The best way to save on electricity bill without depriving yourself of anything
Recent wholesale electricity data show that prices are easing in the short term. On Thursday, the average market price slipped by 1.5 percent compared with the previous day, remaining under 190 euros per megawatt hour for a second consecutive day. The Iberian Market Operator reports an average around 182.67 euro per MWh, down 2.78 euros from Wednesday’s 185.45 euro mark.
Peak and trough moments mark the day. The highest price is expected between 08:00 and 09:00 at about 215.71 euro/MWh, while the lowest price occurs during the late afternoon, around 16:00–17:00, near 154.37 euro/MWh.
Compared with the same date a year earlier, Thursday’s averages show a significant rise, with prices about 123.86 percent higher than the 81.6 euro/MWh level observed on 9 June 2021. The pool price, which directly influences the regulated PVPC rate used by roughly 11 million households, also helps set benchmarks for the remaining 17 million consumers who choose the open market.
Official figures confirm that in 2021 a sizable portion of households shifted from PVPC to a fixed free-market rate. The shift happened within a climate of rising energy costs, reinforcing the importance of understanding how wholesale prices impact household bills.
The best way to save on electricity bill without depriving yourself of anything
GAS CAP: 600 MILLION MORE EXPENSIVE IN SPAIN THAN PORTUGAL
On 14 May, the Official State Gazette published a Royal Decree outlining a gas-price cap designed to limit electricity generation costs to an average of 48.8 euros per MWh over a 12-month period, aiming to ease prices during the upcoming winter when energy costs tend to rise.
Although the mechanism appears in royal form, it still awaits formal approval from Brussels and will be initiated through a ministerial order of implementation. The decree estimates that the cap will reduce the consumer PVPC bill by about 15.3 percent over the 12 months following its application for natural gas–generated electricity. A note from Europa Press outlines these calculations.
For industrial users who pay market prices, government projections suggest a reduction of roughly 18 to 20 percent in bills, with an initial impact ranging from 13 to 15 percent in the first month after the mechanism starts, and a broader 15 to 17 percent in the following period.
Teresa Ribera, the Minister for the Ecological Transition and Demographic Challenge, acknowledged some uncertainty in the exact drop once the gas cap is in effect, yet she expects a 15 to 20 percent range overall. Under the cap, Spain and Portugal share the same price-limiting approach, with estimates indicating Spain may incur higher immediate costs than Portugal for implementing the mechanism, according to industry sources cited by Europa Press. The extension of electricity futures contracts and sector-specific nuances influence the final outcomes.
What does it mean to separate the price of electricity from gas?
Understanding the distinction helps explain why electricity bills can move differently from gas costs. The electricity price calculator allows users to see the price per kilowatt hour by simply selecting any device in the calculator interface.
STABILITY SINCE STABILITY
When the conflict in Ukraine intensified on February 24, wholesale prices stood at 205.6 euro/MWh. Prices rose through early March, peaking at a historic high of 544.98 euro/MWh on March 8. Since mid-March, the market has hovered around 250 euro/MWh, with a downward trend in the most recent days placing averages below 230 euro/MWh.
MARCH THE MOST EXPENSIVE MONTH IN HISTORY
The market began February 24 in a price zone of 205.6 euro/MWh and moved upward, culminating in March with a record peak of 544.98 euro/MWh. The March average reached about 283.30 euro/MWh, a level that placed it well above the December 2021 benchmark, underscoring the historic volatility of electricity pricing during that period.
Here is the new electricity tariff
Wholesale prices hold direct influence over the PVPC, the regulated tariff that covers roughly 11 million consumers in Spain and serves as a benchmark for the 17 million who contract on the open market. The ongoing Ukraine-Russia conflict has the potential to push energy prices higher, especially for gas, as European imports face renewed constraints. To soften the impact on households, the government extended the VAT reduction on electricity bills and maintained a reduced electricity tax through late spring. Price pressures across Europe stem in part from higher international energy costs and CO2 emission rights, which influence hourly market pricing.
How to save more than 500 Euro per year on electricity bill?
To mitigate price pressures, the government extended the VAT reduction and energy tax relief for the initial months. The broader energy dynamics cited above—rising costs in international markets and the gas use in power plants—help explain the prevailing market trends and the influence of CO2 rights on hourly prices. The ongoing conflict in Eastern Europe adds another layer of uncertainty as sanctions and supply disruptions could affect future prices. The government has signaled continued support measures to ease bills for consumers during this period of adjustment.
2021 became the most expensive year of electricity
The year 2021 ended with electricity being unusually costly, driven by the upward trajectory in the pool market during the second half of the year. The average daily market price for January stood around 201.72 euro/MWh, marking a substantial year-over-year increase and reflecting a period of extreme volatility. The government extended tax relief measures for electricity bills through early spring in an effort to cushion consumers from the sharp increases. The temporary VAT reduction from 21 percent to 10 percent and the electricity tax relief to zero percent were extended, while certain production taxes faced a shorter extension window rolled out to March 31st for now.