The price of electricity is almost triple that of a year ago and will continue to go through the roof throughout 2021

The price of electricity in the wholesale market registers an average of more than 93 euros per megawatt hour (MWh) so far in July, which will close as well as the month with the highest price in history, with an increase of 12% compared to last June and almost tripling the price of July last year, as reported yesterday by the Organization of Consumers and Users (OCU).

Specifically, the price of electricity this month, which reached a daily historical maximum on July 21 (with 106.57 euros / MWh), will exceed 83.3 euros / MWh in June and will triple the 34.64 euros / MWh from a year ago.

With these electricity price levels, the OCU estimates that the average bill for a home with a regulated tariff (PVPC) –with 4.6 kilowatts (kW) of power and a monthly consumption of 292 kWh– will rise to 72, 5 euros per month, what represents an increase of 5.4% compared to June (68.80 euros) and 17% compared to the amount paid in July 2020 (55.70 euros).

Without the reduction of VAT from 21% to 10%, approved at the end of last month by the Government temporarily Until the end of the year to contain the upward impact of the price of electricity on the receipt, the bill would have risen to 79.80 euros, indicates the association.

The third vice president of the Government, Teresa Ribera.

And it does not seem that the price of electricity will go down, at least for the remainder of the year. If on Tuesday it was the electricity company Endesa that calculated that consumers with a PVPC rate will pay this year 25% more than last for her electricity bill, this Wednesday she was the Minister for the Ecological Transition, Teresa Ribera, who admitted that the Government does not foresee any reduction in the short term.

“We are prudent and, according to our estimate, it is likely that in the remainder of the year a high range of prices will be handled,” admitted the also third vice president of the Executive, who estimates that they will also remain high. prices of raw materials that affect the price of electricity, “mainly gas and a ton of CO2.”

“It is probable that in the remainder of the year a high price range will be handled”

Ribera, who participated together with the Minister of Economic Affairs, Nadia Calviño, in the presentation of the green bond framework, thus responded to questions from journalists about Endesa’s forecast, which estimates that the price escalation will not relax until 2023.

Ribera pointed out that, for now, the most important thing is to “remain cautious,” since we are “in full swing.process of systemic and structural transformation of the electricity market, but also of the energy system. “In this sense, he assured that the Government will follow” very attentive “the evolution of prices.

The Congress of Deputies has approved this Wednesday in an extraordinary plenary session the reduction of VAT on electricity temporarily from 21% to 10% until the end of this year and the suspension of the 7% tax on electricity generation for three months, a measure that took effect last Saturday, June 25.

The minister also pointed out that, although there are “variables that are associated with the evolution of international markets,” the Government is responsible for “offer guarantees” to those consumers that may be more affected by the evolution of the price of electricity and energy, so that it does not involve “a decline in family economies or industrial recovery.”

Finally, he said that the Ministry is working on instruments that allow transferring “as soon as possible” the much lower cost of renewable energy to generate electricity.

Also in the free market

From the OCU they warn that, despite the fact that these rates directly affect households with a regulated PVPC rate, “in the free market there are many consumers who, without knowing it, are suffering much higher rates throughout the year”.

Therefore, they ask the Government and the CNMC to “accelerate the taking of measures that effectively lower the price of electricity “and rule out that” eliminating the PVPC rate is the solution to this problem. “

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