11 JANUARY 2023
Where does the price of electricity stand? Its fluctuations over the year 2022.
During 2022, the price of electricity was constantly changing to the point where the price was consulted on a daily basis. But what caused these fluctuations? Find out in the following article.
- The price of electricity in 2022
Throughout the year 2022, we could notice how the price of electricity was unstable every time the monthly bills arrived. As a series of global milestones passed, electricity prices showed large or medium-sized increases.
As early as December 2021, the picture was already changing, because the MWh had reached a record high of over 300 euros. Although prices moderated a little at the beginning of 2022, in March, concerns began again, as electricity prices had reached almost 550 euros/MWh, reaching up to 700 euros at peak times.
- Changes after the “Iberian Exception”
As a measure to curb the cost of electricity, the law known as the “Iberian exception” was applied in mid-2022, and gas and its price for electricity production began to be capped. Thanks to this, it was possible to counteract the increases to some extent.
In August 2022, the price started to rise, reaching 459.4 euros/MWh. Again, the price started to show ups and downs, proving to be somewhat unpredictable and worrying.
- The price of electricity: October, November and December 2022
By the end of October last year, the price was the highest in Europe at almost 162 euros/MWh, although in November it dropped slightly to 151.2 euros/MWh.
However, although it had dropped slightly, the price also depended on the hourly tariffs. The most expensive hour was between 7 and 8 p.m., and the kWh was 0.37803.
- What causes fluctuations?
Prices are constantly changing due to fluctuations in the electricity market. Likewise, it also varies according to the companies and the contracted tariff.
The regulated market and its price are constantly reviewed by the government in order to set a daily price. The price thus varies every day taking into account supply and demand; at 20:15 in the evening, the new prices are published.
Price increases are due to a number of factors that are used to determine the daily cost, for example:
- The cost of gas
- Consumer demand
- The cost due to CO2 emissions
- The weight of renewable energy sources
Taking these points into account, the price of electricity at the end of the day can be determined. Now, we can only wait to see new ways to counteract the prices.