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Date Published: 06/09/2021

ARCHIVED - Electricity prices set new record highs and will keep rising until March

ARCHIVED ARTICLE

The price of electricity in Spain this Monday increases to 132.65 euros/MWh, the most expensive ever

<span style='color:#780948'>ARCHIVED</span> - Electricity prices set new record highs and will keep rising until March

The cost of electricity now stands at 132.65 euros per megawatt hour, making this the most expensive Monday on record in Spain. That’s an increase of nearly 4 euros compared to Sunday, according to data from the Iberian Energy Market Operator (OMIE), and energy prices aren’t likely to fall until March 2022.

The average price on Monday is 132.65 euros per megawatt, with the maximum peak being at 20.00 when it reaches a value of 153.63 euros. The minimum will be 108.52 euros between 04.00 and 05.00 in the morning.

While the price of electricity in Spain fell slightly over the weekend, it was still the most expensive weekend in history. Now, prices are on the rise again and they don’t look set to stop any time soon, with energy expenditure now making up over 50% of the household bills for most consumers. Based on historical supply and demand levels for natural gas, everything points to prices remaining at these levels and even higher until around March 2022.

Nonetheless, Spain’s President Pedro Sánchez has assured that ‘by the end of 2021 we will have paid the same for electricity as we did in 2018’, and he is also implementing measures like reducing VAT from 21% to 10% and raising the minimum wage.

The most expensive August ever

This August has become the most expensive month for electricity in Spanish history, with an average price of almost 106 euros per megawatt hour. Already in September, the average price has been just over 136 euros per megawatt hour, triple what it was in September 2020. Last Thursday September 2, the wholesale market price reached its highest daily average ever recorded: 140.23 euros per megawatt hour.

Why are electricity bills so high?

The main reasons for the rising energy prices are the soaring costs of CO₂ emission rights in Europe and the international price of gas. Taxes, regulations and the price of raw materials all also contribute to average energy prices. There was also less energy available from renewable sources this summer because there wasn’t much wind, and high temperatures meant people spent more on air conditioning. While temperatures are no longer that high as we move into autumn, gas markets threaten to continue rising until at least spring 2022, so energy prices won’t let up until then.

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