Electricity prices hit all-time high coinciding with biggest heatwave in 18 years

Electricity prices surpassed historic records numerous times this week, escalating to €115.83 this Thursday, €9.09 more expensive than on Monday, which was also an all-time high at the time. 

These figures are according to the Operator of the Iberian Electricity Market (OMIE).

The most expensive rate will be from 7pm to 10pm when the electricity price will remain above €124 per MW/h. The lowest price will be between 3pm and 4pm, when the amount will be €99.48 per MW/h. 

As such, electricity providers Endesa, Iberdrola, Viesgo and EDP have called for a regulated tariff due to the rise of prices. They want a “more stable” bill to avoid price volatility. 

They also stated that a greater commitment to zero-emission electricity would help reduce prices, while pointing the finger at the gas sector: “We are not making profit from the electricity prices increase, gas companies are.” 

The association welcomes the adoption of measures such as the reduction of VAT on the electricity bill - from 21% to 10% - and the reduction of the production tax to 7%.

However, it recognizes the necessity to revise the new tariffs that were introduced in early June, as other European countries have already done, in order to avoid price escalation such as these last days. 

Moreover, it insists that renewable production must be encouraged. “The further we move in this direction, the faster we will move towards a cheaper energy price,” a spokesperson said.  

Heatwave

This escalation coincides with a heatwave creating conditions not seen in 18 years in Catalonia. 

The arrival of a mass of Saharan air will create extreme conditions with high temperatures of more than 40 degrees, leading authorities to suspend much activity in mountainous and rural areas across Catalonia this week.

Numerous fires have already broken out in rural areas of the country, needing the attention of scores of fire brigades. 

The heatwave could further trigger electricity demand, and as a result, would continue to increase the price. 

In the last month, prices hit record highs six times, all above €106 per MW/h. 

Marc Bonet, in charge of business development at Barcelona Energia, said that these prices are expected to be around €90 per MH/h until the end of the year. 

In addition, the Association of Electric Power Companies recalls that the rise of electricity prices is caused by the increase of gas prices and CO2 emissions. This causes each consumer to pay €4 per month, almost €50 extra a year.