Electricity in Spain today is the cheapest in Europe

The average price per megawatt-hour on the daily wholesale electricity market in Spain is today set below ten euros, at 9.47 to be exact. This is today’s daily average in Spain: 9.4 euros per megawatt-hour. The most expensive hour (which will ring tonight at ten) fell short of forty (37.9 euros/MWh). The cheapest, as already said: zero euros. Zero euro, from noon to 17:59; and 0.43 (forty-three cents per megawatt-hour) at eleven in the morning and six in the evening. Well, not a single wholesale electricity market in any of the major European economies (Germany, France, Great Britain, Italy, the Netherlands) offers today, at any time of the day, a single price close to Iberian zero. Not even remotely. Moreover: in all of Western Europe there is not a single hour during which a megawatt-hour is trading below… 63 euros, which was the minimum in these European wholesale markets: 63.10 at 1 am in France, much more than twice times more than in Spain at that time (26.78 euros/MWh).

(Below these lines, on the right, is a table with prices in all these markets as of today at noon (12:00). Source: Red Eléctrica (esios.ree.es)).

This is all about the minimums. But the fact is that the maximums are almost three times (or more than three times) higher than the Spanish maximum, which, as they say, remained at 37.9. Thus, these (maximum values) confidently exceeded 85 euros in heavily nuclear France (89.85 euros/MWh); They also comfortably exceeded 95 euros in Belgium or Italy (in the latter, the most expensive mega rang at six o’clock in the evening and cost 97.97 euros); and they have jumped (highs) above a hundred euros in the United Kingdom and the Netherlands, where the ceiling is set at 113.60 mega euros at six o’clock in the evening, literally triple the maximum recorded in Spain (and Portugal): the aforementioned 37.9.

The contribution of renewable sources to the electricity mix is ​​largely responsible, as we pointed out at the outset, for the low price that a megawatt-hour of electricity currently represents in the wholesale market. There has already been (and is expected to continue) such wind and hydraulic influences (thanks to Hurricane Carlotta) that thermal power plants that burn coal to generate electricity are not going to run all day again (they only did so for the first three hours of last morning ). In addition, the system operator reported that Combined cycle thermal power plants (which burn natural gas to generate electricity) will be shut down for 23 of 24 hours today..

Electricity prices on the wholesale market are transferred directly (75%) to the bills of those customers whose electricity supply contracts are indexed to the wholesale market (for example, those who have entered into a so-called voluntary small customer price, PVPC). . The remaining 25% of the price is taken from the futures markets.

Currently, according to Red Eléctrica de España, there are approximately 29 million domestic consumers in Spain (94% of total electricity supply contracts), of which 8.5 million (Spanish government data) They are subject to PVPC.

PVPC, according to Red Electrica
The PVPC price is based on the results of the daily energy market, which is managed by the Iberian Electricity Market Operator (OMIE), and in which, on the one hand, generator offers appear for every hour of the day. on the other hand, purchase offers from marketers.

From January 2024, in accordance with the provisions of RD 446/2023, the adjustment period obtained according to the calculation formula in force in the above-mentioned Royal Decree is additionally included.

With this adjustment period, energy cost determination is no longer based solely on daily market prices and intraday sessions, but also takes into account forward market prices.

Thus, the main component of the PVPC is determined by the price resulting from the OMIE matching for each hour of the day (the so-called pool price) plus an adjustment period during which prices in the electricity markets will be taken into account. futures, and whose weight in the final price will gradually increase until 2026.

Added to this core component are adjustment services, as well as tolls, tolls and other adjustable costs, the impact of which will vary depending on the time period during which consumption occurs (peak, flat or off-peak).

Today, the kilowatt-hour that a user who has entered into a PVPC contract (that is, the price regulated by the government) will pay varies from 0.038 to 0.084 cents. The price per kilowatt-hour of electricity offered right now on the free market by marketers operating in Spain is approximately in the range of 0.15-0.35 cents, depending on many variables.