The collapse of the price of gas in our country explains a large part of the drop in the cost of electricity The average price per MWh in October was 17% cheaper than just a year ago Spain, the fifth country with the most expensive electricity in the EU in the first half of 2022, according to Eurostat Two months after Russia almost completely closed the gas tap to Europe and we feared the worst for the cold season, we have found something that we had not seen in all year. The price of electricity has fallen so much that, for the first time in all of 2022, it is below the levels registered last year at this time. In October, electricity was paid 17% cheaper. If the average cost of the first month of autumn 2021 was 200 euros/MWh, this year it was 166 euros/MWh. We are still at crisis levels far removed from the average of the last five years, according to data calculated by the ASE Group. What has happened? It is precisely the gas that explains, to a large extent, this fall. With reserves practically full throughout Europe, the circumstance has arisen that the Spanish plants have not been able to absorb the entire amount of liquefied gas that arrived by ship. This situation has generated a fall in the price of gas in our country. Our reference, the MIBGAS, has been three times cheaper than in August. Gas has dropped so much that it has disabled the mechanism to compensate power plants that use it as fuel. This had not happened since the implementation of the Iberian exception last June. These internal factors, together with the reactivation of some nuclear power plants in France, have been transferred to the price that customers have ended up paying. What is expected for this winter? “If temperatures remain warmer than expected and the demand for gas from Asian countries continues to be low, MIBGAS prices will continue to move in a low price range,” they believe in the ASE Group. There are several factors that will push down the cost of electricity in the coming weeks: Less cold means more affordable gas. The lower its price, the less the so-called gas cap costs. Autumn and winter is usually the peak season for wind power. If there is a lot of wind, electricity is cheaper because it occupies the gap that would be covered by burning gas. The crisis is not, however, resolved. “Volatility is guaranteed,” they say in Grupo ASE. Europe will have to manage a complicated way out of winter if Russia does not reactivate its shipment through the main connection with Germany in 2023. The European comparison During the first half of the year, Spain continued to be the fifth country in the European Union with the price of highest electricity (whether measured with or without taxes), according to the European statistical office, Eurostat, Only Denmark, Belgium, Germany and Italy surpassed us in the case of including taxes in the comparison. However, the evolution of these prices has been very uneven and has depended in part on the measures adopted by the governments of each country to fight the crisis. If the first half of 2022 is compared with the same period of the previous year, the scale of variations registered ranges from negative figures (that is, falls) in the case of the Netherlands to increases of almost 70% in the case of the Czech Republic. Spain in this ranking is the seventh country where electricity became more expensive in the first half of the year. The second half of 2022 remains to be closed. In these months that have passed, we know that the Iberian exception has managed to make electricity cheaper in the Spanish wholesale market compared to other large EU economies.