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Electricity prices are not letting up, rising almost 8% so far in July


CE Noticias Financieras  

 

    The electricity bill of an average household covered by the Voluntary Price for the Small Consumer reaches 74.70 euros so far in July, which represents an increase of 7.6% over the same period in June, when it amounted to 69.40 euros.

    This is reflected in the electricity bill simulator of the National Commission for Markets and Competition (CNMC), which reveals that with respect to last year, this has shot up by 60.5% since the bill rose to 46.54 euros in the same period of 2021.

    This rise, which is slowing down compared to the first weeks of July when it was close to 20%, occurs despite the entry into force on June 15 of the cap on gas, an initiative that is lowering the electricity bill but that, for the moment, does not serve to stop rising as the cost of gas continues to soar and the drought and lack of wind are causing an increase in the use of this technology. In addition, the VAT rate has been reduced from 11 to 5%.

    With this, the year-long trend continues to be upward and recovers the intensity of previous months after almost disappearing in May. This is explained by the high price of gas in international markets, in addition to the fact that CO2 emission costs are also at a maximum and this affects the price of producing energy with gas combined cycles, which, being the most expensive, end up setting the final price.

    The trend for the last year continues to be upward and recovers the intensity of previous months.

    This evolution of the price of electricity corresponds to the bill of an average consumer with a contracted power of 4 kW and an annual demand of 3,240 kilowatt hours (kWh).

    In June 2021, the new system for the formation of tolls and the regulated costs of the bill came into force, with the three hourly billing brackets. In order to simulate the price, a consumption of 30% during peak hours, 25% during flat hours and the remaining 45% during off-peak hours was calculated.

    These fluctuations in the price of electricity are basically due to variations in the cost of production.

    These fluctuations in the price of electricity are basically caused by variations in the cost of production, which increases when there is little contribution from renewable generation sources such as water and wind and much from more expensive fossil fuel sources, especially gas or coal. It is also affected by other factors such as the price of oil and CO2 emission rights.

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