Spain's PVPC electricity tariff drops from record high to historic low
Spain's regulated hourly electricity price (PVPC) fell from a peak of €0.176/kWh to a minimum of €0.015/kWh, highlighting market volatility.
English · Original discussion in Spanish · Published
Hourly Electricity Prices: From €0.176/kWh Peak to €0.015/kWh Low
Is the PVPC tariff a gamble or the cheapest way to pay for electricity? This question arises in many households, and tracking prices hour by hour yields an uncomfortable answer: one can escape volatility but must give up the cheapest time slots. The tracking began with a record. At peak hours, the general tariff reached €0.176/kWh, the night rate hit €0.195/kWh, and electric vehicle charging was also at €0.195/kWh at 8 PM, while the first hour of the day saw general consumption at €0.158/kWh.
The striking aspect was not the peak itself, but its persistence. Even when demand dropped over weekends, prices barely moved. "Electricity prices fell 10.2% today. When they rise, there is alarm; when they fall, silence," noted a TV economist on social media. The counter-argument was quick: we had months of nearly free minimums, yet no news program covered it.
Hour-by-Hour Cost of PVPC Electricity
Daily price tables became the central tool for monitoring. Each day publishes three columns—general, night, and electric vehicle rates—reflecting wholesale costs plus tolls. In February 2017, figures were at highs: €0.171/kWh at 8 AM and €0.174/kWh at 7 PM. Weeks later, in March 2017, the general tariff dropped to the range of €0.083 to €0.112/kWh. Same mechanism, opposite results.
This fluctuation revived an old debate: if the tariff is indexed, why is it perceived as a permanent increase? Defenders note that PVPC passes through wholesale market prices with almost no margin. Critics argue that consumers cannot plan effectively and that every price hike hits the bill without warning.
PVPC Is Not Expensive or Cheap: It Is Indexed
A recurring argument in this analysis is that PVPC, launched in 2014, has always been volatile, and alternatives exist for those who dislike fluctuations. Historical comparison helps. Under the former TUR system, a June 2013 bill without time-of-use pricing set the kWh at €0.138658. That same year, with time-of-use pricing, peak hours were €0.172148 and valley hours €0.059420. With PVPC, June 2016 left peaks at €0.104878 and valleys at €0.038906. For those comparing, these are lows.
The commercial margin of PVPC is key to the entire system: €3.11/kW-year and €0.002/kWh, according to technical analysis. With 3.45 kW contracted and 2,000 kWh annually, the reference supplier earns about €15 per year before taxes. Such a customer does not cover costs, which is the underlying reason for attempts to dismantle the regulated tariff.
Group Buying That Saves Nothing
Midway through the analysis, group energy buying emerged, presented as a volume-based savings route. The assessment is harsh: selling by volume adds nothing for a producer if below the pool price, where all energy can be sold; if above, customers lose compared to indexed tariffs. Those contracting PVPC already participate in aggregated buying from millions of users without intermediaries.
The prevailing suspicion is different: group buying serves mainly to collect personal data and run advertising campaigns. Memories of previous operations—one year won by one supplier, the next by another—with no appreciable savings reinforce this view.
From Record to Minimum in Twelve Months
Subsequent developments debunk any catastrophic narrative. If in January 2017 the cheap band hovered around €0.10/kWh, a year later the general tariff peine at €0.084/kWh at midnight and dropped to €0.067/kWh at dawn. In March 2018, some days saw valley hours at €0.018/kWh. The latest tracking record leaves the general tariff at €0.062/kWh and the night rate at €0.015/kWh.
Reservoir water levels also matter. On February 28, 2017, dams held 32,463 hm³, 57.99% of capacity, versus 37,586 hm³ the previous year, with drought squeezing hydro generation. When it rains and winds blow—even in France—prices plummet. When they don't, prices rise. That is how the market works.
With such swings, one might think the system is broken. Or that it functions exactly as designed, which is even more unsettling.
Is the PVPC tariff a gamble or the cheapest way to pay for electricity? This question arises in many households, and tracking prices hour by hour yields an uncomfortable answer: one can escape volatility but must give up the cheapest time slots. The tracking began with a record. At peak hours, the general tariff reached €0.176/kWh, the night rate hit €0.195/kWh, and electric vehicle charging was also at €0.195/kWh at 8 PM, while the first hour of the day saw general consumption at €0.158/kWh.
The striking aspect was not the peak itself, but its persistence. Even when demand dropped over weekends, prices barely moved. "Electricity prices fell 10.2% today. When they rise, there is alarm; when they fall, silence," noted a TV economist on social media. The counter-argument was quick: we had months of nearly free minimums, yet no news program covered it.
Hour-by-Hour Cost of PVPC Electricity
Daily price tables became the central tool for monitoring. Each day publishes three columns—general, night, and electric vehicle rates—reflecting wholesale costs plus tolls. In February 2017, figures were at highs: €0.171/kWh at 8 AM and €0.174/kWh at 7 PM. Weeks later, in March 2017, the general tariff dropped to the range of €0.083 to €0.112/kWh. Same mechanism, opposite results.
This fluctuation revived an old debate: if the tariff is indexed, why is it perceived as a permanent increase? Defenders note that PVPC passes through wholesale market prices with almost no margin. Critics argue that consumers cannot plan effectively and that every price hike hits the bill without warning.
PVPC Is Not Expensive or Cheap: It Is Indexed
A recurring argument in this analysis is that PVPC, launched in 2014, has always been volatile, and alternatives exist for those who dislike fluctuations. Historical comparison helps. Under the former TUR system, a June 2013 bill without time-of-use pricing set the kWh at €0.138658. That same year, with time-of-use pricing, peak hours were €0.172148 and valley hours €0.059420. With PVPC, June 2016 left peaks at €0.104878 and valleys at €0.038906. For those comparing, these are lows.
The commercial margin of PVPC is key to the entire system: €3.11/kW-year and €0.002/kWh, according to technical analysis. With 3.45 kW contracted and 2,000 kWh annually, the reference supplier earns about €15 per year before taxes. Such a customer does not cover costs, which is the underlying reason for attempts to dismantle the regulated tariff.
Group Buying That Saves Nothing
Midway through the analysis, group energy buying emerged, presented as a volume-based savings route. The assessment is harsh: selling by volume adds nothing for a producer if below the pool price, where all energy can be sold; if above, customers lose compared to indexed tariffs. Those contracting PVPC already participate in aggregated buying from millions of users without intermediaries.
The prevailing suspicion is different: group buying serves mainly to collect personal data and run advertising campaigns. Memories of previous operations—one year won by one supplier, the next by another—with no appreciable savings reinforce this view.
From Record to Minimum in Twelve Months
Subsequent developments debunk any catastrophic narrative. If in January 2017 the cheap band hovered around €0.10/kWh, a year later the general tariff peine at €0.084/kWh at midnight and dropped to €0.067/kWh at dawn. In March 2018, some days saw valley hours at €0.018/kWh. The latest tracking record leaves the general tariff at €0.062/kWh and the night rate at €0.015/kWh.
Reservoir water levels also matter. On February 28, 2017, dams held 32,463 hm³, 57.99% of capacity, versus 37,586 hm³ the previous year, with drought squeezing hydro generation. When it rains and winds blow—even in France—prices plummet. When they don't, prices rise. That is how the market works.
With such swings, one might think the system is broken. Or that it functions exactly as designed, which is even more unsettling.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (151 replies).
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