Why electricity prices increase
The price of electricity goes up when any of these three things happens:
A) There is less supply of cheap energy.
B) There is a greater demand because people are consuming more.
C) A + B
The result is that there are hours of the day when energy is more expensive and also times of the year when the clearest trend is upwards.
On the demand side, over the course of the day there are two periods of heavy electricity consumption. In winter, the first peak period usually occurs between 11 a.m. and 1 p.m. when there is a high level of activity in companies, shops and homes (daily tasks, food preparation, etc.). The second, with prices generally higher in winter, occurs between 7 p.m. and 9 p.m. In this case shopping activity combines with people returning home, leading to increased electricity consumption due to routine tasks or leisure activities. The big difference is that in summer the increased energy consumption due to air conditioning and the different working day adopted by many businesses (summer schedule, early start and finish, no lunch break) means that the main peak period is concentrated around noon.
This daily pattern can be increased by certain circumstances. The main one is the weather. Extreme cold or heat, which boosts the use of heating or air conditioning, increases electricity consumption. There are also days of increased consumption due to more activity, as happens at Christmas due to shopping.
But supply is also involved. If less cheap electricity from renewable sources is produced and electricity from thermal or combined cycle sources has to be used, the price of energy goes up. As it does if there is an increase in the price of fuels such as coal (thermal energy) or gas (combined cycle plants).
All this means that at times of greatest demand for energy (cold spells in winter and to a lesser extent, heat waves in summer) and lower production of renewable energy due to lack of wind, the highest energy prices are usually reached.