……………….Electricity price tomorrow, March 28. The megawatt hour will be paid at X euros on average, almost 35 euros more than this Thursday.?????? The price difference between the sections lies mainly in the tolls and charges, which are higher at the peak, intermediate in the flat, and more affordable in the off-peak period. Tomorrow, March 28, the megawatt hour will be paid at peak times (charges and tolls included) at X euros and X euros at off-peak times. The cheapest section will be recorded between X hours.
The daily wholesale electricity market, despite being far from its historical maximum reached on March 8 with €542/MHw, is at very high levels and an imminent drop is not expected. Despite the fact that February was a respite, the one also known as ‘pol’ has marked an average of 336 euros per megawatt hour during the first fortnight of this month.
The Government intended to lower the price of electricity below 180 euros. They announced it on March 17 but four days later, they backpedaled. Now, the Executive says that it is working on other options that will allow greater unanimity within the European Union. The objective of that measure announced by Minister Ribera was to decouple the price of gas from the electricity market if Europe did not make a decision to reform the market.
Gas continues to set the tone for electricity prices. From January 1 to March 15, the consumption of this energy source has increased by 12.6% compared to the same period last year. And the engine of this growth, point out the experts of the ASE Group, which is the demand for the generation of electricity, and not the industrial one.
At least, in recent days the price of gas in the markets has dropped 50% from the highs that were marked on March 7, when the price of the TTF -the great world market- for April exceeded €200/Mwh. Despite everything, the price curve for 2022 is 60% above the days before the war, and always exceeding 100 euros. “Being indexed to gas, European markets have also experienced a sharp decline in recent days,” they add in the ASE Group, “but also futures products for 2022 have clearly risen since the Russian invasion of Ukraine.”
The energy market continues at excessively high levels that represent a severe setback for families. The more than 10.5 million households benefiting from the regulated electricity tariff that are receiving electricity bills for February these days are once again aware of the high prices at which they are paying for this basic supply. The average receipt of the PVPC (Voluntary Price of the Small Consumer), which until 2021 rarely exceeded 60 euros per month, has increased beyond 130 euros, on average, according to calculations by the National Commission of Markets and the Competition (CNMC). And the spiral will go further, depending on how the wholesale market behaves in this new energy crisis.
Europe has also been affected by the rise in electricity prices. All European countries set records above €300/Mwh). The peak is marked by Italy, with 367 euros, followed by the United Kingdom (350) and France (343). The exception is Germany (€295/Mwh). Despite being the European country with the greatest dependence on Russian gas, it is also the one with the largest self-consumption photovoltaic generation capacity. Even on March 11, it registered “zero” prices in the hours of maximum solar radiation.
The regulated rate, the main affected
High electricity prices directly affect users of the regulated rate, the so-called Voluntary Price for Small Consumers (PVPC). This mode of supply is configured with the prices of the wholesale electricity market (‘pool’) plus tolls and charges, which represent the regulated invoice of the receipt and are set by the National Commission of Markets and Competition (CNMC) and the Ministry Ecological Transition respectively.
The former are used to finance the transport and distribution of electricity. With the charges, other concepts are paid, such as incentives for renewable energies, part of the costs of bringing energy to the islands, or the amortization of the tariff deficit. However, consumers in the free market -in which a price is agreed with the marketer on duty for a certain period of time- are also affected by this inflationary spiral of electricity when it comes to renewing their contracts.
New price structure from June 1
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 established for domestic consumers two periods of contracted power (peak and off-peak) and three energy periods (peak, flat and off-peak). The price difference between the sections lies in the tolls and charges, which are higher at the peak, intermediate in the flat, and more affordable in the off-peak period.
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, the skyrocketing prices in the electricity market forced the Government to take a series of measures to lower the price of the bill, which were applied between September 1 and December 31: the reduction in the cost of charges -which affected both prices both energy and contracted power-, the reduction of the Electricity Tax from 5.11% to 0.5% and the VAT, which went from 21% to 10%. In addition, the suspension of the tax on electricity generation (7%) was extended until the end of the year.
These changes meant that, in practice, the price curve between the different time slots was flattened so that there was hardly any difference between consuming during one or the other. However, the beginning of the year brought the usual review of the regulated part of the electricity bill. The tolls decreased by 4.6% compared to those applied since June 1 with the change in the electricity rate.
As for the charges, the discount approved on September 1 disappeared, but the amount of the new ones is approximately 33% lower than those of April 2021. On the other hand, the Government decided to extend the reductions of the two taxes included in the invoice (VAT and Electricity) and the electricity generation bill (the IVPEE) until April 30 of this year.
The main hope to achieve a drop in the price of electricity is right now in the joint proposal that Spain and Portugal want to present to the rest of the community partners. It consists of limiting the price of electricity in the wholesale market to €180/Mwh.
The idea is to present the document to the rest of the community partners in the coming days, with the confidence that the upward spiral in prices, aggravated by the war in Ukraine in recent weeks, will open the door to receiving the definitive approval from Brussels. However, and at least until now, the position of the Commission, and especially of Germany, was against limiting prices. Especially in the wholesale market.
Tips to lower the receipt
Getting a cheaper bill involves changing a series of habits. The first of these, consume as much as possible within the valley sections (from 12:00 a.m. to 8:00 a.m. from Monday to Friday and all hours of the weekend). It is also interesting 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. The 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.