The price of electricity will increase tomorrow, Tuesday, May 17, to almost 200 euros on average per megawatt hour, specifically it will cost 199.36 euros. The cheapest section is from 15 to 16 hours, where the price per megawatt hour will be paid at 265.88 euros, and the most expensive, from 21 to 22 hours, where the price per megawatt hour will be paid at 160.49 euros.
March was the most expensive month of the year so far and it was marked , when the historical maximum was marked. However, in April the price of the ‘pool’ has been reduced by 32.42% to register an average of 191 euros. Even so, it is almost 200% higher than that of April 2021.
The reason for this decrease is in renewable generation, especially wind and photovoltaic, which on some days has contributed to lower prices during central hours. For example, as indicated in the ASE Group, on April 5 it registered an average price of €85/MWh. However, those marked between 12:00 and 19:00 were the lowest, even lower than the off-peak hours of the night, when consumption is always lower.
The increase in generation through photovoltaic panels -52% higher than in the same month of 2021- means that on days with moderate wind energy production -not even very high- the wind expels the combined gas cycles from the matching system and therefore it sinks prices.
Photovoltaics have been the main source of the energy ‘mix’ in April during the hours of maximum solar radiation. With almost 28%, it has been placed ahead of wind power (23%) and nuclear power (18.5%). At that time, gas production barely represented 6%, according to data from the ASE Group.
The greater participation of renewables in setting prices is one of the hopes that the electricity bill will drop to acceptable levels. The other goes through the limitation of the price of natural gas in the wholesale electricity market (the ‘pool’). The combined cycles, which produce electricity from this natural gas hydrocarbon, mark the price of the ‘pool’ at certain times. And although there are not many, it exerts a dragging effect on the offers of other generation technologies. Hence the importance of putting a cap on the price of natural gas.
Finally, Spain and Portugal have obtained permission from Brussels to apply this containment mechanism, although not in the terms initially proposed. Both countries wanted to cap the price of gas at 30 euros/MWh for a year, but Europe only allows that limit to be set at an average of 50 euros for that entire period.
According to the keys exposed by the experts, capping the price of gas at 50 euros will mean that the electricity market will not exceed 140 €/MWh. In turn, the average consumer receipt could drop by around 40%. This affects, in the first place, the users of the regulated tariff (PVPC). But it is not clear what will happen to those on the free market, to whom the marketers will probably end up passing on that extra cost that the measure implies.
In any case, the lower price of the receipt for PVPC consumers will surely not begin to be noticed until June, since the Government has not been able to transfer this measure in the Council of Ministers on May 3, as it was its intention. initial.
What the central government has been able to do to lower the price of the electricity bill is to modify the charges of the electrical system. It is one of the components of the regulated part of the bill – the other is made up of tolls – and is used to pay concepts such as incentives for renewable energies, part of the costs of bringing energy to the islands, or the amortization of the deficit rate.
The amount of these charges has been reduced – from March 31 to December 31 – compared to those approved at the end of last year. A measure that will somewhat lower both the price of the contracted power and that of the energy consumed. In addition, it has also been decided to extend the reduction of the Electricity Tax to 0.5% -the minimum allowed by Europe- and VAT -it continues at 10%- until next June 30.
The evolution of the daily wholesale electricity market directly affects the users of the regulated rate, the so-called Voluntary Price for Small Consumers (PVPC). However, the consumers of the free market -in which a price is agreed with the marketer on duty for a certain period of time- are also affected by the high prices of the electricity market when renewing their contracts.
The increase in the price of the electricity market began in early 2021, months before the new rate structure came into force. This price scheme establishes for domestic consumers two periods of contracted power (peak and off-peak) and three energy periods (peak, flat and off-peak). The difference in prices between the sections lies in the tolls and charges, which are higher at the peak (from 10:00 a.m. to 2:00 p.m. and from 6:00 p.m. to 10:00 p.m.), intermediate in the flat (from 08:00 to 10:00 a.m. and from 2:00 p.m. to 6:00 p.m.), and more affordable in the off-peak period (from 00:00 a.m. to 8 a.m., as well as all weekends and national holidays) .
With these changes, it was intended to shift consumption to times when energy demand is lower, to avoid an overload of the networks that would have led to a greater investment in these infrastructures, with the consequent increase in the cost of the bill.
However, a greater contribution from renewables can – and this has been seen on certain days – disrupt this scheme, so that some flat and peak hours – the power plants of the day, especially – are sometimes cheaper than those of the schedule Valley. To find out what price PVPC users will pay for the kilowatt hour consumed the following day, you can consult the Red Eléctrica website.
Getting a cheaper bill involves changing a series of habits. The first of them, consume as much as possible within the valley sections. Another interesting piece of advice is to adjust the contracted power as much as possible, because many times you have more than what is actually used.
Before the generalization of digital meters, it was almost impossible for a domestic user to know how much electrical power he used. But with new measurement devices, everyone can access that data.
Distributors -the owners of the ‘cable’ through which electricity reaches the point of consumption- already offer this information on their web pages and mobile applications. In Euskadi it can be done through the i-DE website, the name with which Iberdrola has baptized its distributor.
Another way to lower your electric bill is to use appliances efficiently. For example, choosing programs that work at low temperatures in the washing machine or dishwasher, turning off the electric plates or the oven before the end of the cooking time to take advantage of the residual heat, or eliminating the ‘stand by’ to turn off completely the devices.
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