The average price of electricity in the wholesale market will skyrocket this Thursday by 34.44% compared to yesterday and will be above 340 euros per megawatt hour (MWh), registering the third most expensive price in history, at slipstream of the rise in the price of natural gas due to the impact of the war in Ukraine. Specifically, the average price of the ‘pool’ for this Thursday will be 341.52 euros per megawatt hour (MWh), about 87.49 euros more expensive than the price of this Wednesday, located at 254.03 euros/MWh, according to data published by the Iberian Energy Market Operator (OMIE) collected by Europa Press.
By time slots, the maximum electricity price for this Thursday will be between 09:00 and 10:00, with 400 euros/MWh, while the minimum, 260 euros/MWh, will be recorded in the last hour of the day. The prices of the ‘pool’ have a direct impact on the regulated rate -the so-called PVPC-, to which almost 11 million consumers in the country are covered, and serve as a reference for the other 17 million who have contracted their supply in the free market . The average price in the wholesale market for this Thursday is only lower in the historical series than the maximums of last December, when on the 22nd it reached 360.02 euros/MWh and on the 23rd it reached 383.67 euros/MWh.
A slipstream of the highs of Natural Gas
Today’s annual maximum occurs in full rise in the price of natural gas as a result of Russia’s invasion of Ukraine. Thus, natural gas futures contracts traded on the Dutch TTF platform yesterday momentarily reached a record price of 194.72 euros/MWh. The wholesale price of gas in TTF has not reached these price levels since December, when it slightly exceeded 180 euros per MWh. Compared to just a year ago, the pool price for this Thursday will be 541.47% higher than the 53.24 euros/MWh of March 3, 2021.
The electricity bill in February doubled that of last year
The electricity bill of an average user with the regulated tariff reached 131.29 euros in February, 111.5% above the 62.08 euros of the same month last year. According to data from Facua-Consumers in Action, this year-on-year increase was the highest to date, exceeding the 103% that rose last December and “its price also broke all records, standing at 140.62 euros”. Electricity closed 2021 as the most expensive year in the historical series, with an average price of 111.93 euros/MWh due to the upward spiral registered in the pool in the second half.
Extension of tax cuts
The President of the Government, Pedro Sánchez, announced yesterday in the Congress of Deputies the extension until June 30 of the current tax reductions on electricity, additional discounts on the social bonus and aid for industrial consumers. Specifically, Sánchez explained that the Government will extend the current tax cuts — VAT from 21% to 10%, suspension of the tax on generation from 7% and lowering the special electricity tax from 5.11% to the legal minimum of 0.5%. — until next June 30. The temporary cut to non-gas-emitting power plants for their ‘profits from heaven’, approved by the Government last October, and softened weeks later to exclude from it the energy sold in long-term contracts will also be extended. Likewise, Sánchez announced the extension of the discount on the electricity social bond, inviting regional and municipal governments to approve protection measures for vulnerable consumers.