Spain’s largest consumer association estimates that an Iberian mechanism that caps the price of gas used to generate electricity prevented Spaniards from paying “the most expensive electricity bill in history” in July.
The mechanism went into effect two months ago, on June 14, and during this period, Spanish consumers’ electricity bills increased, but less than in other countries such as France or Italy, and they also paid less electricity bills than in March. , immediately after the start of the war in Ukraine, which exacerbated the rise in energy prices, Enrique Garcia, a representative of the Organization of Consumers and Users (CPU) in Spain, explained to Lusa.
However, he added, the mechanism’s impact on electricity prices is “somewhat difficult to assess” in those first two months due to the heatwaves that have devastated Spain, leading to the use of gas for power generation, and the “exorbitant increase” in the price of gas on international markets, he added.
Because of this, the Iberian mechanism had a “minimal impact” on consumer electricity bills, but still a real one, which the OCU estimates at 15%, meaning the bills would have been 15% more expensive if the measure had been agreed by Portugal and Spain. with the European Commission.
According to the OCU, under normal circumstances in Spain in July, the amount of electricity generated from gas would be about 10% of the total, but this year, with heat, without rain and wind, it was 29%. , which was reflected in the bills for the light.
With the end of summer and the arrival of more rainy and windy days, gas requirements tend to drop to 5% of the electricity produced in Spain, so the effect of the Iberian mechanism will be more noticeable from autumn, OCCU calculates.
As for the second element that affects the reporting, the increase in the price of gas in the international wholesale market, it is reflected in the accounts of consumers in the form of compensation that the electric companies must pay for the difference between the real market price, and the ceiling is determined by Portugal and Spain (40 euros per megawatt at present and a gradual increase in the coming months until it reaches 70 euros).
The effects of invoice compensation are already showing in Spain in all consumer accounts, except for those with fixed price contracts signed before April 26 this year, so the cost of electricity will be gradually distributed among a larger number. clients as contracts are signed and renewed.
However, in Spain, unlike other European countries, including Portugal, there is a large weight of consumers with the so-called “regulated tariff” (or PVPC – Voluntary Small Consumer Price) indexed directly to the wholesale gas market, and which has about 40% of Spanish families who already bear the cost of compensating electricity companies.
According to the association, the impact of this compensation on consumer bills has so far averaged 0.09 euros per kilowatt in June and 0.12 euros in July, and these values will not increase in the coming months.
“The bill has increased, but because the price of gas has risen a lot,” summarized Enrique Garcia, who explained that in July the price of gas reached 130 euros per megawatt, which is a “scandalous price”.
“Because the real price had gone up so much, more compensation had to be paid and that made the bill more expensive. In this way, the mechanism was less visible in absolute terms, but it managed to avoid an account that, without the mechanism, would certainly have been the very face of Spanish history,” he added.
Spain’s electricity price has risen 38% since June 15, but still less than the 76% increase in France or 70% in Italy, according to data published by El Pais newspaper late last week.
However, between January and March, the Spanish were the Europeans with the most expensive electricity, with an average of 0.51 euros per kilowatt compared to 0.42 in Italy and 0.21 in France, according to European data.
In the same quarter of 2021, the Spaniards paid an average of about 0.25 euros per kilowatt, and the doubling of the price within one year was attributed to the almost complete and direct impact of about 40% of domestic consumers on changes in electricity prices. gas, due to the PVPC tariff.
To respond to the impact of rising gas prices on electricity bills, Spain, in addition to the Iberian mechanism, announced VAT cuts on electricity twice last year, with the rate now at 5%, the minimum allowed by European rules.
Author: Lusa
Source: CM Jornal
