The pockets of the Spaniards have been suffering for months due to the rise in the price of electricity. Spain has paid 44% more expensive than Europe in the first semester, an even greater difference when it comes to poor families (55% more with less installed power). The volatility and the roller coaster that the PVPC tariff has suffered (those that are subject to market regulation) has made households pay much more for the same amount of electricity than before.
Suffice it to say that the cost of in the wholesale market has risen 635% in one year. Reason why the Government designed the cap on gas that we have analyzed in Xataka. Now, the Government will launch a new electricity bill that will affect 10 million households from January 1, 2023.
The new bill. The plan is to change the references on which the PVPC system is based. Instead of specific days, use three non-daily references. In other words, the bill will no longer be based on the price at which electricity is sold in the wholesale market each day, although it will continue to affect it to a lesser extent and will be reduced little by little. Let us remember that a year ago the previous quotas were replaced by a single one divided into the peak, flat and valley time periods. Instead, it will be established according to a basket of prices in the medium and long term: monthly, quarterly and an annual average. The objective: to avoid strong oscillations.
How? The idea is that the distribution is made in such a way that the monthly product represents 10% of the total, the quarterly product is 36%, and the annual product represents 54%. In this way, if another record peak in the price of electricity were to be registered, as has been happening in the past few months, it will not have as much impact on the consumer. In other words, it seeks to reduce volatility and uncertainty.
In this way, as we calculated in this other article, the oscillation between the most expensive and the cheapest hour, currently situated at 27%, would be reduced to 17%. This would reduce the price, on average, up to 2.5 euros/MWh. In practice, if a home consumes 3,272 megawatts per year, the savings would be just over 8 euros/MWh.
Why? According to the Government, “this rate has been the cheapest option for small consumers since its creation in 2014.” But of course, the fact that it is now linked to short-term wholesale prices causes its variations (those peaks due to the energy crisis caused by the war in Ukraine) to be reflected in the bills paid by all households. In fact, it is precisely those families covered by this system that are the great victims of wholesale electricity prices.
In times of crisis, change course. It could be said that the system was not designed for a crisis situation like the current one. As the Ministry explains in the same Royal Decree, “the escalation in electricity prices that has been observed since the second half of 2021 has called into question some of the regulatory pillars on which the sector’s regulations are currently based. electric”.
In addition, the reform includes another consequence of this situation: those who take advantage of the social bonus did not have the alternative of leaving the regulated market and switching to the free market, which establishes a price for electricity that is paid during the duration of the contract. Let us remember that consumers in a vulnerable situation must have one of these contracts as a condition to access aid.
Stop the gas. One of the measures that the Government has recently promoted to contain the rise in electricity prices has been “the cap on gas”. This plan establishes that the gas used to generate electricity has a price limit of 40 euros/MWh, although from the sixth month the price will increase by 5 euros per month until it reaches a limit of €70/MWh. Although it was a respite for the PVPC customersthis measure, which now wants to be implemented throughout the EU, has its small print as we have explained in Xataka. A series of implications that affect all consumers, including free market contracts, which had a price already agreed with the marketers.
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