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Who benefits from the rise in electricity prices?

The rises and falls in the price of energy do not affect all consumers equally. The same goes for those who most benefit from this situation. We're going to tell you who's who.

Who benefits from the rise in electricity prices?

The changes in electricity prices is a complex story. And, like any story, it has its characters. In this case, the price of gas is the main protagonist, since it is the main reason why the price of electricity has skyrocketed in the last few months.

Despite this, there is a tendency to assume that there are other characters who are benefiting from the situation. But that's not entirely true. So what's going on? Who wins from this increase? Let's take a look at those involved.

 

Who are affected?

When talking about the price increase in your electricity bill, we need to clarify some details. First of all, this does not affect everyone equally. Most domestic customers and SMEs in Spain have contracts in the free market. This totally or almost totally isolates them from the prices of the wholesale market, which is the one that has really suffered from this escalation.

Meanwhile, customers with regulated tariff contracts are the ones who suffer from the increases. We are the only European country in which the price set by the wholesale market is transferred to customers with a PVPC (Voluntary Price for Small Consumers) tariff, so they are affected by price changes in the daily market.

Customers in Spain (domestic and SMEs)

Free market
16
millions of free market customers.
Regulated market
10,5
millions of regulated market customers.

It is important to clarify that, in the case of changes to the wholesale price, people are comparing the cheapest year (2020) with the most expensive (2021). However, when people talk about tourism they compare the figures with 2019, which was the pre-pandemic year, and the same should also be done in the energy sector.

 

Who are the beneficiaries?

To find out who is benefiting the most from this situation, we must first know the variables that affect the price of energy. These are mainly the price of gas and CO22 emission rights.

That said, those who are benefiting the most are the countries and operators that control the global extraction and distribution of raw materials such as gas or oil. Not the electric companies that, in the end, are also users of these raw materials.

"The countries and operators that control the extraction and distribution of raw materials such as gas benefit the most from the rise in prices".

In addition, we sell much more energy than we produce, so we also have to buy it from the market. And not only that; we have sold energy to our free market customers at a price that was agreed a year or two ago, while we are currently buying that more expensive energy.

There is a lot of talk about the high profits made by electricity companies, such as Endesa. Nevertheless, we have reduced our profit margin since the price crisis began. Despite this, we are one of the companies that invest the most in Spain. Between 2022-2030 alone we will be investing 31 billion euros to boost renewable energies, digitise distribution networks and offer the best service to our customers.

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