Spain was the EU country where the price of electricity dropped the most between January and June 2023, 41% cheaper than in 2022

Spain was the country where the price of electricity in households fell the most in the first half of 2023 in the EU compared to the first half of 2022, also with a much steeper drop than that recorded in the only other four Member States that saw the cost of electricity reduce. According to what Eurostat published this Thursday, between January and June, electricity was 41% cheaper than in the same period of the previous year, when the Russian attack on Ukraine in February 2022 ended unleashing the energy crisis in the EU, which is beginning to emerge thanks to the “stabilization” that the EU Statistics Office detects in the price of gas. This factor is what also influenced the lower price of electricity in Spain in the first half of the year, given that the instrument to limit it, the Iberian mechanism, has not been activated again since February.

According to Eurostat, Spain was one of the few EU countries that was saved from a rise in the price of electricity between January and June that affected 22 of its 27 countries and that in the case of the Netherlands led to an increase of 953 %. Other countries with strong price increases were Lithuania (+88%), Romania (+77%) and Latvia (+74%).

On the contrary, in Spain it fell 41% compared to the first half of 2022. It also did so, although to a much lesser extent, in Denmark (-16%), Portugal (-6%), Malta (-3%) and Luxembourg (-0.4%).

Despite the sharp drop, Spain is not among the EU countries where electricity prices for homes were lowest. Nor where it was most expensive. It was cheaper in Bulgaria (11.4 euros per 100kWh), Hungary (11.6 euros) and Malta (12.6 euros). Households paid the most expensive electricity in the Netherlands (47.5 euros per 100 kWh), Romania (42 euros) and Germany (41.3 euros).

The rise in gas prices in the first half of the year was also widespread, something that happened in 20 of the 24 member states that provided data, including Spain, which appears in the range of countries in which it rose between 15 and 40 %.

Consequently, statistics indicate that in the first half of the year the price of energy for households continued to grow in the EU compared to the same period in 2022.. Electricity marked 28.9 euros per 100 kWh compared to 25.3 euros a year before and gas, 11.9 euros per 100 kWh compared to 8.6 euros.

Withdrawal of aid and price increase

To try to explain the behavior of EU electricity prices, Eurostat refers first to the “stabilization” of the price of electricity and gas after the 2022 crisis, when they reached “the highest recorded by Eurostat.” , due to the drop in imports from Russia. Also to the implementation of “mechanisms to relieve pressure on consumers”, including subsidies.

Thanks to them, the weight of taxes on electricity bills fell from 23% to 19% between the first half of 2022 and 2023 and from 27% to 19% on gas bills and Eurostat explains that in the In the first half of 2023, electricity would generally be more expensive for families than in 2022 precisely due to the withdrawal of this aid.

Just at a time when the European Commission is asking EU countries to withdraw their support measures and in Spain the government is studying it for next year, Eurostat detects that after the increase of almost 1,000% of electricity price in the Netherlands is due to “the 2022 relief measures did not continue in 2023” and that, “at the same time, household electricity taxes doubled.”

Iberian mechanism

What Eurostat does not comment on is another of the “mechanisms” that some countries put in place, in this case Spain and Portugal, to put a price cap on gas that would limit the price of electricity generated with other technologies.. The so-called Iberian mechanism began to be applied in June 2022 and managed to contain the price of electricity in these two countries during the worst moments of the energy crisis, but starting in October of last year there began to be days when it did not have to be activated. , because the price of gas did not reach the maximum threshold set.

This has been a constant since last February, since the cap has not been activated again, so that the sharp drop in the price of electricity in Spain occurred for two months with the Iberian mechanism but also for four in the that was not active. Furthermore, in Portugal, where it is also applied, the price of electricity also fell, but less than in Spain, only 6%.

Even so, the machinery has started moving again in Brussels and Madrid in view of a possible new extension of the cap on the price of gas. The European Commission is studying the possibility due to the geopolitical turbulence that the crisis in the Middle East has added to the war in Ukraine and the Spanish Government has already made it clear that it will fight for an extension beyond the date on which, if not, It will expire on December 31.

In an appearance this Wednesday before the European Parliament, the third vice president, Teresa Ribera, was in favor of maintaining it “until it is necessary”. This Thursday in Ponferrada, she has gone further and has assured that she will defend another extension of the Iberian mechanism and the rest of the emergency measures – savings in gas and electricity consumption, for example – as president of the EU Energy Council , where the final decision will be made. “I anticipate that the proposal of the EU Presidency is favorable to maintaining the measures,” he said, as a way of having them “in case they are needed, hopefully not”, as has happened since February with the Iberian mechanism or with the mandatory reduction of gas and electricity consumption that has never had to be activated. On the contrary, and as Eurostat shows this Thursday, the consumption of both began an upward trend in 2021 that has not yet begun to decline.