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Date Published: 28/04/2022

ARCHIVED - Electricity bills in Spain will remain 15 euros higher than last year

ARCHIVED ARTICLE

The agreement between Spain and Brussels to cap gas prices will still have a major impact on energy costs

<span style='color:#780948'>ARCHIVED</span> - Electricity bills in Spain will remain 15 euros higher than last year

The price of electricity has become a worry for most households in Spain in recent months, but the pressure is set to be alleviated as the government this week came to an agreement with the European Commission to apply a cap of 50 euros per MWh (40 euros initially) for the next 12 months.

This should substantially reduce the amount paid on electricity bills, but while the Organisation of Consumers and Users (OCU) believes this is “a positive first step,” the group ultimately thinks the measures are insufficient since many customers will still be paying 15 euros more each month than they were last year.

The Spanish government was originally pushing for a cap of 30 euros on gas to lessen the burden on households, whose energy bills have been creeping up all year, a problem which has been accelerated by the war in Ukraine.

A compromise was reached with Brussels, but when the new limit comes into force it will not benefit all customers equally: consumers on the PVPC regulated rates will see faster savings, since their electricity rates depend on the fluctuating daily market, while those on fixed rates will have to wait until they renew their contract.

According to OCU calculations, electricity bills overall are expected to be limited at 85 euros for the average household, “15 euros less than the price that it will probably reach in April of this year, but 15 euros more than just a year ago.”

Moreover, the difference between the market price of gas and the discounted rate charged by combined cycle plants will have to be made up, and it appears that this deficit will somehow be tacked on to electricity bills.

The current cost in the wholesale market suggests that this month, electricity will cost an average of 100 euros per MWh, while in March prices skyrocketed to 143 euros.

You might also like: Inflation drops to 8 per cent in Spain but grocery prices continue to rise

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