The price of electricity plummets today to its lowest level in almost three years and will be free or almost nine hours

2023-11-04 10:16:36

Electricity will be free or almost free for much of today. The strong winds and rains that the storm Domingos will bring this weekend, which has taken over from Ciarán, will continue to boost the production of renewable energy and thereby lower the cost of energy, which will mark its minimum price in almost three years.

Specifically, the average price of electricity for regulated tariff customers linked to the wholesale market will plummet today, Saturday, by 73.7% compared to this Friday, to 1.51 euros per megawatt hour (MWh), thus marking a new annual minimum and its lowest level since January 31, 2021, long before tensions began in the energy market due to the recovery after the pandemic and the war in Ukraine.

The cost of energy will be 0 or almost nine hours today, Saturday. Specifically, it will reach level 0 between 3:00 p.m. and 4:00 p.m. and between 11:00 p.m. and 12:00 p.m., while it will be almost zero in the section that covers between 11:00 a.m. and 6:00 p.m., according to data from the Iberian Market Operator of Energy (OMIE). The maximum, with 4.3 euros/MWh, will be recorded in the first hours of the day.

The rains and weather brought by the storms that have swept through Spain in recent days have caused the contribution of renewable technologies to the system’s production to skyrocket. On Thursday, the energy produced by renewables reached 73.3% of the total, thus surpassing the previous record of 70.5% that had been registered on October 20. Today is also a non-working day, which reduces energy demand.

So far in November, the average price of electricity has not exceeded four euros, figures that suggest that the accumulated average for this year (91 euros/MWh) will continue to fall, although predictably not at the current rate.

Bill

Although energy, as will be about to happen for a few hours on Thursday, may end up costless, this does not imply, in any case, that the electricity bill may also end up costing zero euros for users. because there will always be fixed or regulated costs to pay. These regulated costs represent between 55% and 60% of the total value of the bill and are identical for all users who have an electricity contract. These costs include the contracted power, which is the price we pay for the power we contracted and that can be used; the access toll, the rental of equipment, which basically affects the electric meter; renewable energy incentives and payments to Red Eléctrica de España and the OMIE. In addition, there are also other costs such as the tariff deficit, which has been paid to electricity companies for years to compensate for energy that they sold below its cost.

VAT is also added to these fixed costs, which is paid on the entire invoice; and the electricity tax.