Updated on Saturday, 2 October 2021 – 02:33
Ribera has asked the main agents of the sector, from companies to consumers, to convey their opinions on how the reform should be carried out within 21 days.
The vice president of Ecological Transition, Teresa Ribera.
The Government warns that more volatility is coming in the electricity market as a result of the decarbonization process in which the country is immersed. According to their calculations, the progressive entry of renewable energies into the market will sink the cost of the megawatt hour in the hours of the day with the greatest wind and solar resources, but this will skyrocket when there is no wind and sun when having to use combined gas cycles to produce electricity. The result will be a price slide that, according to the Executive, generates alarmism among citizens and makes it difficult for families to understand the electricity bill.
This volatility crisis began last August and has already materialized in the concatenation of a twenty records in the daily price of electricity in the wholesale market. This market has a direct impact on the domestic bill, especially for the 10.6 million households subscribing to the so-called Voluntary Price for the Small Consumer (PVPC). For the rest, who have signed the supply in the liberalized market, the price is periodically updated according to the expected behavior of the price of electricity.
The Ministry of Ecological Transition now seeks to extrapolate this formula in a staggered manner to the PVPC, eliminating its indexation to the wholesale market. The result is greater stability and visibility in the bill and, incidentally, savings in political costs for a government that has been suffering since last August a reputational impact almost daily due to market records. What is more difficult to calculate is the effect of the measure at the cost level, since establishing a fixed price usually carries a financial surcharge.
The Government argues that the evolution of electricity observed in the last three months has motivated the opening a period of reflection about its current configuration of the PVPC, which may lead to a new regulatory development to modify its structure. “Although it is true that variations in wholesale prices in the electricity market, when sustained long enough, end up being transferred to all electricity consumers, from different areas of society (companies in the sector, consumer associations). It has been pointed out that it is paradoxical that consumers with lower consumption are those who are exposed to greater volatility in the price of their electricity consumption, although this greater volatility does not translate into higher prices in the long term “, highlights the text that collects the query.
The Executive’s idea is that the decoupling be done in a staggered manner and the cost is linked to baskets with more stable futures prices and to the fixed-price auctions that the electricity companies will have to carry out to promote competition, as EL MUNDO already advanced. The department that directs Teresa Ribera has asked the main agents of the sector, from companies to consumers, to convey their opinions on how the reform should be carried out in a within 21 days.
The reform of the receipt comes after the Government has delivered an ax 2.6 billion euros to large electricity companies to contain the electricity bill. The measure is already having its first repercussions on the market price, since renewable solar and wind installations are ceasing to function in some periods of the day to avoid the cut in their income contemplated in the regulation.
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