MADRID – The average electricity price on the wholesale market will rise again on Monday – by 14.81% compared to Sunday – and will approach €250 per MWh again. With this, the electricity price will reach the highest level so far this year.
Preliminary data from the Iberian market authority OMIE shows the average electricity price on January 17 according to the pool is €244.67/MWh, almost €32 more than Sunday’s €213.1/MWh. It is the highest level of the month of January and thus of 2022 so far. The price has not been this high since December 24, 2021, when Spaniards paid €311.02/MWh. Compared to last January 17, the pool price will be 279.27% higher. Then, it was only €64.51/MWh.
Most expensive and cheapest hours
The maximum price for electricity will be between 7.00 pm and 8.00 pm with €285.68/MWh. Meanwhile, the cheapest hour will be between 4.00 pm and 5.00 pm with a price of €209.55/MWh.
These tariffs have a direct impact on the regulated tariff (PVPC) that applies to almost 11 million Spanish consumers and serve as a reference for the remaining 17 million who have contracted in the free energy market.
Why is the price so high?
The price increase in recent months on the electricity market is mainly explained by the highest gas prices on the markets and the carbon dioxide (CO2) emission rights, which have reached an all-time high level this year.
2021 most expensive year ever
2021 was historically the most expensive year for electricity, with an average price of €111.93/MWh. This was mainly due to the upward price spiral in the second half of the year. In December last year, the average monthly price on the wholesale electricity market was €239.10, the highest monthly price in history after the price of €200/MWh was exceeded by more than €39 last October.
What has the government done?
The government has extended until April 30 the reduction of taxes on the electricity bill for all consumers in order to alleviate the negative impact of the increase in electricity prices on Spaniards. These are the reductions in VAT from 21% to 10% and the special electricity tax from 5.11% to 0.5%, the legal minimum. The suspension of the 7% generation tax paid by companies will be maintained until March 31.