Despite gas price cap, electricity bills in Spain rise faster than in Germany, France

By Alyssa McMurtry

OVIEDO, Spain (AA)- Despite major interventions in Spain’s electricity markets, including a cap on the price of gas, Spanish consumers are seeing their monthly electricity bills increase faster than many of their European peers.

In August, average electricity bills were up 60.6% compared to the year prior in Spain, according to Harmonized Index of Consumer Prices (HICP) data from Eurostat.

In Germany, in contrast, which has been heavily reliant on Russian gas, average electricity bills had only climbed 16.6% in the same period.

France, which has suffered prolonged shutdowns of its nuclear reactors due to a lack of water for cooling and maintenance issues, has also protected its consumers from dramatic electricity bill increases. There, prices only rose 7.7%.

Across the EU, there are dramatic differences in how much bills have risen over the last 12 months, with the average annual increase sitting at 35.7%.

In Malta, for instance, consumers have not had to pay any extra for electricity bills. In Estonia, the worst-hit country, prices have increased by 205.9%.

The Netherlands, Italy and Latvia have also seen bill increases of more than 100%.

Meanwhile, consumers in Hungary, Poland, Serbia, Switzerland, Bulgaria and Luxemburg have seen bills increase by less than 6%.

This data considers prices paid, including taxes, by final consumers.

Although Spain enacted a price cap on natural gas in June that has brought down wholesale electricity prices well below those of countries like France or Germany, consumers are still exposed to dramatic fluctuations in the electricity market.

“Although the gas price cap has pulled the breaks on a much higher price increase, it is absolutely insufficient to end the brutal speculation in the sector,” said Spanish consumer organization FACUA.

In August, the average electricity bill in Spain was €158. That’s the second-most expensive month on record, only after March 2022, when the war broke out in Ukraine.

FACUA urges the Spanish government to push the European Commission to “radically change” the marginalist system “since it makes consumers pay for cheaper energies at the price of the most expensive ones.”

This summer, Spain’s government also cut the sales tax on electricity bills from 21% to 5% in a bid to further soften the blow for consumers.

Meanwhile, in neighboring Portugal, which pays the same wholesale prices for electricity as Spain, consumers’ bills are only up 32.1%.

Experts say this is because many more consumers in Spain rely on a regulated market tariff, where prices fluctuate hourly depending on supply and demand.