing to electricity production, and the Spanish government also has to fork out cash to power companies to make up the difference between the real price of gas on the open market and Spain’s new benchmark.
So in reality, electricity actually costs 224 euros per megawatt this Wednesday, which is ten euros more than before the EU subsidy was introduced.
Natural gas is the most expensive energy source and the benchmark by which electricity is priced. The extreme heat of recent days means that everyone in Spain is consuming more electricity, be it from blasting the air-con, using fans and even cooling drinks in refrigerators.
“The heat wave has increased demand by almost 80 GWh, there is little wind production (it has fallen to 78 GWh) and gas plants will reach their maximum production in the last year tomorrow, 373 GWh,” the Ministry of Ecological Transition explained.
It’s a classic supply and demand conundrum: the more we use, the more we pay.
Nevertheless, the Spanish government has advised consumers that prices are sure to drop once this exceptional heatwave abates, and electricity and gas bills will certainly be lower, particularly in the winter months.
Image: Archive
Sign up for the Spanish News Today Editors Roundup Weekly Bulletin and get an email with all the week’s news straight to your inbox
Special offer: Subscribe now for 25% off (36.95 euros for 48 Bulletins)
OR
you can sign up to our FREE weekly roundup!
Read some of our recent bulletins:
25% Discount Special Offer subscription:
36.95€ for 48 Editor’s Weekly News Roundup bulletins!
Please CLICK THE BUTTON to subscribe.
(List price 3 months 12 Bulletins)
Read more stories from around Spain:
Contact Spanish News Today: Editorial 966 260 896 /
Office 968 018 268
