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When electricity costs zero in the electricity market, why is the bill not free of charge?

The price of electricity can be zero, or even negative, in those hours when it is possible to cover the demand in its entirety with renewable energy.

In the electricity wholesale market, an hourly auction is held which sets the electricity prices for the next 24 hours.

What are the factors that make the price low, zero, or even negative?

There are two main factors:

  • The high volume of renewable energy available. Due to the great development of photovoltaic energy in recent years, in the middle of the day a large amount of energy from solar photovoltaic and wind energy is brought to the market.
  • Demand supplied by renewable energy. In the hours of the day when the electricity demand is somewhat lower and in addition, there is a very significant contribution by renewable energy, the demand can be supplied entirely by clean energies.

It is at these times when the price of the electricity market can reach zero, or even be negative.

 

How  does this zero or negative price influence the free market and the PVPC tariff?

In the case of the  PVPC tariff, the price applied to your electricity consumption is governed by the daily wholesale market, which establishes a price that varies for each hour of the day.

In the case of a tariff in the deregulated market, if you have a fixed-price contract, you are not subject to the volatility of the wholesale market.

And if the price on the market is zero euros or negative, shouldn't the bill be free?

Both customers on the regulated market and those customers on the deregulated market who have a contract indexed to the wholesale market will see reductions in their bills. However, it will not become zero or negative because the invoice summarizes the price of all the hours consumed in a period, so even if one hour was at zero or negative cost, the other 23 hours of the day will have another designated price.

In addition, the electricity bill includes another series of concepts that continue to be applied and are defined by the Government and by the Spanish Markets and Competition Commission (CNMC).

If you do not know which market you currently belong to, this can be seen in the header on your bill.

 

The peace of mind that you get from fixed-price electricity tariffs

If you contract a fixed price tariff, you will benefit from the stability and predictability it brings to electricity costs. This is especially important for those households and businesses looking to control their budgets without having to worry about daily fluctuations in the electricity market.

Electricity tariffs with a fixed price give you the following:

  • Protection against volatility: Fixed price tariffs protect you from unexpected increases in electricity prices, ensuring that even when market prices are extremely high, your bills remain unchanged.
  •  Simplicity and convenience: If you choose a fixed-price tariff, it simplifies the process of paying your bills, since you always know in advance how much you are going to pay each month, regardless of changes in the electricity market.

Fixed-price tariffs are the ideal solution for those looking to avoid surprises in their electricity bills because they provide an effective tool for financial planning and managing the risks associated with the volatility of the electricity market.

If you are not yet a customer of Endesa, we recommend the Conecta tariff, the cheapest fixed-price tariff which will enable you not have to worry about the time when you use your appliances because the price per kWh is always the same. In addition, we offer you a very competitive price in terms of power compared to other electricity tariffs on the free market.

Conecta Tariff, the cheap electricity tariff for your invoice

With the Conecta tariff the price does not change from hour to hour, it is the same throughout the day and all night, 24 hours a day.

Comparison of Electricity and Gas Tariffs

You don't need to adapt to Endesa's tariffs because they adapt to you. If you go to our catalogue you can compare the different tariffs for yourself. Or if you prefer, you can answer a few questions and we will take care of comparing all the different electricity and gas tariffs and then make a customised recommendation.

Do you want to see all our offers?

Spend a minute to find the product which best adapts to you:

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