On January 1, 2025, electricity prices in Spain unexpectedly jumped to nearly €1,000 per megawatt-hour (MWh) for some consumers. This spike was caused by an error in the system, which Red Eléctrica de España (REE), the country’s electricity operator, quickly fixed. The company announced that it may update the regulated electricity price (PVPC) for that day and publish a corrected version.

What Caused the Price Increase?

The price increase happened between 10-11 AM and 5-6 PM on New Year’s Day. Prices reached €964.9 and €803 per MWh during those hours. This was due to a sharp rise in prices for ‘adjustment services,’ which are used by REE to balance electricity supply and demand. The rise in prices was the result of an error by one of the market participants.

In response, REE informed the electricity suppliers that the PVPC prices for January 1 might be ‘re-published’ with adjustments for those two hours. The Ministry for Ecological Transition quickly approved this change, making sure consumers would not be affected by the unusually high prices.

How Did This Happen?

The price increase occurred during two specific times — 10-11 AM and 5-6 PM — when prices for reserve services rose sharply. At 10 AM, Spain’s electricity demand was 20,000 MW, but there was little renewable energy available. This led to a need for more expensive energy from combined cycle plants, which drove up the prices.

REE explained that the problem stemmed from an imbalance in the system when secondary reserve prices rose. However, the issue has now been fixed, and prices for the affected hours have been adjusted.

What Does This Mean for Consumers?

For the 8.5 million consumers using the PVPC, the updated prices will mean no extra costs on their electricity bills. The average price for the day was €205 per MWh, and the revised prices for the peak hours will be around €400 per MWh and €300 per MWh. These changes ensure consumers will not be charged the inflated prices that were originally set.

What Are Adjustment Services?

Adjustment services help keep Spain’s electricity grid balanced by making quick adjustments when there’s a mismatch between supply and demand. These adjustments can be triggered by things like weather changes or unexpected demand spikes. While these services sometimes lead to price increases, they are necessary to keep the system running smoothly.

This incident shows how complex managing the electricity system can be, especially as renewable energy becomes more important. Red Eléctrica acted quickly to resolve the issue, and the Ministry’s approval of the price update prevented consumers from facing higher bills.

How to Check if You’re on the PVPC in Spain

Consumers in Spain can determine if they are using the Precio Voluntario para el Pequeño Consumidor (PVPC) or Voluntary Price for the Small Consumer by checking their electricity contract. The PVPC is the regulated electricity price for small consumers, typically those with a contracted power of less than 10 kW. If you’re on the PVPC, your electricity bill will reflect the price changes set by the government based on market conditions. You can also ask your electricity supplier directly or check the details on your contract. For most consumers on the PVPC, the price fluctuates throughout the day, with higher rates during peak hours and lower rates during off-peak times. If you’re not sure whether you’re on the PVPC, it’s a good idea to contact your supplier to confirm.

How to Check Electricity Prices in Spain

To stay informed about electricity prices in Spain, here are some useful resources:

1. Red Eléctrica de España (REE) Website: You can check real-time electricity prices directly on the official REE website: www.ree.es
2. Electricity Supplier’s App or Website: Most suppliers, like Iberdrola or Endesa, offer apps and websites where customers can track the current price of electricity.
3. Social Media and News: Keep an eye on social media accounts of REE or news outlets for major price updates and announcements.

Double-Check Your January Bill for Accuracy

While the recent electricity price issue has been addressed by Red Eléctrica and corrections have been made, it’s always a good idea to review your January electricity bill. The adjustments should mean that most consumers won’t face unexpected charges, but taking a moment to check ensures that everything looks correct. If you’re uncertain about your bill or notice any discrepancies, reaching out to your electricity supplier for clarification can provide peace of mind. Being proactive can help avoid any surprises and ensure you’re only paying what you should.