Spain introduces a new pricing model for its electricity market

The National Commission of Markets and Competition (CNMC) announced a new pricing model based on hourly peak and off-peak time bands for Spanish electricity consumers. The new model, which came into effect on June 1, aims to enhance efficient residential electricity consumption towards off-peak hours. The implementation of the new price model resulted in a new by-default PVPC tariff (2.0 TD), which replaced the 3 existing tariffs (the regular tariff 2.0 A, the two-zone tariff 2.0 DHA and the three-zone tariff 2.0 DHS), and set 3 different hourly price bands:  

• Valley hours (reduced price) – Monday to Friday from midnight to 08:00 and during weekends and holidays

• Flat hours (intermediate price) – Monday to Friday from 08:00 to 10:00, 14:00 to 18:00 and 22:00 to midnight

• Peak hours (expensive price) – Monday to Friday from 10:00 to 14:00 and 18:00 to 22:00

Additionally, consumers with contracted power of up to 15kW are free to choose different contracted powers, one for the duration of valley hours and one for the rest of the day, in order to further reduce their annual bills up to 200-300 €. According to CNMC, the new tariff model was introduced to lower consumers’ electricity bills through efficient consumption during hours of lower electricity demand, however almost 1/3 of residential consumers that were already on zone tariffs are expected to see their bills increase.

Finally, free market players are given the possibility either to adjust their contract prices according to the new model or to retain customers’ agreed contract types and transfer the cost difference to the existing price.

Author: Ioannis Korras, Energy Market Analyst

Sources:

[1] CNMC: “La nueva factura de la luz”

[2] Tarifasgasluz: “Nueva tarifa eléctrica 2021: peaje 2.0TD y nuevos periodos horarios”, 15.6.2021