JAN 2017
Why is the Electricity Bill in Spain Hitting Extremely High Prices?
Eloy Márquez, Senior Enery Advisor at ONTIER.

Why is the Electricity Bill in Spain Hitting Extremely High Prices?

ONTIER’s Energy Advisor Eloy Márquez explains the main reasons.

The price of the electricity bill in Spain will rise today Wednesday to €102/MWh. It is the maximum price the electricity bill has ever reached, and as stated by Spanish Minister of Energy Álvaro Nadal, this could mean paying €100 more in electricity bills yearly for every Spanish family. But why this rise in the price? Which are the reasons? Eloy Márquez, ONTIER's Senior Energy Advisor explains the main reasons:

  1. Environmental conditions. Eloy Márquez states that environmental conditions caused this rise among other factors: ''The scarcity of rains and winds, the winter season and the cold snap we recently had in Europe affected the electricity prices due to the growth in energy demand''.
  2. Supply and demand within the electricity pool. The price of electricity in Spain depends on the electricity pool, as it happens in many other countries. According to Expansión, the electricity pool is the wholesale power market. In this market led by the operator Omie, electricity is sold and bought in a daily basis. The final price of the electricity, paid equally to every power generator, depends on the last supply cost. Renewable energies, with a price of €0, are the first energies to enter the electricity pool. But due to the scarcity of rains and winds, this time they're out of the electricity pool. Therefore power got more expensive. ''The less renewable energies get into the electricity pool, the more expensive power gets, since the final price of electricity is determined by the last supply cost, i.e. the last energy source to enter the electricity pool, which is usually the most expensive too'' explains ONTIER's lawyer.
  3. Nuclear power stations shut down in France. In Spain it's more profitable to import electricity from other countries and export the power we produce. Since about 50% of nuclear power stations in France are currently shut down for checking tasks, they buy the electricity we produce in Spain. ''The higher the energy demand in the country, the more energy sources enter the electricity pool. Therefore the final price rises for every type of power,'' states Eloy Márquez.
All in all, these are some of the reasons leading to the current rise in the electricity bill, which according to ONTIER's Energy Advisor Eloy Márquez, is just a temporary condition mostly caused by the climate.

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