Spain's regulated PVPC tariff logs 2.5-cent hours and pressures the free market

The regulated market once again goes head-to-head with fixed electricity prices

One kilowatt at €0.02579. Another at €0.02818. And suddenly the afternoon turns and the same regulated market charges €0.16289/kWh between 7 p.m. and 8 p.m. That is the landscape of the PVPC on the most volatile days, according to the hourly prices collected when the issue was raised, and it explains why 'I'm switching to the free market' has stopped sounding like a masterstroke. For months, suppliers' fixed prices —€0.14, €0.145 or €0.16/kWh around the clock— seemed unbeatable against a regulated market soaring above €0.30. Now the tables have turned, but only in some time slots and only on some days.

The day the PVPC stopped being scary

The hourly breakdown is hard to believe for anyone who only knows the traditional tariff. Eleven in the morning at €0.11636/kWh and then midday collapses: €0.02821, €0.02818, €0.0282, €0.02579, €0.02642. Between 3 p.m. and 4 p.m., the regulated market price settles at a level that, taxes aside, is barely distinguishable from zero.

The fine print arrives at nightfall. The 6 p.m. to 7 p.m. slot climbs to €0.04503/kWh and the 7 p.m. to 8 p.m. slot shoots up to €0.16289. None of that is new to anyone who checks the app every morning. What is new is the comparison: on another day, 9-4, no hourly slot fell below €0.23568/kWh and nighttime prices exceeded €0.36. From one day to the next, the same system can go from giving away kilowatts at midday to charging a fortune for them at night.

Averages are misleading too. One day can show an average just 3% higher than the previous one and still be worse for your pocket: it is enough for the cheap hours to fall in the early morning, when almost no one turns anything on, and for the peak to land right when people cook and turn on the heating. The system rewards those who can shift the laundry; it punishes those who get home and switch things on without looking.

Why the free market won for so long

With those numbers on the table, half of Spain signed fixed tariffs that today sound like a steal. One case sums it up: €0.145/kWh —€0.1595 including VAT— locked in on February 1, with Iberdrola, for two years and with annual consumption of between 4,000 and 4,500 kWh, in an all-electric home. Others closed €0.12 for three years. And some found 14 cents in a 30-second search, via an online tariff.

The appeal was obvious: a stable price and no homework. By contrast, the regulated tariff forces you to watch the clock, schedule the washing machine and pray that the peak does not coincide with dinner. The dominant narrative long ago established that the free market was the future and the regulated tariff a leftover from another era. With today's data on the table, that diagnosis has become much more uncomfortable: those who signed in time sleep easy, while those looking for a tariff now no longer find the same thing.

Can you return to the PVPC after switching to the free market?

Yes, as long as one size condition is met: contracted capacity must be below 10 kW. There is no time lock or penalty for the return, although redoing the switch has its own procedure.

The obstacle is not administrative; it is about expectations. Anyone returning to the regulated tariff accepts a price that changes every hour and that at peak times can far exceed what they paid on a fixed tariff. Returning makes sense for flexible consumption: electric vehicles, heat pumps, home automation that shifts loads to off-peak hours. For a flat with a fridge and little else, the calculation narrows and the convenience of a flat price weighs heavily.

The bill no one understands: 720 multiplications and an average

The PVPC is billed using the actual readings that the distributor makes available to the supplier. If the meter is remotely managed and integrated into the grid, the bill is calculated hour by hour. If it is not, consumption profiles published by Red Eléctrica are applied based on criteria set by the Ministry.

That is where the mess appears. A meter gives 24 readings a day. A month, more than seven hundred. The logical thing would be to multiply each one by the cost for its hour. The reality, some argue, is that suppliers like Curenergia apply averages and present the result as a single price, and the detailed breakdown is nowhere to be seen. The distributor publishes consumption in a downloadable format; the multiplication that turns it into euros is another story.

The gas cap that has yet to arrive and the shadow of the deficit

In parallel, Spain's Council of Ministers delayed by a week the capping of the gas price. Deputy Prime Minister and Minister for Ecological Transition Teresa Ribera attributed it to the previous day being a holiday in Madrid. While waiting for the cap, some analyses warn of a side effect: if power companies lose customers on free-market contracts to the PVPC, the tariff deficit (energy tariff shortfall) could become a hole that someone will have to plug later.

Meanwhile, the old suspicion remains alive: the bill carries more than thirty euros in fixed charges even if not a single light bulb is switched on, and those who move in time do so because they can afford to watch the market. It is not a cheap system, they say. It only changes who pays the difference.

The PVPC gains hours, loses early mornings and rewards those who can shift the laundry. How long must it hold up like this before returning to the regulated tariff stops seeming like an oddity?