May 12, 2021
Released 12.05.2021

Annus horribilis: the most expensive electricity in history will be seen in the next 12 months.

January. 2021 begins with tropical storm Filomena. Gas prices trigger increases in electricity markets. Spain lives in a two-week nightmare with the most expensive electricity up to that date. The last 10 days of the month see a bit of change in the tendency and the month of January is closed with 61€/MWh.

April. The prices of gas and CO2 seem to rise to no end and turns the cost of electricity into the highest recorded price of any April in all history. The pool closes above 65€/MWh.

Please note the average price given for each month. It is important.

Now May 10, 2021. This date is important as it is a historical day for the energy futures market in Spain and Portugal. Electricity prices for the next 12 months will be the most expensive we have ever seen. In other words, the Annus Horribilis awaits us in the wholesale electricity market.

Take a look at these future electricity price charts:

We start with the monthly graph. Today in the energy markets you are able to buy energy for up to 2031, but you can also do it for the next weeks, months or quarters.

OMIP, a Regulated Market operator that provides, together with the OMIClear Clearing House, a trading platform for energy products to the market, provides data that confirms that the energy futures market in Spain will be even more expensive from June to November 2021 than what we have seen in April 2021.

For example, a price of 75.25€/MWh is forecast in June after rising 2.25€/MWh in only one day. The most expensive electricity of the year is scheduled for July. It is usually a month with little wind and therefore combined cycles come into play, making the price go to almost 78€/MWh. August above 75, September and November again above 77€/MWh. Only October is saved a little with 69.95€/MWh. All of them well above April’s prices.

And to this we must add the new rates that arrive on June 1, which will already make Spanish bills more expensive. The perfect cocktail for consumers covered by PVPC or regulated tariffs.

According to the OMIP graph, the average price for the third quarter will be 76.90€/MWh, that is, more than 15€/MWh than January’s price. But the end of the year is also expected to be very high and it could get worse, if it is too cold and the demand rises during November or December.

The signal is unequivocal. Future prices do not stop rising and everything indicates that they will continue to do so.

The figure that really gives goose bumps is the yearly data. They are known as CALs. According to the information for 2022, the average price for the whole of next year will be 63.50€/MWh. Two days ago the average price of a whole year rose 2.60€/MWh, a real outrage.

To see what is happening it is important to analyse the following graph:

Look at the dates. Just a month ago, on April 12, the price was around 53€/MWh. Today it stands at 63.50€/MWh as mentioned before. A month ago a marketer could have bought electricity 10€/MWh cheaper than today. What is happening in the energy markets is proper madness.

In short, Spanish energy consumers have a big problem. In fact, all Europeans, who will pay out of their pockets for the carbon tax that makes electricity more expensive in all markets. France and Germany expect to have a better third quarter than Spain, but both the fourth quarter of 2021 and the first of 2022, prices are expected to rise in France and Germany, even reaching and exceeding 80€/MWh.

Let’s see if Spain manages not to get infected. We will see it in the next few days.

(Source: Article released on 11th May 2021 in El Periodico de la Energia)

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  1. Cannot believe these excessive electricity prices!!

  2. Outrageous why are they so high.

  3. Spain doing its damndest to scare everyone away

  4. Ridiculous what we pay here. I was paying a lot less per month back in the Uk, and look at the weather there..

  5. I am looking for a cheaper electric company currently with iberdrola

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