Hourly electricity rates billing in Spain: what you need to know

How to benefit from hourly variations in the price of Spanish electricity

On 1st July 2015 a pioneering system of hourly electricity rates came into operation in Spain, theoretically enabling consumers to take steps to reduce their electricity bills, but as with many new systems there are certain teething troubles and a great many doubts concerning how the system works and how users can make best use of it.

The hourly rates of electricity in Spain

The rates by hour for the following day are to be published by the official ree.es website during the evening before, and although at the moment there are no obvious links to this information from the front page it can be found at https://www.esios.ree.es/pvpc/. An easy alternative site to visit is https://tarifaluzhora.es/, which shows for example that for the general rate on 2nd July the most expensive electricity will cost 14.535 cents between 12.00 and 13.00, while the cheapest costs 12.263 cents between 2.00 and 3.00.

There is a separate night rate (“discriminación horaria”) which is contracted by some users: this features lower prices during the day and higher ones at night, suiting the needs of some consumers, and separate listings of hourly rates can be consulted at the same source.

A third rate for electricity-powered rechargeable cars is also published.

Apps are also available to enable users to access the information from mobile devices.

Who can benefit from this information?

At the moment between 10 and 11 million homes have been fitted with the new “smart” digital meters, but not all of them have been fully integrated into invoicing and measuring systems. This process will be completed for all smart meters already installed by 1st October.

By 31st December 2018 the law requires electricity companies to have replaced all old analog meters with the digital technology, making hourly rates available to all electricity users in Spain.

The smart meters have a small flashing light, with the frequency of flashes depending on the amount of electricity being used at any given moment. 

Once equipped with the new digital meters those benefitting from hourly rate information will be consumers paying the “Precio Voluntario del Pequeño Consumidor” (PVPC) rate. This was formerly the TUR rate.

Most electricity companies can offer an hour-to-hour billing system, but the State-regulated system can be offered only by Endesa, Iberdrola, Gas Natural Fenosa, EDP España, E.On España and Viesgo, so the hourly rates will be applicable only to customers of these companies. Other companies can join if they meet certain requisites.

How much can we expect to benefit from hourly rate management?

The first two days of the new hourly rate system provide little information to go on, but the initial data suggest that there will be a differential of around 20% between the lowest and highest daily rates in the genera tariff (considerably more on the “tarifa de discriminación horaria”, where evening rates are around double those during the rest of the day). However, if (as seems likely) the cheapest electricity will be available in the early hours of the morning, then there is a limit to the number of household appliances which can be programmed to operate at this time. Some washing machines and dishwashers have this facility, but it seems unlikely that many homeowners will be getting up at 2.00 in the morning to do the ironing and the hoovering!

Nonetheless, savings of rather less than 20% can still be obtained by choosing which hours of the day to use the air conditioning or other white goods. 

It needs to be remembered, though, that the actual amount of electricity we use accounts for only 37% of what we end up paying (the rest being accounted for by taxes and fixed charges). This means that even if we were to take maximum advantage of hourly differences it will not be possible to reduce electricity bills by even 10%.

What’s in it for the electricity companies?

By encouraging people to use electricity in “off-peak” hours, it should in theory be possible to flatten out some of the peaks and troughs in daily demand for electricity.

How will this affect the electricity bills we receive?

Some consumer organizations fear that the new bills will be very complicated to read, but until they start to be issued this will be hard to verify. By the end of July 2015 around 12 million households (43% of the total in Spain) will start to receive bills, and further information will no doubt become available.

In theory the new bills will feature a breakdown of consumption by hour, and other users will receive bills based on hourly averages calculated by the Red Eléctrica de España.