Friday. 02.12.2022
ENERGY CRISIS

Electricity price in Spain hits new all-time high on Thursday

The Spanish government promised to lower taxes on the electricity bill as of 1 January, when the current tax discounts expire

06 November 2021, Spain, Barcelona: People take part in a protest against rising energy prices. Photo: Matthias Oesterle/ZUMA Press Wire/dpa
People take part in a protest against the rise in energy prices in November in Barcelona. Photo: Matthias Oesterle/dpa.

The price of electricity in the wholesale market reached a new all-time high in Spain on Thursday. And this is already the second record set in two consecutive days.

The average price of electricity on Thursday will be 302.48 euros per megawatt hour (MWh) in the wholesale market. This is 462% more than a year ago, according to data from the Iberian Energy Market Operator (OMIE).

This is the second consecutive record of the week, after it cost 291.73 euros per megawatt-hour on Wednesday.

December is heading to be the most expensive month of the year and, therefore, in history.

More and more voices in Spain, among experts and politicians, say that the promise made by Prime Minister Pedro Sanchez that Spaniards will pay the same price for electricity at the end of the year as in 2018 will not be fulfilled.

Faced with this complicated situation, the Minister of Finance, Maria Jesus Montero, said on Wednesday in the lower house of Parliament (Congreso de los Diputados) that the Spanish Government has decided again to lower the taxes on the electricity bill as of 1 January, when the current tax discounts expire.

Tensions in Europe

The price of electricity in the wholesale market has a direct impact on the regulated tariff (the so-called PVPC), paid by almost 11 million consumers in Spain. It is also a reference for the other 17 million that have contracted the supply in the free market. Therefore, the rise in the price of electricity affects some 28 million energy supply contracts.

The higher price of natural gas in the international markets (120 euros per megawatt hour at the beginning of the week), due to geopolitical tensions between Russia and the European Union, is one of the main causes of this price hike. The rise in the price of CO2 emission rights is also pushing up.

Both factors are driving up the price of electricity across Europe. On Thursday, the average price of a megawatt hour in France was 353.09 euros; in Germany, 344.30 euros and in Italy, 347.35 euros.

Electricity price in Spain hits new all-time high on Thursday
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