The price of electrical energy
In the following article we will talk about the current increase in the price of electricity and how Renewable Energy (EERR) can contribute to reducing that price.
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Background
Almost twenty years ago, back in early 2002 the price of electricity broke all its records To date, reaching the figure of more than €100/MWh. Currently, in the summer of 2021, the current price of electricity does nothing more than grow and grow linearly and continuously. Last July the price was around €106-107, at the end of August the figure is around €120/MWh and it seems to have not yet reached the ceiling. What is the reason for this continued increase in the price of electricity? Without a doubt, the main reason is demand.
We are experiencing some of the warmest summers in recent years, a progression that continues to increase year after year, making the effects of climate change palpable. When we meet these more “extreme” climates (both in summer and winter) consumers need more energy to cool or heat, which produces specific energy needs that are difficult to satisfy.
The clear example of this season is last heat wave due to a mass of hot African air that has remained over the Iberian Peninsula for a week, increasing causing the mercury to rise to 47 degrees in many places.
Spain is one of the countries of the European Union in which electricity is most expensive, along with Italy, Portugal or France, making Spain the most expensive of all.
The Gas Market
Another factor that contributes to the increase in the cost of electric power is the price of gas (around €37.5/MWh) and its exploitation rights.
Energy is auctioned and purchased daily, depending on the estimate of energy needed. Those that are purchased in the first instance are the most economical and that generate the least emissions (this is where the EERR and nuclear energy). The main problem is that these clean energy sources are not always enough to satisfy all demand.
To all this we must add that CO2 emissions have an added tax, as well as some rights that are on the rise because the European Union wants to reduce emissions in some way, thus penalizing their sale. If these taxes were eliminated, energy would be cheaper, but there would be more demand for non-renewable energy.
It is estimated that in 2021 European gas consumption has increased by 25%, making European gas reserves 30% emptier than a year ago.
Solutions
The political burden regarding the price of electricity has always been considerable, with sources saying that the government cannot have margin regarding the price of electricity and others stating the opposite.
The measures currently taken have been lower the Value Added Tax (VAT) from 21 to 10% and eliminate the 7% tax on generation.
With the energy cost situation, it happens that you end up paying a established cost the same for all types of energy. That is, without taking into account that the contribution by Renewable energy be higher or lower, causing that, if a country buys gas, the price of all energy increases, not just gas. One solution would be the reform of the energy sector and market.
Energy production involves a series of costs, some fixed and others variable. The latter are what make the difference in price, and Renewable Energies enter the market at almost zero cost because they hardly have these variable costs, since they do not have to be imported from other countries and they do not depend on the price of oil, in addition to having a natural and unlimited origin.
The more renewable energy capacity we are able to produce, the more the total price of energy is reduced. If more energy from renewable sources were produced, it would end up displacing the purchase needs of non-renewable energy, thus achieving a double objective; have quality energy at a lower cost and reduce emissions of polluting gases that are harmful to health and the atmosphere.
As a summary: the final cost of the domestic electricity bill is dependent on 3 factors; the regulated costs in the market, the cost of generation and taxes (national and international).
The Wind power It is presented as a very interesting alternative to fossil energies that use gas as raw material. Unlike gas, the cost of wind unlike gas is €0, it is a free and unlimited resource, and located in more than 90% of the earth's surface with greater or lesser intensity.
Furthermore, it has the advantage That is because its production can offer more energy at a lower cost, which is why it displaces the cost of other more expensive fuels. At the end of each month, an average is made of the daily prices and the greater the proportion of wind energy input, the lower the price of the electricity bill, and vice versa.
In the last week, wind energy in Spain has generated 162,173 MWh, which is almost 50% of the daily demand for electrical energy, with a price of €13.17 cents/kWh.
