The power is back! But at a price: electricity costs skyrocket after Spain blackout
Electricity has been restored across almost all of Spain following Monday’s blackout, but wholesale prices have surged by 450 per cent
Millions of people across Spain and neighbouring countries were left without electricity on Monday April 28 after a major blackout hit the national grid. Power was out for almost 24 hours in some areas, with disruptions also reported in Portugal and parts of France.Now, although supply has been restored to 99.9% of the country, wholesale electricity prices have surged in the days that followed.
According to Spain’s electricity market operator OMIE, the average wholesale price rose sharply on Wednesday April 30, reaching €31.87 per megawatt hour (MWh). That’s a 450% increase compared to Tuesday, when it stood at just €5.79 per MWh.
Looking back a month, the rise is even more dramatic. On March 30, prices were as low as €3.03 per MWh. That means the current rate is up by around 950% in just a few weeks.
It has been reported that the price hike is linked to disruptions caused by Monday’s blackout. While the wholesale market price doesn’t directly reflect household electricity bills, a spike of this scale is expected to push up costs — especially for those on regulated tariffs.
Consumers on these variable-rate plans are the most affected, as their bills change with the daily wholesale market. Reports say around 40 per cent of Spanish households are on these types of tariffs, with the other 60 per cent on fixed-rate contracts.
While the overall cost of electricity is still close to what it was in August 2018, it is estimated that the current surge could add several euros per day to bills for households on variable tariffs, particularly during peak evening hours such as between 9pm and 10pm, when prices hit €258.10 per MWh.
On Tuesday, prices had dropped unusually low due to a high level of renewable energy output. However, some experts believe the average may have been understated and that the spike seen on Wednesday could be part of a natural market correction.
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