The wholesale price of electricity will reach an average of 94.23 euros per MW / h this Saturday. It is 5.58% lower regarding friday, when the electric stock market marked the second highest price in history and exceeded the level reached in January, when the storm Filomena. Despite the decline, the price this Saturday is only 76 cents from that peak on the eve of the famous storm and is a record for a Saturday.
Teresa Ribera insists on rejecting a public energy company but says there are “interesting” experiences
Prices on weekends are usually lower than on weekdays due to lower demand from the industry. This July 3 is the sixth highest average price in OMIE’s records, which do not take into account the effect of inflation. The previous maximum for a Saturday was reached very recently, on June 19 (87.22 euros MWh). This gives an idea of the exceptional situation of the pool in recent weeks.
July 2021 threatens to pulverize the records of June, which was the month with the most expensive MWh in history, with 83.3 euros, which is almost double the average of the last ten years. As reported by the OCU on June 25, hydraulic, which has a low variable cost, has been the technology that has set the price in more than half the hours of last month.
The only time so far that the average price of the Spanish wholesale market had exceeded the barrier of 90 euros during a weekend was on December 8, 2013.
Then, the pool stood at 93.11 euros, in the middle of an escalation that ended up with a fine for Iberdrola of 25 million euros from the National Commission of Markets and Competition (CNMC) for manipulating the market. The electric was denounced in 2017 by the Anticorruption Prosecutor’s Office for a possible crime against consumers. The procedure has been open for years in the National Court.
The current lack of price control, which also affects other European markets, comes in a context in which the price of natural gas (which influences the price charged by all technologies because it is a marginal market) has shot up to 38 , 58 euros MWh of the daily product, according to data from the Iberian market Migbas, and with the ton of CO2 beating a new historical maximum of 58.49 euros last Thursday. Carbon has become 140% more expensive since January alone, due to the EU’s heightened climate ambition and speculation in that market.
Energy has a weight in the final bill of around 24%. The escalation has forced the Government to urgently approve a reduction in VAT on electricity to 10% and to temporarily suspend the tax on generators. But the hikes are eating up those tax cuts. The rally of recent weeks, in full economic recovery, has a direct reflection for households benefiting from the regulated rate of the voluntary price to small consumers (PVPC), which according to experts, the Government and consumer associations, is more cheaper than the offers of the so-called free market, although it is in decline and in January (latest data available), after Filomena, marked a new all-time low.
The unusual peak of this Saturday is going to be attenuated because the new invoice that went into effect on June 1 introduces a price discrimination system whereby weekends are considered off-peak, the cheapest.
“Months” with high prices
The high prices of the so-called pool are not going to remit in the short term. The Government fears that this scenario lasts “months”, the fourth vice president, Teresa Ribera, warned on Tuesday in Congress.
The Executive, in addition to this temporary reduction in VAT, has proposed as “structural” measures to lower the price of the receipt a fund to remove the cost of premiums from the invoice older renewables and a blueprint for drain the so-called out-of-the-blue hydro and nuclear profits you just received the endorsement of the CNMC. The electricity companies reject it and have threatened advance the nuclear blackout if approved.
A part of the Executive has raised accelerate that cut and approve it by decree, a way that Ribera rejects because he considers it more exposed to the possible resources of the companies. But the Executive does not rule out more measures. The vice president has sent a letter to the vice president of the European Commission and head of the European Green Deal, Frans Timmermans, to address a reform of the design of the European electricity market and “how to evolve” in it so that it is “simple” and send ” clear signals ”and the cost of CO2 does not generate“ distortions ”in electricity prices.
Ribera referred last Tuesday to the possibility of paying a different price to older power plants through the so-called “contracts for differences”, but “today it is difficult for them to fit into the European response.” “We need a job and coverage unless we want to leave the EU or we want sanctions from the European institutions to accommodate this change,” “building confidence,” he said. The Nuclear Forum has asked a fixed price for its production to remove it from the pool That amounts to about 57 euros per MWh to “cover expenses”.
In his appearance on Tuesday, Ribera He again expressed his rejection of the creation of a public energy company to manage the hydroelectric concessions that are going to expire, although he pointed out that there are “interesting” experiences. The vice president attributed the pool’s escalation to the “extraordinary increase in gas and CO2 in international markets”, which is “likely to continue for at least a few months” and which, she said, is “closely linked” to the environmental commitments of Europe and the United States. Climate change “explains part” of this rise and fossil fuels, he insisted, are the “great structural problem.”