The energy price in the daily market -the factor that weighs the most when determining whether the electricity bill goes up or down- has increased by 24.5% since the President of the Government, Pedro Sánchez, came to power in June 2018.
According to data from Iberian Energy Market Operator (OMIE), the average cost of energy in the daily wholesale market – where distributors go to buy electricity – was 58.46 euros per megawatt hour the month in which Sánchez took office, while in the last 30 days has amounted to € 72.78 per megawatt hour, an increase of 24.5%.
After Sánchez’s first inauguration, the cost of electricity peaked in September 2018 and then drew a smooth but prolonged downward curve until early 2020. Afterwards, the lockdown drastically reduced demand and dragged down electricity prices with it. electricity, which hit the ground in April last year. That month, the megawatt hour stood at 17.7 euros, the minimum reached with Sánchez at the controls. Since then, although with oscillations, the light has not stopped becoming more expensive.
The peak of the price escalation occurred during the storm of cold and snow caused by the storm Filomena in January of this year. Then, the prices of the daily market reached highs not seen at least since 2014. Three of the five days with the most expensive electricity in the last seven years coincided with the storm. On January 7, 8 and 13, more than 88 euros per megawatt hour were paid.
After a brief respite in February, the cost of energy skyrocketed again and dragged the daily price curve at very high levels: In just four months it has gone from 28.2 euros per megawatt hour to more than 72, an increase of 258% in that period.
The Government trusts the solution to the CNMC
This Wednesday, the fourth vice president of the Government and minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, affirmed in the Congress of Deputies that between 2018 and the beginning of 2020 the light fell by 30%. This data agrees with the reduction in the price of energy in the daily wholesale market, but what Ribera did not say is that, from January 2020 until these last 30 days, the cost has skyrocketed 78%.
The latest price escalation coincides with the arrival of the new electricity bill (effective from June 1). The new system implies that some fixed costs of the bill – the so-called “charges” and “tolls”, which are paid for transport, distribution or maintenance of the electricity network – are linked to user consumption. Now, in function of the time the light is turned on or the washing machine is put on more or less toll is paid, in such a way that connecting at rush hour can be more than double the surcharge than connecting at off-peak hours.
In view of this increase, at the beginning of this week the Vice Presidency of Ribera sent a letter to the National Commission of Markets and Competition to ask you to analyze possible market manipulations and “any possible irregular behavior or market malpractice” that was “coincident” with the entry into force of the new tariff, to which the president of the organization, Cani Fernández, replied that the electricity and gas markets are “monitored daily. “and that” disciplinary proceedings “will be initiated if” practices contrary to the Law “are detected.
In a climate of growing social unrest due to the new bill – which Ribera went so far as to affirm that “it will benefit all” consumers – the first vice president of the Government, Carmen Calvo, speculated this Thursday again with the possibility that the escalation of the prices are due to some type of irregularity on the part of the electricity companies: “We are asking the CNMC to do its job, to tell us if there is any abnormal behavior in the operation of the market“said Calvo on TVE.
On the other hand, and to try to mitigate the impact on the pocket of the new tolls, Podemos defended on Wednesday raising a request to the CNMC to advance the off-peak time from 0 to 10 p.m. the regulator has ruled out, at least for now.
“The important thing is the cost of supply”
In any case, the decisive factor in the fluctuation of the bill continues to be the high prices of the electricity market, which have increased by almost 25% since Sánchez was in power. “The important thing is the cost of the supply, the tariff is an instrumental means: it is always a minor thing,” explain sources in the sector. “The cost to consumers is in [el precio de] energy and electricity. The cost of infrastructure has remained constantthey add.
“The key to the matter is in the recognized cost to companies, both for the remuneration of the infrastructures, as well as the prices that this very special market that we have here sets, “they continue.
Likewise, the experts consulted reject that advancing the off-peak hours makes the invoice cheaper. “It’s not about that. It can be done, but if the off-peak time starts at ten instead of twelve they will have to raise the [hora] tip, because if not there will be a tariff deficit and that cannot be, “they conclude.