Electricity prices at historic lows

Currently, we are facing a situation of minimum electricity prices in OMIE, due to the low consumption of electricity in Spain by the state of alarm caused by the Coronavirus.

After the publication of the state of alarm by the Government that forced the confinement of the majority of the population, the demand for electricity has been drastically reduced. Most of the offices and factories, which are the big consumers of electricity in Spain, have been forced to close temporarily.

At the same time, gas and Brent prices have also fallen on the market, the indices of which have a direct impact on the value of electricity. As a result, published electricity supply prices have fallen considerably. This, together with the fact that we are in Q2, the best period historically considered for negotiation, means that we are at the best time for companies to renegotiate their energy contracts.

Updated data collected

The OMIE has average price values today of 23.73 euros/MWh, the forecast for May is very similar, specifically 23.61 euros/MWh. This data contrasts with the OMIP value published in January 2020 for the current period of 40.65 euros/MWh, which is a drop of 40%.

As we can see, the value of the OMIE is reaching minimum values and the OMIP has very low prices. So this is the best time to negotiate in fixed price conditions.

Cost optimisation measures affecting businesses and the self-employed

The cost optimisation measures that affect companies and self-employed workers that do not require investment and which are published in the BOE on 1 April last are as follows:

  • Suspended supply, temporary cancellation of the electricity supply to the production centre. This is the least advisable option, since the subsequent registration of supply depends on the distributor. In principle, they are obliged to register again within 5 days, but the management must be done in person and will depend on their workload. This may result in a delay in the company’s return to business.
  • Lower the power to the minimum. To do this, the best thing to do is to consult an installer so that he can certify the minimum power that can be contracted. It is important that we make a good power adjustment because by lowering it to the minimum, you think you are saving and you may be incurring an extra cost.

While the Alarm State lasts, power reductions for both companies and self-employed workers are not charged and can be carried out several times a year at no cost. However, under normal conditions, the contracted power can only be modified once a year and it always has a cost. In 5 days they are obliged to increase the power, this is done through telematic meters. There is no need to be present, so there is no risk of delay in the return of the company’s activity.

Additionally, some sales companies are taking other measures such as pausing the billing and the invoices generated during the alarm state would be fractioned to the following 6 months.

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