The price of light will continue to rise during the next 10 days.
The price of light will remain high, at least, what remains of January. The wholesale cost of electricity will reach a new record today since December 2013 when it surpassed the barrier of 85 euros per megawatt hour (mwh) , 9% more than yesterday. In the late afternoon hours the price will be reheated even more to exceed 95 euros, according to the data published by the operator Omie.
The worst thing is that according to the forecasts of the electricity market, the high prices will be maintained for the next 10 days, marking a new maximum tomorrow on Friday. From then on, the cost will be reduced over the weekend due to the drop in demand , although during the next week it will still remain above 70 euros. This price doubles the 33 euros that were recorded on average in January 2016 and exceeds by 37% the cost of 51 euros in the same month of 2015.
The rising cost of the market has a direct impact on the domestic tariff paid by millions of households under the Voluntary Price for Small Consumers (PVPC) , the old regulated tariff. The cost of the wholesale market accounts for around 30% of the bill, since the rest is made up of taxes and tolls that remain frozen.
The price increase will be extended in the coming days unless the weather conditions change, as explained yesterday the Minister of Energy, Álvaro Nadal. "The weather would have to help with water and wind," he said in an interview with the Cope Network. This would give a greater weight in the market to renewable energies, which match their offers in the wholesale market at zero price -part of them then charge a regulated premium- and reduce the presence of technologies with higher costs such as gas or coal.
Apart from this, Nadal yesterday opened the door to take "economic policy measures" to lower the price of electricity. The electricity companies are asking the Government to reduce the VAT rate (21%) imposed on this product or to eliminate the Electricity Tax (7%). This situation seems to be ruled out since it would reduce the State's income and move away from meeting the deficit target imposed by the European Union.
The Ministry of Energy is looking for other technical measures to try to stop the price escalation immediately and, in this sense, has asked for advice from the National Commission of Markets and Competition (CNMC) on what it can do.
Sources consulted in the sector point to the activation of the interruptibility service to provide greater flexibility to the market and remove tension on prices. This service consists of a kind of insurance that consumers pay the large industries of the country to disconnect from the system in times of maximum demand and avoid blackouts. The interruptibility system supposes an annual cost to the system of 525 million euros even though it is not practically used.
Source: The World .
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