Spain’s government feels heat over sky-high electricity prices

Scorching heat has caused power prices to soar in Spain, leading to renewed tensions in the country's leftist coalition government over how to lower ballooning electricity bills.

Spain's government feels heat over sky-high electricity prices
Photo: Cristina Quicler/AFP

A recent heatwave which sent temperatures soaring as high as 47 degrees Celsius (117F) in the southern region of Andalusia caused demand for electricity to jump as people turned on their air conditioners, putting further pressure on power prices which were already high due to a global natural gas supply crunch.

“Everything indicates the month of August will end with the highest electricity bill in history,” consumer rights group Facua said Tuesday.

It predicts the average monthly household electricity bill this month will hit €92 ($107), a 44 percent increase over August 2020.

The jump in prices has largely offset the temporary reduction in the value-added tax (VAT) on electricity bills — to 10 percent from 21 percent — which Socialist Prime Minister Pedro Sánchez’s government introduced in July to provide relief to consumers.

Far-left party Podemos, the junior partner in Sánchez’s coalition government, has accused the administration of not doing enough to cut power bills.

The government “must intervene in the power market and move towards a system of regulated prices,” Labour Minister Yolanda Díaz, one of the co-leaders of the party and also the third highest-ranking member of the government, told the Ctxt magazine.

“All of this is due to a process of privatisations in the electricity sector… which has resulted in an oligopoly that has led to repeated price increases every year,” she added.

Spain at the end of 2020 had the fifth-highest household electricity prices in the European Union after Germany, Denmark, Belgium and Ireland, according to Eurostat, the bloc’s statistics office.

The country relies more heavily on natural gas to produce electricity than other European nations such as neighbouring France, which has a significant nuclear power sector, said Jordi Castilla, the spokesman for consumer group Facua.

The mercury hits 47ºC during in Seville on August 13th, 2021. – Scorching heat has caused power prices to soar in Spain. Photo: Cristina Quicler/AFP

Podemos has called for the government to issue a decree that imposes an “immediate” ceiling on power prices and has threatened to stage street protests over the issue, in a country where this question of energy poverty gets regular media attention.

The proposal has been rejected by the Socialist party, which argues Spain must respect European market rules for electricity.

“To say that we can solve this with a decree generates false hopes,” Minister for the Ecological Transition Teresa Ribera, a socialist, said last week in a TV interview.

“Look what is happening in the rest of Europe, it is not a problem that is specific to Spain.”

Ribera has instead called on Brussels to change the rules that set power prices in the European Union, which are, according to her, dictated by the price of fossil-fuels, a system which hurts gas-dependent Spain.

READ ALSO: Why is electricity in Spain more expensive than ever?

The minister wrote to the European Commission a few weeks ago to request alterations to the system, but Brussels “answered that it had no intention of introducing changes”, she told news radio Cadena Ser earlier this week, adding that such a position was “not reasonable”.

Ribera, however, has raised the idea of creating a public firm to manage the country’s hydroelectric plants, a measure long demanded by Podemos to replace major power firms which it accuses of making huge profits on the backs of consumers.

But this will ony be possible when existing electrical power concessions expire, which will only happen in a few years.

Podemos and consumer groups are asking for the government to make the drop in the VAT tax on household electricity bills permanent.

Taxes account for over 45 percent of the electricity bill in Spain, compared to an average of around 40 percent in the European Union.

Sánchez’s government earlier this month extended until October a ban on cutting off electricity and other utilities over unpaid bills as part of measures aimed at helping vulnerable people hit by the economic fallout of the pandemic.

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NEW LAWS: What changes about life in Spain in June 2023

New laws, tax deadlines, school holidays and cultural festivals, discover all about the important changes that will take place in Spain during June 2023.

NEW LAWS: What changes about life in Spain in June 2023

La Renta tax deadline

There are several important tax deadlines coming up in June for Spain’s annual income tax return known as ‘la declaración de la renta‘. This year you must present your earnings for 2022. The campaign began in April and ends on June 30th. From June 1st until June 30th, you can present your personal income tax return in person at the various Agencia Tributaria offices around the country. If you want to present them over the phone, the deadline is June 29th and if you want to pay by direct debit, it has to be done by June 27th. Click here to find out more and all the deadlines coming up this month. 

New road signs come into effect 

At the end of 2022, Spain’s Ministry of Transport and the General Directorate of Traffic (DGT) revealed a new raft of road signs and redesigns, many of which will come into effect in June 2023. The new signs and redesigns of old ones are to be rolled out throughout 2023, but many of them can be expected to be seen on our streets and highways from June 1st, 2023. Click here to see the new signs and learn what they mean. 

New reproductive law for women comes into force

On June 1st the Organic Law 1/2023, of February 28th will come into force which includes the “introduction of the necessary modifications to guarantee the effective enforcement of women’s sexual and reproductive rights”.

This includes menstrual leave for those suffering from extreme pain during their periods, which could be from a number of medical conditions including endometriosis, polycystic ovaries or dysmenorrhoea, among many others. The amount of leave should not exceed three days, however, it can be extended up to five days if your doctor considers it necessary. 

READ ALSO: Women in Spain first in Europe to get ‘menstrual leave’

The law also covers temporary disability leave due to termination of pregnancy. Whether you’ve suffered a miscarriage or had an elective abortion for any reason, you will be allowed medical leave. The number of days will depend on what your doctor recommends. 

The third most important point the new law covers is temporary disability due to ongoing pregnancy. Your doctor may put you on bed rest during pregnancy or may advise you against doing certain types of physical labour, meaning that you need time off work. 

Telecommunications law comes into force

Getting spam calls from companies trying to sell you new products or gettin you to change providers seems to be commonplace in Spain, but this could all be about to change with a new telecommunications law coming into force on June 30th. 

Article 66.1b of the latest reform of the General Telecommunications Law states that in order to protect the legitimate interests of consumers and users, operators are prohibited from making unsolicited telephone calls for the purpose or effect of promoting or selling goods and services.

While you still may receive these types of calls from companies you’ve signed up for or for products you’ve agreed to hear about, the good news is the number of spam calls you receive is set to decrease. 

Corpus Christi celebrations take place 

The Corpus Christi festival commemorates the body of Christ and occurs nine weeks after Easter. It is celebrated very differently depending on where you are in the country. In the Catalan town of Sitges, Elche de la Sierra in Albacete, and some places in Tenerife, the locals make brightly-colored patterned carpets on the streets, made of either flower petals or sawdust. In Granada, they have elaborate processions and lots of festivities, while in Barcelona they decorate the city’s fountains with flowers and place an egg to ‘dance’ in the water. 

READ ALSO: Why you should visit Barcelona’s quirky egg dancing festival

egg dancing festival

Ou Com Balla festival in Barcelona. Photo: Esme Fox

School holidays begin

June marks the end of the 2022/2023 school year and the start of the summer holidays. Most schools across the country will break up for summer around June 20th to 23rd, but there are regional differences. For example, in Andalusia schools will end on June 22nd, while in Catalonia they will end on the 20th for secondary school and 22nd for primary and kindergarten age. In Valencia all schools will break up on June 21st and in Madrid it’s June 22nd. 

This gives kids a 10-12 week summer break before they return to school again, usually the second week of September. 

READ ALSO: What childcare options are available over the summer in Spain?

New proposal for electricity rates 

The Spanish government is confident that it will soon approve a proposal on the new methodology for calculating the regulated electricity tariff, most likely in June. The PVPC is the Voluntary Small Consumer Price, the system that the Spanish government uses to establish an hourly rate for electricity. The aim of the new proposal is to reduce the volatility of rates and abnormally high electricity bills experienced, especially in 2022.

Unpredictable weather to continue 

June marks the official arrival of summer in the northern hemisphere, but this year the weather has been very unpredictable with droughts across much of the country throughout winter and spring, and the hottest April on record. Conversely, May has seen a dip in temperatures and much more rain, including flash flooding in some parts of the country. 

According to forecasts, June will be somewhat rainier and colder than normal throughout much of mainland central Spain, with only the Canary Islands experiencing higher temperatures. The mercury in the coastal Mediterranean regions and northern Spain, however, is expected to stay around the same as normal. 

New rail passenger rights come into force

From June 7th, rail passengers will benefit from protection when travelling and booking tickets. Among the new rights that this regulation includes, is a new obligation for certain carriers to offer their rail services as direct tickets, which provides greater security for passengers against the loss of connections in the event of a delay.

Companies will also have to provide real-time information to travellers, while ticket providers will have to provide passengers with any information on disturbances and delays. They will also have to inform passengers whether the tickets they hold constitute a direct ticket or not, otherwise, the provider will be responsible for guaranteeing the rights of passengers in the event of a trip interruption.

Noche de San Juan

June sees much of Spain celebrating the Night of Sant Juan. Saint John’s Eve occurs on the night of June 23rd and sees Spaniards across the country celebrating with bonfires and fireworks. It marks St John the Baptist’s birth as well as one of the shortest nights of the year.

It is celebrated slightly differently depending on where you are in the country. In Galicia, Pagan traditions of scaring away evil mix with religious ones as bonfires are set up on the beaches. In Catalonia, towns and cities go all out to celebrate Sant Joan with firecrackers, fireworks, and traditional sweet coca bread. Finally, in Alicante Las Hogueras or Les Fogueres take place, similar to Valencia’s Las Fallas festival where lare papier-mâché sculputres are burnt. 

READ ALSO: Goats, horses and fire: the weird ways Spain celebrates San Juan

Music festivals in Barcelona

Some of Spain’s biggest music festivals are to take place in June, including Barcelona’s Primavera Sound and Sonar. Primavera will be on from May 29th until June 4th, while Sonar will be on from June 15th – 17th. 

Batalla del Vino

In the Riojan town Haro, locals celebrate the region’s wine heritage in a very unusual way, by having a giant wine fight and throwing the ruby red drink all over each other. It takes place on June 29th and during the event, everyone meets on a hillside outside the town dressed in white. By the time the fight is over, everyone’s clothes have turned to shades of red and purple.