The average price of electricity in the wholesale market will drop 27.2% this Saturday, Christmas Day, compared to the price on Friday, to 226.42 euro per megawatt hour (MWh), which is the first time it drops below the 230 euro mark in two weeks.
For Christmas Eve, the price of electricity already registered a decrease of 19% but still remained above 300 euro. Now, with this new drop, the cost leaves behind the last two weeks of continuous increases and consecutive records, accumulating a fall of almost 50% between Christmas Eve and Christmas.
In any case, the cost of electricity in the wholesale market continues to skyrocket when compared with the records of the same day of the previous year. At Christmas last year, the price was limited to 16.04 euro / MWh, so the increase is 1,312%, that is, now it is up to 14 times more expensive than a year ago.
As it is a holiday, in this case in a large part of the world, the demand is much lower – companies and other large consumers close – which explains why the price falls. However, despite being Christmas, it will be one of the most expensive days in history.
Compared to the same Saturday last week, when it was at 306 euro, the price of electricity fell by 26%, according to data published by the Iberian Energy Market Operator (OMIE).
The maximum price of electricity for this Saturday will be between 9:00 p.m. and 10:00 p.m., with 315.12 euro / MWh, while the minimum price will be 125.31 euro between 5:00 a.m. and 6:00 a.m.
The prices of the ‘pool’ have a direct effect on the regulated tariff –the so-called PVPC–, to which almost 11 million consumers in the country are welcomed, and serves as a reference for the other 17 million who have contracted their supply in the free market.
The rise in prices in the electricity market in recent months is mainly explained by high gas prices in the markets and carbon dioxide (CO2) emission rights, at record highs this year.
December began as a month marked by great volatility, with falls in the average of some days to around 100 euro / MWh and with certain rises that far exceeded the level of 200 euro / MWh and, since December 16 , 300 euro / MWh.
The rising cost of electricity has run wild and the average monthly price now exceeds 260 euro, that is, about 60 euro more than last October, the month with the most expensive average to date.
On Tuesday, the Government extended until April 30 the reduction of taxes included in the electricity bill paid by all consumers, in order to alleviate the negative effect that the rise in the price of electricity is causing on citizens.
Specifically, the reductions from 21% to 10% of IVA and the special electricity tax from 5.11% to 0.5%, the legal minimum, were extended until April 30. However, the suspension of the 7% generation tax paid by companies will only be maintained, for now, until 31 March.
