Electricity bills up 70% year-on-year, consumers association says
Record high electricity price after introduction of cap seen on Wednesday: €476.39
Electricity bills will be up to 70% higher in August compared to 12 months ago according to a report from the consumers association Facua.
The entity estimates that users will pay an average of €158.26 in the eighth month of the year, a significant increase on the €93.10 paid in August 2021.
This represents a €16 increase on July's average bill and will be the second-highest value ever, only surpassed by the €176.73 paid per bill on average in March.
According to Facua, the gas price cap has helped prevent a further increase in energy prices, but they say that this measure is "absolutely insufficient" in order to counter the "speculation" in the sector.
Indeed, the average wholesale cost of electricity in the PVPC regulated market will be €476.39/MWh on Wednesday, the highest since gas prices were capped two months ago following an agreement between Spain, Portugal, and the EU known as the Iberian exception.
This is almost a €20 increase on Tuesday, the previous post-gas cap record set at €459.4/MWh. It is the third day in a row that prices surpass €400/MWh.
Soaring electricity costs
Electricity prices have been on the rise since the summer of 2021, when the January 2012 record of €103.76/MWh was first broken.
Costs have skyrocketed since then as natural gas reserves, which are needed to power combined-cycle plants, are low – a situation that has been exacerbated by geopolitical unrest between the EU and Russia, especially following the invasion of Ukraine.
There is also an overreliance on more polluting electricity sources that incur hefty CO2 emissions rights: only 19.8% of Catalonia's electricity came from renewables in 2020.
Regulated PVPC market v. free market
These wholesale price increases affect the 10 million households with contracts in what in Spain is known as the regulated electricity market, or the PVPC.
People whose contracts are in the so-called free market, an estimated 17 million households, pay a fixed amount every month regardless of daily wholesale price fluctuations, but in the long run are also affected by the rising cost of energy.
Spain's 'bono social' electricity bill vouchers are only granted to those with PVPC contracts.