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New electricity tariffs 2021 How do the new timetables affect me?

New electricity tariffs 2021 How do the new timetables affect me?

From today, 1 June, there will be three time slots and two power levels

Electricity tariffs change on 1 June. From today, there will be three time periods and the possibility of contracting two power ratings. Of the three new periods, valley, flat and peak, the cheapest will be the valley, from 12 midnight to 8 am on weekdays and all day on weekends and national holidays. As a consumer, it is in your best interest to be familiar with the different periods so that you can adapt your consumption habits to them and assess whether it is in your interest to switch to self-consumption to multiply your savings.

How is the price of electricity calculated?

To understand how the changes in tariffs will affect you, you must first understand your electricity bill. The bill includes all the costs necessary for electricity to reach your home on a continuous basis. In this way, we can understand that the price of each kW/h that you consume includes:

  • Access feeswhich are the sum of:
    • Tollswhich cover the costs of transporting and distributing electricity to your home. Swith fixed prices set by the Comisión Nacional de los Mercados y la Competencia.
    • Electricity system chargeswhich are the costs derived from the activity of electricity companies, such as premiums for renewables, cogeneration and waste costs or compensation for the deficit accumulated in previous years as a result of not collecting enough to cover these expenses. These fixed prices are set by the government.
  • Production costs: What companies charge for producing energy and selling it wholesale. These prices depend on the energy demand at the time, the type of power plants that are producing that energy (hydro, gas, nuclear, solar, etc.), capacity payments or system losses. Prices are variable and depend on a number of factors.
  • Marketing margin: It includes the management costs that your supplier does for billing your consumption plus its profit margin. Again, this is a variable cost that depends entirely on the marketing companies.
  • Taxes: Apart from VAT at the general rate, electricity also bears an own tax of 5.112%.

As for the charges borne by the fixed part of the bill, which refers to the contracted power, they are very similar to those of the variable part. It includes tolls and charges and, in the case of regulated PVPC tariffs, marketing margins can be included in this part.

What changes with the new electricity tariff and why?

Because after negotiating with the government, the responsibility for setting the prices of the tolls (transmission and distribution of electricity) lies with the electricity traders.. The government accepted his proposal to modify tolls to optimise the use of the electricity grid by penalising consumption at peak hours to compensate for the stress on the grid at those times.

In order to be able to apply these changes in tolls, the charges regulated by the government have also been modified and they have decided to apply the same structure of time slots as the CNMC.

Together with the modification of electricity prices according to the tranches, The possibility of contracting two different powers for off-peak and peak periods is also modified, so that they can be adjusted to consumption habits.

These changes will apply to all electricity contracts below 15kW. power contracted, which will affect the vast majority of households and many small businesses. With this change in tariffs, the old 2.0 A, 2.0 DHA, 2.0 AHS and 2.1 disappear and are replaced by the new 2.0 TD..

New electricity tariffs. New prices

The new 2.0 TD tariff applies new prices to consumption depending on the time of day. These are the new brackets:

  • Punta (P1): 10-14 h and 18-22 h from Monday to Friday.
  • Flat (P2): from 8-10 h, from 14-18 h and from 22-24 h from Monday to Friday.
  • Valley (P3): 0 to 8 hours on weekdays and 24 hours on Saturdays, Sundays and national holidays.

NEW TIMETABLES FOR THE NEW 2.0 TD RATE

new_light_rates_2021_time_table_brackets

These new time slots do not coincide with the old ones, so if you had a tariff with hourly discrimination, take a close look at the new time slots and their prices.

The most notable new feature of this tariff change is the application of the off-peak period to 24h on Saturdays, Sundays and public holidays, meaning that consumption at weekends will be much cheaper than on working days. In total there will be 88 off-peak hours per week, 52% of the total. With this new tariff, the off-peak hours on weekday mornings will be lost, but 48 hours will be added on weekends. This will mainly affect the consumption of appliances that are permanently connected, such as refrigerators.

The most expensive hours are now concentrated in two four-hour periods, weekday mornings and afternoons, between 10am and 2pm and 6pm and 10pm. This means that there will be a total of 40 peak hours per week, which will coincide with the hours of peak household consumption. During these hours, prices are much higher than in the other two periods, so in order to save, you will need to be aware of your consumption during peak hours.

Two powers, cheaper in the evening

Contracting the right power for your home is not easy. If you contract too much, you will end up paying too much for the fixed costs associated with the power. If, on the other hand, you contract too little power, the automatic switch will trip every time you connect several electrical appliances. Until now, it was only possible to contract one power for the whole day, which made it difficult to adjust the power to consumption.

Thanks to the new meters, it will be possible to contract a different power for off-peak hours (from 0:00 to 8:00 on working days and the whole day if it is a Saturday, Sunday or bank holidays) at a cheaper price. In this way, you will be able to contract more power to use the most powerful appliances during off-peak hours. This will greatly benefit owners of electric cars, who will be able to charge them at night at a lower cost than usual.

In order to help you choose the most suitable power according to your consumption habits, the distributors will inform you when you have had the maximum power peaks during the last year.

Until May 2022, you will be able to make two free power changes, to adjust the power you want to contract in off-peak and peak hours..

Fixed costs go down. The price of energy consumed rises

Some items go up, others go down and, in the end, we find ourselves with many changes but we don't know how they will affect our bill.

electricity_price_time_table_new_tariffs

The price of the contracted kW falls

The contracted kilowatt falls by 16%. This means that the fixed part of the bill goes down. A household with less than 10kW of contracted power and that decides not to change it, will pay up to 16% less for it. If they have between 10 and 15 kW, the reduction will be even greater, up to 28% in fixed costs.

For example, a household that increases its power from 3.3 to 7 kW to facilitate the fast charging of an electric car would pay 339 euros per year under the old system, while under the new system, taking advantage of the fact that the power can be increased only during off-peak hours, it would be 135 euros per year, contracting the 7 kW only during off-peak hours.

Source OCU

However, this reduction in fixed costs will be offset by an increase in the price of the energy consumed, which will benefit those with low consumption to a greater extent, but will harm those with high consumption.

kWh price rises

The kilowatt hour rises by up to 9 cents in peak periods. For tolls and charges, 0.133118 euros per kWh will be paid, which, added to the cost of energy itself, will bring the price per kWh to more than 20 cents before tax (around 25 cents final price).. In exchange, the flat timetable offers similar tariffs to the current ones for a household that does not have time discrimination. In off-peak hours, each kWh will be a little more expensive than it is now, something that will have to be compensated for by shifting consumption to the weekend. 

Are electricity bills going up?

It depends on the tariff contracted before the change.

An average household with a 2.0A tariff with 4.6kW of contracted power and a consumption of 3500kWh per year will see its bill reduced with the new electricity tariff by around 2 euros per month.

A household with a 2.0A DH tariff and the same power and consumption as in the previous example will spend 34 euros more per year on average.

The main beneficiaries are small businesses and households with a contracted power of 10 to 15kW, which will see a reduction in their bills for fixed costs.

Frequently asked questions about the new electricity tariff

Will I pay more with the new electricity tariff?

It all depends on your consumption habits and how you organise your energy expenditure. If your consumption is focused on peak hours, you will undoubtedly pay more on your bill. If you can shift most of your spending to the off-peak hours of evenings and weekends, you can make savings.

When is electricity cheapest?

There are three timetables: peak, when electricity is most expensive, flat, with an average price, and valley, when electricity is cheapest. You will pay less for electricity during off-peak hours, which are from 00:00 to 08:00 on weekdays and 24 hours on Saturdays, Sundays and national holidays.

Am I obliged to contract two powers?

No, but it is advisable to do so because it can bring you small extra savings during off-peak hours. If you do not want to change the contracted power, you do not need to do anything, but if you do want to do so, you should talk to your supplier. You have two free changes so that you can find the combination that best suits your consumption habits.

What about self-consumption and the new electricity tariff? We'll tell you about it in a future article!

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