Electricity price in Spain reaches unprecedented high in August

by Lorraine Williamson
electricity price in Spain highest ever

MADRID – Never before has the price of electricity in Spain been so high as this month. Compared to August of last year, the electricity bill is now no less than 35% higher. The Spanish Consumers’ Union (OCU) has asked the government for urgent measures. 

The OCU foresees that this historically high electricity price will not fall before the end of August.  The energy bill for the year 2021 will be as much as 25% higher than for the whole of 2020. That is, without government intervention!

Temporary VAT reduction not enough 

The OCU calculated in the first two weeks of August the electricity price was on average €102.11 per MWh. The average energy bill for consumers thus comes to about €76.60. This is 4.4% higher than the record price from July and 35% higher than the energy bill from August 2020. Furthermore, if the government had not temporarily lowered the VAT rate from 21% to 10%, the energy bill this month, the average would have been  €84.30.  For small users (consumers) this was 25% higher from January to now compared to the same period last year. 

However, in order to avoid an unsustainable situation for especially vulnerable families, the OCU has asked the Spanish government and the National Commission for Markets and Competition (CNMC) to take measures with great urgency for consumers. According to the OCU, it is not fair the bill for the high electricity price should lie with the consumer. 

On Tuesday, the electricity price on the wholesale market will rise another 0.58%, bringing the average price to €89.50 per megawatt-hour (MWh). That is €0.58 higher than last Monday´s price, and almost a tripling of €29.97 per MWh exactly a year ago. 

More than €108 more than last year 

According to the Consumers’ Association, on 73% of the days in August, the price on the wholesale market was more than €100/MWh. Before last Friday, it was €117.29 for five days in a row. The OCU calls this exorbitant price increase unprecedented in Spain and denounces the fact that consumers are being affected. This year they paid more than €108 more in electricity compared to the same period last year. 

Intervene in the price system 

The historically high price for electricity in Spain is a direct result of the high gas price and the expensive CO2 emission rights that electricity companies have to pay for generating energy. Nuclear power stations and hydroelectric power stations, however, also benefit from the high prices of fossil energy suppliers. Because they automatically move along and then stay just below it. Therefore, the OCU wants the Spanish government to put an end to this automatically linked pricing system with immediate effect. 

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