Teresa Ribera, Minister for Ecological Transition, indicated that consumers will notice a drop in their electricity bills as a result of measures taken by the Government. These include the reduction in tax burden (VAT at 5.5%) and gas cap (in effect since last June 15. She clarified, however, that she is referring to a “relative reduction” compared to what it would be without these measures. The Executive has had to adjust its expectations due to the volatility in the market over the past month. If these measures hadn’t been taken, electricity prices in Spain would have risen 15%. Ribera said that the bill would drop by around 30% if there is an additional 80% reduction in taxation and fixed cost.
Absolute terms, it is possible to produce a smaller reduction for those with a PVPC (of the regulated markets) and a greater reduction for those with a rate on the free market”, Ribera indicated.
The average electricity price for customers at regulated rates who are connected to the wholesale market will fall by 2.23% to 226.57 euros per megawatt-hour (MWh) this Wednesday. This is due to the 145 euro/MWh cost of the daily pool’. To this amount, 81 euros/MWh compensation must be paid to the gas companies. Once again, the contribution of combined cycles exceeds 25% to the electrical “mix”.
However, Europe’s demand for gas will fall 9% in 2019 compared to 2021 data. The drop in gas consumption was not even relevant during the year of pandemic. According to the International Energy Agency (IEA) latest forecasts, global gas demand will also decline in 2022.
