Price of electricity hits an all-time high in Spain, sparked by cost of gas

The Lada power station in the Asturias.
The Lada power station in the Asturias. / E. ALONSO / EFE
  • The electricity bill of an average user was already 36.2 per cent more expensive in July, compared to the same month last year

The average price of electricity in the wholesale market in Spain will hit a new high this Monday (9 August), with an average cost of 106.74 euros per megawatt hour (MWh) and thus surpassing the previous record of 106.57 euros that was reached on 21 of July. In comparison with the same period of 2020, the increase amounts to 180 per cent.

This is reflected in the latest data from the Iberian energy market operator, OMIE, according to Europa Press.

Except between 3pm and 5pm the price will remain constantly above 100 euros/MWh. The maximum price will be between 9pm and 10pm when the price of electricity will shoot up to 114.07 euros. On the other hand, the daily minimum will be registered between 4pm and 5pm, at 97.95 euros per MWh.

The price of electricity was already high throughout July, which led to to the month closing with an average of 93.46 euros/MWh, the highest level in history.

This increase in the price of the wholesale electricity market has been fundamentally sparked by the high prices of emission rights and the increase in the cost of natural gas. The price of energy accounts for around 24 per cent of the, while around 50 - 55 per cent corresponds to the costs of the transmission and distribution networks, as well as the charges for associated costs to promote renewables. And, to all this, must be added the burden of various taxes.

The fluctuations in the daily price of electricity directly affect consumers covered by the regulated tariff (PVPC), just over 10 million people. On the other hand, those in the free market - some 17 million clients - are exempt, since they have an agreed price with their company based on time slots and other concepts.

36 per cent rise in July

The electricity bill of an average user was already 36.2 per cent more expensive in July compared to the same month last year, standing at 85.34 euros, according to a report presented a few days ago by Facua-Consumidores en Acción. However, the reduction in IVA tax to 10 per cent until next December - could cushion the rise by 8.54 euros. Without it, the consumers organisation calculates that the average cost of the monthly bill would have increased to 93.88 euros.