What is happening to electricity prices?
The complicated international situation has seen gas prices rise. Gas, which is essential in generating electricity, is also increasing the price of electricity.
What is the gas price cap?
The cap on the price of gas is a temporary measure put in place by the government (Royal Decree-Law 10/2022) with the objective of containing electricity prices by setting a maximum benchmark price for natural gas used in electricity generation.
It is not a rebate or a discount: it is a "ceiling".
Although we talk about gas, it only affects electricity bills (as it applies to gas used in generating electricity).
When will the gas price cap be applied and for how long?
It is an urgent, temporary measure, which has been applicable since 15 June 2022 and will continue until a decision is made to cancel it (at the latest, 31 May 2023).
What is the amount for the gas cap and how is it calculated?
The cost of the cap on gas prices is variable for each hour of the day and very unpredictable, because it depends on the market price for natural gas, its impact on the electricity market and how we consume.
The amount in your bill is the result of multiplying your consumption by the cost of the gas price cap in €/kWh.
For an average customer, the cost of the cap on gas prices was between €2.21 and €18.38 for the month of October*.
* Average electricity consumption per household published by the IDAE (annual consumption of 3,487 kWh).
Is the gas price cap bringing electricity prices down?
As a measure for containing the price of electricity, it is partially working. Prices are lower than they were a few months ago, although they have not returned to last year's levels.
There is a difference between the real price of gas in the international market and the price of "capped" gas in Spain. This difference between real price and "capped" price is being financed by all electricity consumers and appears in their bills.
Where does the cap on the gas price appear on the bill?
If you have a contract with a Deregulated Market retailer, this only applies to the mainland and is clearly broken down on your bill.
There are two different concepts, but you will only see one of them on your bill:
- A lower cost, which applies to all customers and destined for the Spanish Electricity Grid (REE). You will see it on your bill under the name "Maximum cost of gas RDL10/2022 REE".
- Another for a more significant amount, related to the Market Operator (OMIE). You will see it on your bill under the name "Maximum cost of gas RDL10/2022". This only applies to contracts after 24 April 2022 or if the following occurs during the dates when the regulation is applicable:
- You change your tariff or retailer.
- The price of your contract is modified.
- Your contract comes up for renewal.
Summary: If you are with a deregulated market retailer and you have not seen the additional OMIE amount (Maximum cost of gas RDL10/2022) on your bill, we recommend that you do not change anything. This way you will avoid incurring this cost before it is necessary. If you change retailer, you will assume the highest cost.
Endesa is offering special discounts of up to 20%
At a time of additional costs and market volatility, Endesa is the answer. If you are looking for savings and peace of mind, Endesa can offer you a special discount of 20% on the energy term.