Electricity prices skyrocket coinciding with coldest fortnight since 2012

The price of electricity in Spain has skyrocketed in the past few days, coinciding with Storm Filomena which has affected much of the Iberian Peninsula – in Catalonia, official data show that the first days of 2021 have been the coldest fortnight since 2012. 

Electricity bills increased by 26.7% in the first days of the year compared to the same period of 2020, according to the latest analysis by consumers' rights association Facua, published on Tuesday. On average, taking into account the current prices, the average monthly bill is currently €86.50, significantly more than the €68.30 exactly twelve months ago. 

The megawatt per hour (Mwh) price has been hitting peaks since January 7, with an average price of €89.94 per Mwh on January 13 – this Tuesday is the second-most expensive day of this period in terms of electricity, after January 8. 

The most expensive hour of 2021 has been from 9 pm to 10 pm on January 11, at €121.14 per Mwh. 

On January 13, the most expensive hour will also be from 9 pm to 10 pm, at €112.84/Mwh. 

In 2020, the monthly average price of electricity was between €17 and €41 per Mwh, far from the current peak. 

Yet, Endesa, one of the largest companies in the electricity sector in Spain, explained that the high prices are precisely down to the cold conditions, resulting in the increase of demand – companies use first the always cheaper renewable energy, but if the demand is high, ecological fuel runs out and they have to use nuclear and fossil fuels, more expensive. 

Spotlight on government for regulation

The Spanish government has been in the spotlight for the past few days to somehow regulate the market in order to avoid the electricity price skyrocketing every time the temperatures decrease. 

For instance, the Catalan cabinet accused Madrid of "failing to perform their functions" in not avoiding the high cost of power in the midst of a period of intense cold.  

The Socialist-led executive responded to the criticism saying that the peak is "exceptional" and that it will not stay – spokesperson María Jesús Montero said that on average, the price has decreased by 40% in the past two years. 

Power cuts due to overload

On top of that, the high demand has resulted in an overloading of the electrical network and frequent power outages across Catalonia, with municipalities affected including Barcelona's Raval and Torre Baró neighbourhoods. 

The Catalan capital's mayor, Ada Colau, urged Endesa and the Catalan and Spanish administrations to react to the issue in a letter sent on Tuesday. 

"We cannot tolerate situations like the one we are living in, in which some families cannot heat their homes or, in extreme cases, they have people depending on electricity due to the need to connect breathing equipment," she wrote.  

Colau said the problem is the lack of investment in maintenance of the network.

The power cuts are also occurring in other municipalities such as Badalona, where its mayor, Xavier García Albiol, called the wiring network "obsolete" and said it was like something from the "Third World." 

A neighbourhood spokesperson also said that the network is "outdated," while Endesa says that some of the cuts are due to people manipulating electricity meters to reduce their bill.