The price of electricity shoots up this Wednesday to a new historical maximum, with more than 106 euros / MWh

The average price of electricity in the wholesale market will hit a new historical maximum this Wednesday, surpassing the level of 106 euros per megawatt hour (MWh) after becoming more expensive by 4.6% compared to this Tuesday. Specifically, the electricity pool will register an average price of 106.57 euros / MWh for tomorrow, pulverizing the 103.76 euros / MWh that were the historical record in the market until tomorrow and that dated from January 11, 2002, according to OMIE data collected by Europa Press.

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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Throughout Wednesday the price of electricity will reach a maximum of 110.64 euros / MWh, while the minimum for the day will be 100.83 euros / MWh. In this way, the price tension in the wholesale electricity market has worsened so far in July, especially this week.

The electricity bill of an average user has risen 34.6% in the first half of July compared to the same month last year, according to data from Facua-Consumidores en Acción. According to estimates by the consumer association on the evolution of the semi-regulated tariff (PVPC), if the tariffs continue in this way, the monthly bill would stand at 84.35 euros, an amount of the bill even higher than that of June, when it was 81.27 euros.

Thus, with the rates for the first fifteen days of this month, the average user will pay 21.68 euros more than in July 2020, when the bill stood at 62.67 euros.

Industry sources consulted by Europa Press attribute these highs to a combination of factors, such as gas prices and CO2 emission rights, which are marking the upward trend in the pool in recent months, together with the lower contribution of renewables in the mix.

They are also joined by the high temperatures this week, which will exceed 40 degrees Celsius in several places in the country, which will lead to a rebound in demand – the negotiated energy forecast for this Wednesday is 538 gigawatt hours (GWh), compared to at 531 GWh this Tuesday-.

The price of energy has a close weight in the bill of around 24%, while around 50-55% corresponds to tolls -the cost of transmission and distribution networks- and charges -the costs associated with development from renewables, to extra-peninsular ones and the annuities of the tariff deficit- and the rest taxes.

The fluctuations in the daily price affect consumers covered by the regulated tariff (PVPC), just over 10 million, while those in the free market are exempt -about 17 million-, since they have an agreed price with your company.

VAT reduction and suspension of 7%

On June 24, the Government approved a Royal Decree-Law as a matter of urgency to reduce the taxes applied to the supply of electricity and, with it, the electricity bill of homes, the self-employed, SMEs and the whole of the companies, which entail the reduction of the VAT on electricity from 21% to 10% until the end of this year and the suspension of the 7% tax on electricity generation for three months.

In the specific case of VAT, a 10% reduction is applied until the end of the year for all consumers with contracted power up to 10 kilowatts (kW), provided that the average monthly price of the wholesale electricity market is above 45 euros per megawatt hour (MWh).

Regarding the suspension of 7% of the tax on the value of electrical energy production, which already in 2018 was decided to temporarily suspend for six months to contain another upward wave in the price of electricity, it will be in force during the third quarter of this year.

The association estimates that the reduction in VAT to 10% until December while the average price per megawatt hour is above 45 euros has cushioned the rise by 8.44 euros. If 21% were still applied, the receipt would have broken all records, reaching 92.79 euros.

If the rates continue like this, July will be the third most expensive receipt historically for the average user. To date, the five highest bills have been 88.66 euros for the first quarter of 2012, 87.81 euros for January 2017, 83.55 euros for September 2018, and 82.13 euros for May 2021 and the 81.55 euros of February 2021.


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