January 24, 2021

The price of electricity shoots up and marks an all-time daily high due to the cold wave


The average price of a megawatt hour (MWh) in the wholesale market for this Friday marks a historical maximum of 94.99 euros, according to provisional data that has just been published by OMIE. In the middle of the cold wave due to the storm Filomena, in the middle of the pandemic and in a context of low wind energy production and rising gas prices, those almost 95 euros are above the previous historical maximum of 93.11 euros that was reached on December 8, 2013.

Electricity companies manage to place the most expensive electricity rates in 6 out of 10 homes

Electricity companies manage to place the most expensive electricity rates in 6 out of 10 homes

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This peak in prices, with a tip of 101.85 euros for 9 at night, will be reflected in the January bill of users covered by the voluntary price for small consumers (PVPC), the semi-regulated rate that, according to just to confirm the National Commission of Markets and Competition (CNMC), is cheapest for domestic consumers, despite which it has been in decline for years in favor of the so-called “offers” of the free market.

The PVPC immediately reflects in the energy component of the consumer bill (which represents around 35% of the final bill) the variations in the hourly market price known as 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.

On Wednesday, Three Kings Day and a national holiday, the lack of wind and the cold wave that was already beginning to hit the Peninsula drove the pool to 70.6 euros, its maximum since October 2018. For this Thursday, it shot up to 88.93 euros, the highest price since the january 2017 escalation and one of the highest in the last fifteen years.

Now, it has broken the barrier that it had 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 then, to change the previous system of quarterly auctions with which energy prices were set (known as Cesur) and established the current PVPC.

This Thursday, the consumer organization Facua has warned that the kilowatt hour (kWh) for a domestic consumer has reached an average of 16.81 cents in the first week of the year, 27% above the 13.24 cents of the same period of 2020. Facua, who has asked the Government to act “at once with forcefulness on the sector”, demands “forceful measures to stop speculation.”

Despite these specific peaks, the Ministry for Ecological Transition, which last month agreed to extend the guarantee of prohibition of cuts in basic supplies while the state of alarm lasts after a public confrontation with United We Can, trusts that the facility massive use of renewable energies (which are already the cheapest source of energy) will significantly lower the price of the so-called pool.

Minister Teresa Ribera predicted in September that Spain will achieve price convergence with Germany and France in 2023 thanks to the depressive effect on clean energy prices. A few weeks later, the Secretary of State for Energy, Sara Aagesen, trusted that a milestone would be reached in 2022.

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