What's happening to electricity prices?Life in Spain Wed, 19 Feb 2014
If you own a property in Spain chances are that your recent electricity bills have given you cause to draw breath. The majority of householders have noticed a steep rise in Spanish electricity prices over the past few years.
It isn’t just a case of poorly insulated homes or wasteful home owners. Spain’s electricity bills are amongst the highest in Europe and have risen 60% between 2006 and 2012. Two price rises in October and August have made a significant difference to bills and they were due to go up even further in January.
The forecast had been for another 11% rise to welcome in the new year. However, the government interceded and the price rise was reduced to a slightly more reasonable 2.3%. But why should there be any price increase at all?
In El País a recent article has highlighted some of the reasons behind the continuously climbing cost of electricity in Spain. They report that according to the government, the problem has been caused by an electricity deficit. There is a difference between the amount it costs the electricity companies to power generators and how much money they get from their customers.
It’s renewable energy that’s partly being blamed for this. Subsidies were provided for those generating their own electricity through means such as solar power. The trouble is they produced more than anticipated, whilst the running costs of the ordinary power generators and intermediary equipment remain.
El País reports that for some time the charge passed down to customers remained capped and now the electricity companies are trying to make up the deficit. The tendency to limit electricity price increases goes back to 2002 when they were prevented from rising by more than 2% each year. This was in spite of higher production costs. A situation that has been maintained for almost a decade.
El País, however, point out there are other factors and interests at work too. Electricity is produced in different ways, some methods have much higher operating costs than others. Consumers pay the same amount, meaning that some producers and brokers are making big profits that consumers don’t see the benefit of.
In the end, all the theory around the escalating cost of heating and lighting your home makes little difference to those faced with paying the bills. Electricity can hardly be classed as a luxury item in our society. In most cases households are dependent on it for their most basic of facilities. Lighting, heating and cooking often depend upon it and many households rely on electricity for their hot water. Some will not be able to afford it this year.
According to El País, the Red Cross are estimating that around 40 % of the families who come to them for help cannot keep their homes warm in winter. Last year, 1.4 million homes had their electricity cut off for non-payment. A society in which such large numbers can’t access one of the most basic household needs is a problem for everyone.
‘The shocking price of Spanish electricity’ El País in English, 1st January 2014.