Neither free electrical energy nor charging for placing on the washer, the keys to the unfavorable pool costs that fear Ribera: “There is a head and a tail” | EUROtoday

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The worth of electrical energy has gone right into a tailspin in Spain. The fall has not been a factor of at some point, but it surely has been this Monday when the forecasts of the Ibrico Energy Market Operator (OMIE) have positioned for the primary time at unfavorable ranges to the wholesale market or pool in Spain. This phenomenon, which had already occurred in different European nations and within the nationwide (intraday) adjustment market, consolidates a pattern that has had the sector on alert for months. Abnormally low costs, round zero, happen at increasingly hours of the day.

The common every day market worth was 20.3 euros per megawatt hour (/MWh) in March, virtually 50% decrease than in February and 77% decrease than in March 2023. The curve has fallen all through Europe, as soon as the uncontrolled electrical energy disaster has been overcome, however Spain and Portugal have begun to indicate a downward pattern. The common of pool in our nation it’s near 69% decrease than that of Germany and 62% decrease than that of France. Portugal, very aligned with the house market, nonetheless, has not but entered unfavorable territory.

The scenario has unleashed all types of rumors, from the truth that residents are going to be paid for consuming electrical energy to the truth that the drop has been attributable to the Iberian exception, a measure that died on December 31, 2023 and that had not been utilized for a 12 months. The paradox of pool Spanish is extra complicated and won’t trigger havoc instantly. Of course, its long-term results give buyers and authorities causes to be on guard as a result of, because the Minister for the Ecological Transition defined this afternoon, Teresa Ribera: “It's good for the consumer, but it has a head and a tail.”

What prompted the autumn?

The OMIE forecast marked costs of -0,01 /MWh between 2:00 p.m. and 5:00 p.m. this Monday. This is an virtually symbolic lower in comparison with the values ​​near zero which were reached in current months, particularly at particular occasions throughout daytime, when all photovoltaic gives converge. To this primary scenario we should add the impact of Storm Nelson, whose heavy rains and gusts of wind have triggered the manufacturing of hydraulic and wind energy, two of the most cost effective applied sciences available on the market. This, added to the truth that at present is a vacation in lots of Autonomous Communities, which interprets into much less electrical energy demand, has led to this collapse in costs.

No free electrical energy or cost to activate the washer

Daily market costs shouldn’t be confused with what the patron in the end pays. The first is sa part of the ultimate billto which we should add different regulated prices reminiscent of prices, tolls or taxes themselves (the VAT on electrical energy returned final month to 21% in comparison with the ten% to which the Government quickly lowered it because of the electrical energy disaster).

Although placing, unfavorable costs are a drop within the ocean. The -0.01 euros per megawatt have occurred in three of the 24 hours of a Monday whose most worth might be 21.43 euros/MWh and whose common worth might be 1.8 euros/MWh. It is just the primary day of the month, so the impression on the month-to-month invoice might be virtually imperceptible, particularly contemplating that in keeping with the evolution of the every day market in 2024 and the longer term worth quotes till the top of the 12 months, the estimated common worth of the Spanish electrical energy market is 55 /MWh37% decrease than in 2023, in keeping with the newest barometer of the Association of Large Energy Consumption Companies (AEGE).

Will it impression extra on the free market or the regulated one?

For those that are within the free market, that’s, who’ve agreed on a set fee with their advertising firm, the collapse of the pool not impression your receipt in any respect. For those that are coated by the regulated fee or Voluntary Price for Small Consumers (PVPC), the impact might be minimal.

In January the new methodology of calculating the PVPC, a reform promoted by the Ministry for the Ecological Transition to scale back the volatility that had residents within the regulated market in suspense. Paradoxically, this reform now implies that unfavorable costs can have even much less impression on the patron's pocket than they’d have had with the earlier mannequin, though, in any case, the impact would have been very restricted. This is as a result of the brand new mannequin lowered the load of the every day worth within the remaining calculation of the receipt, indexing the bill to the futures market to offer it with larger stability.

Are power firms promoting at a loss?

No. The reality is that unfavorable costs within the pool point out that There are producers paying to generate power, however this doesn’t indicate that they’re promoting it at a loss. Different consultants consulted by this newspaper agree on the analysis. The producers which can be providing their power at unfavorable costs are, for essentially the most half, photovoltaic vegetation that also benefit from the primacy regime, that’s, they obtain a regulated remuneration for what they produce, the so-called Recore. As this remuneration doesn’t take into consideration the value at which they’re offered, however quite the amount of electrical energy offered, it’s worthwhile for the photo voltaic vegetation beneath this regime to supply at costs under zero within the present situations of renewable oversupply, in an effort to enter the market by displacing different rivals who can’t decrease their costs a lot. Afterwards, they accumulate the premium.

The electrical… Always wins?

As the massive electrical energy firms recalled when the Government tried to intervene of their costs within the hardest moments of the power disaster, round 80% of the power generated by the sector's giants is already offered prematurely at mounted costs. These ahead agreements or PPAs are a defend for these firms, however there are caveats. Some PPAs embody clauses that enable the consumer break the settlement and purchase the electrical energy available on the market when the pool is in unfavorablein keeping with trade sources.

This collapse of the wholesale market, if repeated repeatedly over time, may find yourself having an impression within the medium and long run on the enterprise of huge and small electrical energy firms, since it’s an irregular situation that generates lots of uncertainty in each the vendor and the vendor. as within the purchaser. “If now the PPAs are being signed around 40 euros/MWh, when they are renegotiated for a large industrial company it will be very difficult to justify to its investors the renewal of a contract at those prices when the market is marking negative or close values. to zero at many hours of the day,” explains a supply. In quick, the value curve may find yourself hindering ahead contracting.

Does it additionally occur in Europe?

The sources consulted guarantee that electrical energy episodes at unfavorable costs have already occurred in different European nations, reminiscent of Germany or Holland. This phenomenon of costs tending in the direction of zero due to an enormous entry of renewables attracts what is understood amongst technicians because the duck curve and bending it’s a key battle to make sure the profitability of renewable investments.

This is the cross to which Vice President Ribera has referred. “What we have been seeing in recent months and weeks is how the percentage of renewable electricity continues to grow in our country, with average prices much lower and, at certain times, extraordinarily low. This is good for consumers, but We also (…) need a very significant investment sustained over time to complete this transformation of our energy system. And zero prices, if they occur too often, They do not leave margin or disrupt investment plans and recovery of the investment that investors have,” the minister identified.