Glenn Wickman
THIS month’s electricity bill will be the most expensive ever in Spain for April.
Furthermore, market prices are predicted to hit €65 per megawatt per hour over the second half of the year, meaning the total bill for 2021 will be the most expensive in recent history.
Supply currently costs triple the amount it did this time last year, and the price has shot up by 60% with regards to March.
Reasons for the three-fold increase compared to April 2020 include an increase in demand – as this time last year Spain was in lockdown with many businesses closed -, escalating gas prices and an increase in cost for CO2 emissions.
In addition, experts have highlighted a series of problems with the French nuclear power system, which has led to a surge in activity and impacted the global European market.
Electricity is usually cheaper during these months due to the production of renewable energy sources and the general weather conditions, which do not require vast outgoings on heating or air conditioning.
Not so this year, however, as daily market prices have spiralled from €17.65 per megawatt per hour in 2020 to €58.13 this year.
Yesterday (Tuesday April 21) marked a new record – €79.6 per megawatt per hour, a ridiculously high price taking into account the temperatures and average electricity demands at this time of year.
The gas situation is particularly worrying. Last year, Asian supply demands were at rock bottom, meaning Europe received all the excess production of natural liquid gas from the USA.
This gave Spain large deposits of the raw material, which forced prices down to historic lows.
However, the situation reversed at the beginning of 2021, when Europe was forced to compete for supplies with Asian countries. High demands from China and India, coupled with the fierce cold snap that affected the continent in January, pushed prices up.
Gas is now said to be 200% more expensive than in 2020, which is having a direct effect on electricity costs.
Meanwhile, renewable energy production continues its upwards trend and covered 53% of the total power supply over the first fortnight in April.
However, the steady growth of solar, wind and water-generated power has so far been insufficient to counteract the strong impact caused by the price of CO2 emission rights.
READ MORE:
- Green energy sparks lowest electricity prices in Spain for 17 years
- Why did the Minister of Finance refuse to lower the VAT on electricity in January
