Fifteen years after the financial crisis and the great recession, many people first learned what a mortgage really is. Subprime lending, risk premiums, and credit ratings became common topics of conversation, as did the tensions surrounding the Man in Black and the Troika. And with an energy crisis of the last two years, more consumers have learned to recognize different electricity tariffs, tracking price patterns and times when it costs the most to run appliances, especially washing machines. The Iberian exception has become a notable factor in Spain’s market dynamics.
Rising energy prices have persisted at historically high levels for months, prompting exceptional measures by government authorities and the European Union to cushion the impact. This has driven a swift increase in consumer awareness about electricity and natural gas bills, with price movements accelerating relative to previous years, a shift observed in the latest Household Panel wave conducted by the National Markets and Competition Commission (CNMC) in the second quarter of this year [CNMC, Household Panel].
Yet gaps remain for millions of customers. Nearly 45% of users still do not know which electricity tariff they have chosen, and more than 63% did not know this two years earlier. By mid-year, just over half of Spanish households could not distinguish between electricity supply in the free market and the regulated market, while similar confusion persisted for natural gas. During the energy crisis, ignorance about tariff types was even more pronounced, with almost 70% uncertainty for electricity and over 77% for gas [CNMC findings].
Electricity market prices drop and certain hours fall to near zero euros
Small electricity consumers, defined as those with contracted power under 10 kilowatts, mainly households and some small businesses, may choose between regulated tariffs anchored to evolving wholesale prices and offers in the free market that are typically set by the companies with fixed terms. Historically, the PVPC path offered the lowest costs, but the crisis shattered price records across the market. The Iberian exception and a drop in gas prices have now made the regulated tariff cheaper than most free-market offers again, according to the CNMC price comparator [CNMC].
The regulated electricity tariff, known as the voluntary price for small consumers (PVPC), faced a sharp exodus during the energy crisis. In the last two years, about two million users left the PVPC pathway that major electricity players are required to offer through various marketing channels. Nevertheless, the outflow has slowed in recent months. In June, PVPC accounted for about 8.5 million customers, compared with 19.6 million small consumers on free-market plans [CNMC data].
On the natural gas side, government support to reduce bills caused a market-wide disruption. The subsidies cut bills for customers on regulated gas rates by roughly 40% and catalyzed a historic shift, with more than a million customers changing contracts. The share of total customers choosing regulated rates remains well under a third, with these options still considerably cheaper than those on the free market. The special relief for regulated gas rates, called rates of last resort, expires on 31 December, and no extension has yet been announced by the government [CNMC updates].
Alarming pricing cannibalization concerns for electricity suppliers
CNMC’s interactive tool, “Understand your bill,” helps consumers identify their supply contract, the price type (PVPC or free market), and the contract expiry date. In terms of consumption habits, four out of ten households admit they do not adjust usage to price differences during heating or laundry. However, 34.7% say they consider price variations in daily routines, while 24.4% report some level of consideration [CNMC insights].
These dynamics underscore how price signals influence everyday choices and the overall energy market’s structure, with ongoing debates about how best to balance affordability, reliability, and market competition for households and businesses alike [CNMC commentary].