RESIDENTS in Spain can breathe a huge sigh of relief this weekend – electricity costs will drop from Saturday to their lowest since June 2021.
At a wholesale price of €56 per megawatt per hour (mWh), this is around a quarter of the costs seen in recent months, where figures of over €200 were becoming commonplace.
Prices are around half of those seen in September (€102.56 per mWh) and a third of those of August (€153.34 per mWh).
Whilst Spain's government has worked to cap bills for households and industry – through tax cuts and windfall taxes on energy companies – the cost of electricity generated in the country has never yet fallen to the €53 per mWh seen on June 20, 2021.
Back then, utility bills had been relatively stable for some years, with only minor rises or falls according to the wholesale cost at bi-monthly auctions.
It was in summer 2021, or just under a year and a half ago, that the retail price of electricity at source began to soar.
The price for Saturday, the result of the latest wholesale 'energy auction', is the lowest it has been since then.
In Spain's case, although the conflict in Ukraine has had an impact on fuel prices worldwide, mains electricity and gas are far less dependant upon the Russian pipeline, meaning the efforts requested by the European Union of member States to cut their consumption by at least 15% this winter are somewhat more relaxed on Spanish soil.
Part of the reason for this is that Spain's gas ports supply 35% of Portugal's electricity and between 4% and 5% of that of France, meaning the country generates more than enough of its own not to have to worry about a potential shortage if the Russian supply is affected.
Why have prices fallen?
Some of the reason for the reduction in prices, which will reflect in householders' and business owners' bills, is due to the increasing generation of renewable energy for the mains supply.
Wind power is now a particularly strong element, with over 50% of national electricity production coming from wind farms as at this week.
Read more at thinkSPAIN.com