The price of electricity reaches highs never before seen in Spain. June 2021 has been the most expensive ever recorded, with an increase of 172% if we compare it with the same price in June 2020. The monthly average throughout the month was 83.29 euros the MWh.
In this way, the previous record of monthly average of 73.03 euros which was registered in September 2008. The average price of electricity in Spain during June 2021 is 13.3% higher than France and 12.5% higher than Germany.
The wholesale market price has a direct impact on the electricity bill, especially those that take advantage of electricity contracts based on the regulated rate of the voluntary price to small consumers or PVPC. In the vast majority of cases, it is usually cheaper than the free market offers.
Friday July 2, 2021 will be the second highest electricity price ever recorded
In parallel, this Friday, July 2, will be the second highest price of electricity in the history of Spain. It will reach the 99.8 euros per MWh, according to the data of the designated electricity market operator (OMIE). It surpasses the record reached during the storm of Filomena, on January 8, of 94.99 euros. Only surpassed by the 103.76 euros that was reached on January 11, 2002.
The government of Spain has tried to stop the large increase in the price of electricity that the country has experienced throughout 2021. One of the measures approved urgently in the Council of Ministers was the VAT reduction for families with contracts of less than 10 kW of power.
The price of gas, the main responsible for the rise in electricity
One of the main reasons for the historical increase in the cost of electricity in Spain is the increase in the price of natural gas in the main markets. It has shot up to 33.79 euros per MWh, as indicated by the Iberian Gas Market (MIBGAS). Added to this is the rise in the price of CO2 rights, which reached a new historical record of 58 euros per ton.
The fourth vice president of Spain, Teresa Ribera, warned last Tuesday, in his speech in the Congress of Deputies, that a prolonged upward price trend is expected over the next few months.
At the moment Ribera has sent a letter to Frans Timmermans, Vice-President of the European Commission and responsible for the European Green Deal, seeks to address a reform of the European electricity market that sends “clear signals” and also ensures that the cost of CO2 emission rights does not generate “distortions” in electricity prices.
Ribera referred to the possibility of paying a different price to older power plants through contracts for differences. The problem is that it is a proposal incompatible with the European Union.