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The key to understanding why the price of energy has increased so much

CO2 emission rights and high demand for gas are just some of the factors that directly influence the price of energy and, therefore, the electricity bill. We will explain the key to understanding why it has increased so much.

The price of energy, which accounts for approximately a third of our electricity bill, suffers every day the ups and downs caused by factors such as the price of gas and CO2 emission rights. We will explain how to prevent variations in these prices from affecting your bill. 

Variations in the price of energy caused by factors such as the price of gas or CO2 affect what you pay on your electricity bill depending on the type of tariff you have contracted.

In Spain there are two types of markets: Both share access tariffs and taxes, but they are different in the price charged for producing electricity. So you need to know which market you are in the regulated or the free market.

Although it may seem incredible, according to data published by the CNMC (Spanish Markets and Competition Commission), 40% of people in Spain do not know what electricity tariff they have contracted. To know in which electricity market your tariff has been contracted you need to look in the header on your electricity bill.


Take note of the time bands in the PVPC

The regulated market includes a unique tariff known as PVPC (Voluntary Prior to the Small Consumer). In this tariff, the price of electricity varies every day and every hour, depending on the price of energy and the time period where you consume it. Also, there is no minimum duration for the regulated tariff and it can only be contracted if you have less than 10 kWh of power.

So if your tariff lies within this type of market, to control your electricity bill you will have to pay attention to the time bands, since these may affect what you end up paying on your bill. There are currently three time bands: Off-peak hours, standard hours and peak hours.

  • Off peak hours. These are the cheapest hours. They go from 12 midnight to 8am on weekdays and all through the day at weekends and on public holidays.
  • Standard hours. These are when the price is moderate. They go from 8am to 10am; from 2pm to 6pm and from 10pm to 12 midnight.
  • Peak Hours. These are the most expensive hours. They apply from Monday to Friday (not public holidays) and go from 10am to 2pm and from 6pm to 10pm.

The key is to consume in off-peak hours, when the price is lower. This type of tariff is a good option for those households able to concentrate at least a third of their consumption at that time. The regulated tariff is also affected by market prices.

However, for those consumers who cannot adapt to the new time bands or their current situation does not allow it, and do not want to be exposed to the fluctuations of the price of energy, there is another solution so that their bill does not change monthly in accordance with the price of electricity: Free market tariffs.


Fixed price: The key to overcoming increases in the price of electricity

The main advantage of the free market is that, as the name suggests, tariffs are established freely so the kWh costs what you agree with the retailer and is included in the contract. For the consumer, prices are much more stable, since they are not subject to changes. That is, customers can forget about periods, time bands and daily price quotes. This "freedom" also allows different discounts to be applied and you can even combine supplies such as electricity and gas.

The best thing about this type of tariff is that customers know in advance what they are going to pay. As there is freedom of tariffs, you can choose the offer that best suits your consumption style.

Currently, all customers who decide to switch to Endesa have a fixed and guaranteed price for 1 year. Our range of tariffs also has other advantages such as no minimum duration or time band restriction and there are savings with regard to the PVPC. 

Within the free market, Endesa has a wide range of tariffs adapted to the needs of each client and their payment preferences in order to offer security and peace of mind, whatever the needs and preferences of the consumer. Our offer features a tariff that has been improved with the aim of Única helping our customers to cope with these changes in the market.

Now, customers who opt for the Endesa Única Tariff will be able to enjoy a personalised flat rate calculated on the basis of a fixed energy price of 58 euros per MWh and which remains unchanged for two years. This provides an alternative that enables the alleviation of the negative effects that increases in the price of energy have on the bill for those consumers covered by the PVPC, whilst providing a new opportunity for those wishing to make a new contract in this market.

Although Única is one of the most outstanding tariffs, they all maintain a fixed and guaranteed price, at least during the first year of contracting and do not have a minimum duration clause. 

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