Cost of Electricity Soars

Monday, May 21, 2018
By Martin Myall

SPN Electricity BillAnd you think the price of petrol is going up fast – what about electricity! In the first fortnight of May the price per MWH went up 13%!

It was back in January 2017 that the Prime Minister reassured viewers during a TV interview that the price would come down, “because it was going to rain.” That might sound an odd thing to say until you take into account hydro-electricity production during a drought.

Last month it was very wet, so you would think that electricity would have become cheaper, but no, not on your life – it went up 6.2%. So much for the PM’s theory. In fact, Spain was the only country in Europe where the price of electricity went up during April.

According to experts, the reason for the increase in price per MWH during the first two weeks of this year was thanks to the increase in the price of natural gas, which many hybrid generating stations use.

The price of gas went up 42% compared with last year whilst the price of coal went up 36%. All this, of course, pushes up the price of electricity.

The way that the price of electricity is worked out in Spain is that the price is set the day before through bidding. Renewable power is the cheapest and so it is snapped up, then comes the second cheapest, and so forth, until you get to the most expensive kind of power generation, and it is this last one that sets the price per megawatt for the whole lot.

This explains why despite their being more hydro-electricity about, the price still goes up.

(News: Spain)

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