The average price of electricity on the wholesale market hit a new high on Friday and for the fifth consecutive day. It reached 117.29 euros per megawatt hour (MWh), the Thursday record having been 115.83 euros.
The record prices over this week have coincided with a heat wave that is resulting in record temperatures in parts of Spain. Climate change is one of the main causes of the rise in energy prices, as these reflect carbon dioxide emission rights and the transition towards a model of renewable energy. The prices also take account of the cost of natural gas.
At this time in 2020, the average price was 40 euros, so the current prices are almost three times higher. During August so far, there have been eight all-time high prices. On Friday, a maximum price of 128.54 euros was set for 9pm to 10pm, the minimum having been 101.52 euros between 4am and 5am.
The increases in price in August follow a July when there was an average of 92.42 euros, the highest ever for the month and 167% higher than in 2020.
The carbon dioxide emission rights have risen in price from 33 euros per tonne in January to 54 euros. The price of natural gas has meanwhile gone up to 41.7 euros per MWh. Where the consumer is concerned, the price of energy accounts for a quarter of bills. Over ten million consumers are covered by the regulated tariff, and so fluctuations in the daily price directly affect them. Consumers with free market arrangements, some 17 million, are not affected as they have agreed fixed prices with supplier companies.
The Facua consumers association calculates that the average bill rose by 36% to 85.34 euros in July. A reduction in IVA (VAT) from 21% to 10% has some benefit, but only some. This reduction applies until the end of the year to consumers with contracted power of up to ten kilowatts, provided that the average monthly price on the wholesale market is above 45 euros per MWh.