The change proposed by the minister would involve incorporating a fixed tranche “a little higher” to avoid high volatility. This Friday the light will reach 117.29 euros / MWh
The price of light does not touch the ceiling. This Friday it will once again mark a new historical maximum for the fifth consecutive day, with an average price of 117.29 euros per megawatt hour (MWh), thus surpassing the record reached this Thursday of 115.83 euros, according to data from the OMIE (Operator of the Iberian Energy Market, which manages the markets of Spain and Portugal). An escalation in prices that has touched historic peaks in the price of the wholesale market since the beginning of the week, also coinciding with the heat wave that is hitting the country with temperatures that are also high in many parts of Spain.
Last year the price of electricity these days was about 40 euros, so the increase it has experienced is almost 200%. This same Thursday the price has tripled the one registered just a year ago, according to OMIE data. By time slots, the price of the ‘pool’ will be at all times above 100 euros, and will range between 128.54 euros / MWh, which will cost between 9:00 p.m. and 10:00 p.m., and 101.52 euros to be paid between 4:00 and 5:00 in the morning.
One of the main causes of the continuous rise in prices is climate change, as it responds to carbon dioxide (CO2) emission rights that seek the transition to a greener model. But it is not the only thing that affects this level never seen before in the prices of light. For this reason, the third vice president and minister for the Ecological Transition, Teresa Ribera, has opened the door to reform the regulated electricity tariff (PVPC) to reduce its dependence on the electricity wholesale market (‘pool’), which is now at maximum .
Of course, the minister acknowledged in an interview in La Ser that if the regulated tariff is modified, a fixed tranche “a little higher” can be incorporated. “We have to find how to introduce changes in the regulated tariff, but we know that the ones we have are cheaper than those in the free market, in which a premium is paid precisely to avoid volatility,” he explained.
Thus, he explained that since 2013 the regulated tariff has allowed 10 million users benefiting from it (compared to some 17 million in the free market) to benefit from a discount. But he acknowledged that given that the wholesale market is expected to continue to rise, “probably” we will have to find a formula to solve it, such as incorporating a fixed tranche “a little higher.”
In addition, the vice president opened the door to create a public company to manage the hydroelectric concessions that are being released, in order to reduce the electricity rate. Thus, it indicated that there would be the possibility of “having all the hydroelectric energy through a different concession system or through a public company as the hydroelectric concessions are released, which allows to intervene or facilitate another way of offering energy”.
Even so, he affirmed that the rise in the price of electricity in the wholesale market “does not have a great impact on domestic consumers” and recalled that the Government has already taken measures to reduce the bill, such as the reduction in VAT.
Brussels does not enter the debate
And although the Executive continues to look to Brussels as part of the solution to this price escalation, the European Commission has answered that the current system is “efficient” because it is a design that guarantees a “safe and affordable” electrical supply of energy from the most economical way.
In this sense, Community spokesperson Vivian Loonela pointed out that the very high prices of electricity in Spain are due to a “combination of factors” determined mainly by the “significant” global demand for gas and the higher cost of the emission rights of CO2. Added to this is a “high demand” for electricity due to economic recovery and weather conditions. In addition, from the Commission they rule out entering the debate that has arisen and assure that countries can apply “safeguards” to protect the most vulnerable consumers.