One of the biggest expenses for a home or business is the electricity bill. Once again, we have noticed an increase in it this summer. The concern is that it is not going to stay like this, it will continue to rise. Do you know why?We can go back ten years on our bills and only in one of them did we reach figures similar to 2018. The average annual bill will be €788.< img class="alignright wp-image-13849 " src="https://optimaled.eu/wp-content/uploads/2023/07/example-electricity-invoice.jpg" alt="example-electricity-invoice-optimaled " width="338" height="170" />
Last April, a stopover began that has not stopped even during the summer. In fact, it is estimated that by continuing along this line we will exceed the highest limits at the end of the year.
Let’s analyze it in parts. A typical consumer has 4.4Kw of contracted energy and consumes an annual average of 3,500 Kilowatts. This consumer paid €66.40 in July, 2.1% more than in June and 4.5% more than in January of the same year. A considerable change for a few months. But even this is not the most striking figure. Maybe if I tell you that that citizen has paid 31% more than in the same month of 2009 if you find it exaggerated.
Studies estimate that your bill in December will be €71, 5.3% compared to 2017. It is clear that the bill is rising faster and faster, but…
All this data can be extrapolated by percentage to companies. A change of 31% in a matter of 9 years is a large increase in a necessary expense for all businesses.
What is the reason?
The increase is mainly due to the increase in the price of electricity wholesalers. The three components of the electricity bill are: taxes + fixed costs + wholesale price.
Wholesale prices are above the average of the last 10 years. Coal, gas and CO2 emission rights have become more expensive and so have our bills.
Generating energy, as we know it, is becoming more expensive. Specifically, coal has risen 5% in just the last few months and gas has risen 3.4%.
On the other hand, expenses for CO2 emission rights have tripled in the last year. In fact, in recent months they have gone from €16.90 to €20.90 per ton, increasing by 23.7%.
Another factor influencing this rise has been the shutdown of some of our country’s nuclear plants. In this way, they stop contributing to Spanish production. Our neighboring country, France, also paralyzed up to 20 nuclear plants last year. Thus, it begins to import Spanish energy instead of exporting it.
All this translates to more demand and less supply. That is, prices rise.
Who sets the price of the Kilowatt? The two electricity markets
The variable part of the electricity, wholesaler prices. There are two ways to set the Kilowatt price.
First of all, we have theFree Market. In it, prices are established without any type of control by the government.
Secondly, the voluntary price for small consumers. In this case it is set through the wholesale market using a digital counter or an analog counter.
- Free market: the price is set by the company and appears in your contract. Just as you know how much you are going to pay for a minute of call with your telephone company, you will have the peace of mind of knowing how much each Kilowatt you consume will cost you. The price will not vary, whether it rains more or less or is colder or hotter.
- PVPC: the price changes hour by hour and day by day according to the supply-demand between those who produce energy (generating company) and those who sell it (marketing company). If you have a digital meter, you will pay more if you consume during expensive hours and less if you concentrate your spending during cheap hours. The analog counter will perform a weighted price.
And you, do you know how you pay your electricity bill? If you want to save as much as possible on your bill, do not hesitate to visit our WEB and take measures such as renewing your lights to LED or installing motion sensors . We will wait for you!
