In Spain, the price of the energy we need for our daily life changes depending on the company and the contracted rate. In this article, we’ll try to shed some electricity on the ins and outs of Spain's electricity prices and other factors today.
The kilowatt hour (kWh) is the unit that measures the amount of electricity or natural gas consumed during a specific billing period. The price per kWh is the cost that customers pay on their bill for the consumption of electricity or natural gas in his home or premises.
The energy term of the electricity bill determines the amount that the customer must pay for the consumption made. Thus, the energy term is calculated by multiplying the number of kWh consumed by the kWh price established by the company. The kWh price is the sum of the energy price and the cost of the contracted access rate. In Spain, the cost of the latter is set by the Government.
The price of the kWh of Spain 2020 depends on the market in which the client has contracted the supply of electricity or natural gas. Since 2014, the price per kWh of the regulated market or hourly price of electricity is established through the wholesale market (pool). Previously, it was carried out through electricity auctions.
The price of kWh in the free market is set by each company, which purchases energy at the same cost. The customer, who has the ability to decide with which marketer to contract his supply, will be disappointed by the one that offers a cheaper price of electricity.
The price of kWh is cheaper during the spring months, while in summer and winter it becomes more expensive due to a greater demand for supply.
Spain's electricity prices have increased by 50% during the last 10 years. For this reason, it has become one of the European countries in which the electricity bill is most expensive.
In 2009, the energy market liberalization process took place in Spain, which left a regulated market and a free market. The regulated electricity market offers its customers the Voluntary Price for Small Consumer (PVPC) rate.
The price per kWh of the PVPC is established by the wholesale market based on the demand of the electricity supply. This will be different every day and every hour. Thus, electricity will be billed at 24 prices, one for each hour of the day.
The free market price of electricity is established by each marketer, always taking as a reference the price stipulated for the regulated PVPC electricity rate.
The electricity trading companies that operate in the free market offer their customers a wide variety of electricity rates with different prices, conditions and discounts in order to meet the needs of all of them. Thus, the price of electricity on the free market will depend directly on the contracted company.
Fixed price: Fixed price electricity rates are characterized by offering a price of electricity for 24 hours a day, which will also be maintained for 12 months. These types of offers generate security for the user, since the amount of their bills cannot be triggered by variations in the price of energy.
Indexed price: Within the free market, the user can also find the electricity rates with an indexed price. These are offers in which the customer will pay for the electricity consumption the same price that their marketer has paid for the energy in the market.
The electricity rates with indexed price entail the payment of a monthly fee, which the company itself establishes. This must be paid obligatorily on each invoice. Sometimes, a fixed fee is not paid, but a specific extra amount is paid for each kWh consumed.
The price of the kWh of electricity with hourly discrimination varies depending on the period in which the user consumes electricity, and the tariffs with hourly discrimination establish two and up to three periods (peak, valley and supervalle) in which the price of electricity is different.
The Reference Marketers are the only companies that can offer their customers the regulated rate of electricity Voluntary Price to Small Consumer (“Precio Voluntario al Pequeño Consumidor”, or PVPC). The PVPC is also known as the hourly electricity rate. The hourly price of electricity is established daily by the wholesale market and reviewed by the Government.
As noted above, the hourly price of electricity is set based on the supply and demand of electricity at each hour of the day. In this way, customers who have contracted the PVPC will pay the real price of electricity on their electricity bill, that is, the price at which it is sold in the energy market.
The price of electricity today hour by hour will depend on the period in which electricity consumption is made:
| Price | Consumption | Hours |
| High | Maximum demand for electricity |
09:00-18:00h 21:00-22:00h |
| Medium | Average demand for electricity |
06:00-08:00h 19:00-21:00h 23:00-24:00h |
| Economic | Low demand for electricity | 00:00-06:00h |
The billing of user consumption with an hourly electricity rate is made up of 24 daily prices. Therefore, consumers must adapt their consumption habits so that most of their consumption is concentrated in the cheapest hours.
The hourly electricity rate (PVPC) may only be contracted by those clients with a contracted power equal to or less than 10 kW who, in addition, have a digital or smart meter.
All those customers who have contracted the regulated electricity rate will be able to consult the price of tomorrow's electricity on the website of Red Eléctrica de España (REE) from 8:00 p.m. the previous day.
Thus, the consumer can know in advance what will be the hours where the price of electricity is higher, having the possibility of modifying their consumption habits and transferring their consumption to the hours where the price of electricity is cheaper.
Reference Comercializers:
The price of electricity by the hour and the hourly discrimination are not the same rate modality. The night rate (hourly discrimination) can be contracted both in the free market and in the regulated market, while the hourly price of electricity can only be contracted in the regulated market.
For all those customers who have contracted the regulated electricity rate, PVPC, or a free market rate with hourly discrimination, the cheapest hours of electricity are those that comprise the early morning. Thus, from 00:00 to 06:00 hours, the price of electricity will be cheaper.
Knowing the price of electricity today will help the customer to transfer their hours of highest consumption to those in which the price per kWh is cheaper. Of course, it will also help you save on your electricity bill.
Free market companies offer their customers a wide range of electricity rates with different prices, conditions and discounts. The user has total freedom to contract the electricity supply with the cheapest electricity company, always taking his habits and consumption needs as a reference.
When contracting the rate with the cheapest electricity price, the user must take into account a series of aspects such as:
Now that you've learned everything you need to know on Spanish electricity prices, discover what other costs are associated with living in Spain in the guide below: