The swings and roundabouts of the wholesale electricity market have seen the price of electricity for January rise by 28%.
In Spain 35% of the electricity bills is subject to market influences (being bought and sold on the wholeslae market) and, due to the Filomena effect and the cold weather, the increase in demand has led to the price settling at around 90 euros per megawatt hour (MW), 6.7 euros more than the same time last year.
The remaining 40% of the electricity bill consists of taxes, IVA (VAT at 21%) and the electricity tax. The price of these is not affected by market influences but is controlled by the Government.
According to the Government this is a “temporary increase” which is likely to have a “minor impact” on prices.
But the National Market and Competition Commission (CNMC) predicts a 28% rise in electricity prices compared to the same period last year.
The CNMC calculates that for the first 12 days of January a consumer with an annual bill for 3,900 kilowatt hours, on a regular tariff, will receive a bill of 30.92 euros, 6.7 euros more than last year.
The average price for the rest of the month has reached 18.39 cents (direct taxes included) which represents a rise over last year of 37%, given that for the same period last year the cost would have been 13.42 cents.
The Government is under pressure from Consumer Associations to reduce or abolish the 21% VAT on bills but so far they have resisted this move stating they have plans to reduce standing charges in order to reduce bills.
Nexonr will keep readers informed.
