High gas and CO2 prices trigger the price of light throughout Europe

The high gas prices in international markets and the increase in CO2 emission rights are causing that in recent months the price of electricity in wholesale mar

High gas and CO2 prices trigger the price of light throughout Europe

The high gas prices in international markets and the increase in CO2 emission rights are causing that in recent months the price of electricity in wholesale markets marquen daily unusually high levels not only in Spain, where week after Week is recorded historical maximums, but throughout Europe.

However, and despite the fact that electricity prices in the country's environment countries are also found in values that exceed 130 euros the megawatt hour (MWh), not all consumers feel in the same way the oscillations of the Mercado Wholesalers.

While in Spain the daily price of the light that customers pay to the regulated or PVPC fee (almost 11 million consumers) depends on the wholesale market, countries such as Portugal or France set the market rates once or twice a year, So consumers do not suffer daily variations in prices.

Behind this escalation of prices are both the increase in gas in international markets, which is increasingly close to 70 euros / mwh when it costs almost five times less, as of CO2 emission rights, which Duplicate the price of a year ago.

But although there are differences in the functioning of the bill of the light of each country, the prices of electricity are equally elevated, causing the megawatt time to be paid today in Spain at 159.37 euros (same price as in Portugal when sharing Market), followed by Italy (156.69 euros), France (139.67 euros) and Germany (133.76 euros), and only behind the United Kingdom, where 150.22 pounds are reached (about 176 euros) .

In Spain, as is usual, this week two new historical maximums were recorded in the wholesale market, leaving the record set at 188.18 euros / MWh last Thursday, and stands on average so far in September At 147.57 euros / MWh, 40 euros above almost 106 euros / MWh with which it was closed on August, the most expensive in history to date.

In the neighboring country of Portugal, which he shares market with Spain, the records of the price of electricity have not been reflected in the receipt of the light of consumers so expressively because the regulated rates are not directly linked to the wholesale market, but that establishes them annually the regulatory entity of energy services (ERSE).

Even so, the vast majority of customers (85%) are in the free market, so their rates are directly fixed by the marketers, and the government has already assured that it has tools to deal with this situation, so that the Rate increases in 2022 will be "marginal".

In France, the Energy Regulation Commission, an independent body, sets the tariffs that EDF (and the other historical operators) have to offer private customers who are in the regulated market, and that are updated twice a year, On February 1 and August 1.

Wholesale market prices only influence one third of the final invoice, since another third is to cover the cost of networks and a last third are taxes, while alternative operators can make offers at fixed or variable prices.

In addition, thanks to EDF's nuclear reactors that generate 80% of electricity, the Gallo country offers the cheapest prices in Europe, allowing EDF competitors to buy part of their nuclear production at a fee imposed, and which is currently 42 euros / MWh, far below the current price price.

For its part, in the United Kingdom the price of electricity in the wholesale market reached its peak of this week at 2,500.01 pounds per MWh (about 2,930 euros), due to the increased gas, the lack of wind in Ireland and a Fire that caused the closure of a high voltage cable that matters energy from France.

Although in the UK each Electric sets its own electricity rate, since 2019 the British Government limits the receipt of light that paid the 15 million users paid at variable or predetermined rates -normally, the most expensive- according to a maximum That the Offer Regulator agrees twice a year and accounts for 40% of the total invoice.

Faced with the current situation, Offer announced for October a rise of 139 pounds (about 163 euros) of the tariff limit price, an increase that, according to the regulator, customers can avoid hiring a fixed fee or negotiating with their provider.

In Italy, the receipt of light in the wholesale market, which are subject 42.7% of domestic customers, is being affected by high electricity prices, which is going in September standing on average at 143.21 euros / MWh.

The Energy Authority, Networks and Environment of the Country (Arara), an independent body that quickly updates the reference economic conditions for customers of the wholesale market, has already warned that between July and September families are going to pay a 9.9 % more year-on-year by electricity.

For this reason, the Italian Government studies actions to alleviate this impact that would go through the temporary disposal of VAT (currently 10%), a new cut of system charges until December or a longer-term reform that extracts these receipt expenses and include them as charges to rents, so that they are progressive taxes.

In Germany, which has the most expensive prices of electricity according to EUROSTAT data of 2020, the fixation of the price of electricity for final clients (individuals and companies) is the responsibility of the respective supply company, which establishes it independently , and the final customer has freedom of choice with respect to its electricity supply company and can change the provider.

In the last twenty years the price of the Kilowatio Hora has doubled for the average consumer, and during the last days records are being reached, with 200.88 euros / MWh reached at auction on September 13.

Updated Date: 20 September 2021, 21:51

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