The Government has asked the National Commission of Markets and Competition (CNMC) to investigate whether there have been irregularities in the electricity market after the rise in electricity in recent days, in which the wholesale electricity market (known as pool ) has set record highs in a cold wave context, rising gas prices in international markets, higher demand and a lack of wind, forcing consumption to be covered with combined cycle plants (which burn natural gas).
The price of electricity shoots up and marks an all-time daily high due to the cold wave
“Cold wave and another rise in the price of electricity. We have asked the CNMC to investigate whether there have been irregularities in the market ”, the Minister of Consumption, Alberto Garzón, has indicated on his Twitter account, adding that the Executive is“ seeking definitive solutions for a regulated rate that especially protects the most vulnerable families ”.
For this Friday, the average price per megawatt hour (MWh) in the wholesale market marks a maximum of 94.99 euros, above the previous record of 93.11 euros that was reached on December 8, 2013. For Saturday, On a day when the lower demand from the industry means that prices are lower than those on weekdays, the price stands at 80.66 euros. It is the third most expensive Saturday in the OMIE historical series.
This price peak, with a peak of 114.89 euros for Friday at 8:00 p.m., will be reflected in the January bill for users covered by the voluntary price for small consumers (PVPC). This is the semi-regulated rate that, as just confirmed by the CNMC, it is the cheapest for domestic consumersDespite this, it has been in decline for years in favor of the so-called “offers” of the free market, in which these fluctuations are not immediately reflected in the invoice.
The PVPC does collect immediately (every hour) in the energy component of the consumer’s bill (which accounts for around 35% of the final bill) the variations in the hourly market price known as the pool. In 2020, this reference collapsed due to the pandemic and marked the lowest annual average price in recent years after the collapse of electricity demand. But 2021 has started with spectacular climbs.
The record price on Friday came after the lack of wind and the cold wave that was already beginning to hit the Peninsula on Wednesday, Three Kings Day and a national holiday, pushing the pool to 70.6 euros, its maximum since October 2018. By Thursday, it soared to 88.93 euros, the highest price since the January 2017 climb and one of the highest in the last fifteen years.
The pool has broken the barrier that it touched in December 2013, in a spiral that led the CNMC to impose a 25 million fine on Iberdrola for manipulating prices (the electricity company ended up being charged with a crime against consumers) and the Government of that time , to change the previous system of quarterly auctions with which energy prices were set (known as Cesur) and established the current PVPC.
This Friday, FACUA-Consumidores en Acción has demanded that the Government not look the other way “in the face of the authentic rate savagery” that is taking place in the electricity market in the midst of a cold wave and has asked it to undertake urgent regulatory measures to stop the speculation.
In a statement, the association recalls that legislature after legislature has been demanding that successive governments “modify the system for setting wholesale rates in the electricity market, consisting of an auction that encourages speculation.”
Likewise, it claims a reduction in the VAT that is applied to the families’ electricity bill, “which added to the special tax on electricity causes indirect taxes to make the bill more expensive by 27.2%”.