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11 ways to cut costs as Spain’s electricity rates beat all-time price records

War in Ukraine has pushed electricity prices in Spain to the highest rate on record - €544 per megawatt hour (MWh). Here are 11 ways to cut down on consumption and therefore your energy bills during this period of extreme market volatility.

11 ways to cut costs as Spain's electricity rates beat all-time price records
2021, people in Spain paid an average of €949 in electricity compared to €675 in 2020. Photo: DESIREE MARTIN/AFP

The price of electricity in Spain’s wholesale market has been set at €544.98 per megawatt hour for Tuesday March 8th 2022, a €100 rise in just 24 hours and an all-time record for Spain’s energy sector.

Between 7pm and 8pm on Tuesday, Spaniards will pay €700/MWh for electricity, truly outlandish rates.

A year ago, the average price per megawatt hour was just €45.44, although over the course of 2021 the price did first double and then quadruple that rate as the Covid-19 pandemic, inflation, adverse weather and a volatile natural gas market all formed the perfect storm for consumers.

And yet, those sky-high rates pale in comparison with what people in Spain now have to pay, with Russia’s invasion of Ukraine proving to be the straw that broke the camel’s back.

The same is now happening in Germany, France and Italy (although not quite to the same extent as in Spain), increasing pressure on Brussels to find ways for the EU’s natural gas and electricity markets to not be so closely aligned.

To be clear, the record €544.98 megawatt hour (MWh) rate does not mean that every person’s monthly electricity bill in Spain is going to be in the thousands of euros (for interest’s sake, the average Spanish household consumes 0.0099 megawatt hour).

But you are likely to pay more. Over the course of 2021, people in Spain paid an average of €949 in electricity compared to €675 in 2020.

So the forecast under the current climate of war and global energy crises will mean your monthly bill could easily rise by €20 or €30, perhaps higher.

To help you counteract this spike in electricity rates in Spain, here are 11 tips that can help you reduce consumption and thus costs during this period of extreme market volatility.

Familiarise yourself with Spain’s cheaper electricity times

It’s become more expensive to use electricity in the first part of the day from 10am – 2pm and in the evenings from 6pm – 10pm from Monday to Friday. 

The average times are between 8am – 10am, 2pm – 6pm and 10pm – midnight. 

The cheapest times will be in the early mornings on weekdays and all day on Saturday, Sunday, as well as national holidays.

Adapt your contracted power to your real needs

Those on an estimated energy tariff could switch their contract to one that only charges them for the electricity they actually use and need. Free power changes are allowed until May 31st, 2022. This must be requested through your energy provider.

Check the maximum power and usage data

Check on your energy provider’s website to find out your consumption data and adjust your contracted electricity accordingly. Spain’s National Markets and Competition Commission (CNMC) suggests that this could save you up to €16 per year by doing this alone.

Avoid too much usage all at once

Using more than one appliance or electrical device at the same time pushes up consumption. For example, if you use the oven, the kettle and the washing machine at the same time, you will pay a lot more on your bill than if you use them separately. The CNMC has also said that “the iron is one of the devices with the highest consumption. Avoiding turning on all devices at the same time can lead to savings of between €200 and €300 per year”.

Shift consumption to periods outside peak hours

If possible, change the times when you use the most electricity. For contracted power during the cheapest times, the price is actually 95 percent lower than in the highest period.

Avoid stand-by mode on devices

Keeping televisions, laptops and other electronics and appliances plugged in and in stand-by mode whilst not being used does add up in the long run. 

If you unplug or switch off the current to these devices this can result in reducing your electricity bill by up to 10 percent annually. 

Use LED bulbs and remember to switch the lights off

LED bulbs use up to 80 percent less electricity than regular bulbs. Even though they are more expensive, they last 12 times longer on average. 

The average annual saving on people’s electricity bills when replacing normal bulbs with LED ones was €14 per bulb in 2018, before Spain’s electricity rates skyrocketed.

And although it may seem obvious, remembering to switch off lights and prioritising natural light in sunny Spain is a no-brainer if you want to cut costs.

Wash your clothes at less hot temperatures

As a basic rule, washing machine programmes running at low temperatures consume less than those running at higher temperatures. For example, washing clothes at 40°C instead of 60°C saves up to 55 percent consumption.

Use your fridge efficiently

As with the washing machine and dishwasher, it is possible  to reduce electricity consumption  through the refrigerator if you adjust its temperature to around 5°C and the freezer temperature to -18°C .

 In the case of the freezer, it’s also important to defrost it regularly, since the accumulation of ice can increase consumption by up to 30 percent.

Reduce your spending on heating

First, keep in mind that electric heating can be up to five times more expensive than gas heating in Spain.

Remember also for each degree you put the heating up, consumption will increase by 7 percent, so try to put on a jumper instead of keeping your heating above 20 °C.

Don’t overdo it with the air conditioning

This may be a big ask for those who live in parts of Spain that get extremely hot during the summer months, but there are few ways to cut costs of this high-consumption device. 

Buy an air con machine with an inverter system rather than one without as they’re 40 percent more efficient, install it in a place that doesn’t receive direct sunlight, use blinds and sunshades to help to keep your home cool during the hot hours of the day, and when temperatures drop in the evening switch off your air conditioning and air your home instead.

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WHAT CHANGES IN SPAIN

KEY POINTS: What changes in Spain in July 2022?

July sees the start of the summer holidays in Spain and brings with it new crisis handouts, VAT cuts on energy bills, travel chaos and a possible deal on UK driving licences. Join The Local Spain as a member to find out about this and plenty more.

KEY POINTS: What changes in Spain in July 2022?

€200 crisis payment available in July 

As part of their new draft of measures to help those struggling with the rising cost of living, the Spanish government announced they would give a one-off €200 handout to the most vulnerable individuals.

The payment plan is set to be activated this month and you can find out who is eligible and how to apply for it here.

According to Spain’s Tax Minister María Jesús Montero, approximately 2.7 million people in Spain will be able to benefit from the scheme. Individuals can request the €200 payment, as can families, but only one payment per household is allowed.

VAT on electricity bills cut by half 

Spanish Prime Minister Pedro Sánchez recently announced that the government would apply a further reduction in VAT on electricity bills, which has now been approved by the cabinet. This means that a VAT reduction, from 10 to five percent, will be applied to electricity bills from July onwards.  

Find out how much you could save on your electricity bill with the new VAT discount here

Travel chaos continues

In the lead-up to the summer holidays, there has been travel chaos across Europe, including in Spain, due to flight cancellations, staff shortages and strikes. Unfortunately, the travel misery is only set to continue into July as several Spain-based cabin crew, including those from easyJet, Ryanair and Lufthansa have announced strikes.

EasyJet staff are scheduled to go on a nine-day strike on July 1st, 2nd, 3rd, 15th, 16th, 17th, 29th, 30th and 31st. Meanwhile, the Ryanair strike, which started on June 24th will continue on July 1st and 2nd. Over 54 flights have already been cancelled by the low-cost airline and more than 300 have been delayed.

German carrier Lufthansa and its budget airline brand, Eurowings are also planning to cancel more than 3,000 flights this summer due to both staff shortages and strikes. This is expected to affect flights from the hubs of Frankfurt and Munich to Spain, among others. 

Could there finally be a deal on UK driving licences?

The British Ambassador to Spain Hugh Elliott recently shared his latest update on the driving licence negotiations between the UK and Spain, indicating a possible agreement to have affected drivers back on the road by the end of July 2022.

“The UK and Spain are now in agreement on the core issues that have been problematic and we’re now very close to finalising the actual text of the agreement,” he explained.

This will be a great relief for many British residents in Spain who were unable to exchange their licence for a Spanish one and haven’t been allowed on the roads since May 1st 2022.

Scorching weather returns to Spain in July

After a brief respite from the mid-June heatwaves, the hot weather is set to return in July. According to the weather site Meteored, the first week of July will see storms and unpredictable weather in the north of the country, while temperatures could reach over 40°C in the south of the country around Córdoba and Seville.

The middle of the month from July 11th to 17th is set to see temperatures rise again. It’s likely that much of Extremadura and Andalusia will experience temperatures around 40°C, while it could also reach 38°C in Bilbao and Madrid.

The last two weeks of July will get even hotter with Meteored predicting the hottest temperatures of the whole year. Temperatures are expected to be above normal in all regions apart from along the Cantabrian coast and in the Canary Islands.

Summer sales go into full throttle

July 1st sees the official start of the summer sales throughout much of Spain, although many stores have started even earlier. With rising costs due to inflation, this is the time of year to benefit from some of the biggest discounts.

Amazon has two days scheduled for its sales from July 12th-13th, while H&M and all the retail stores belonging to Spanish clothing giant Inditex (Zara, Massimo Dutti, Bershka, Pull & Bear and Stradivarius) are also due to have their sales this month.

After the start of the sales, you’ll see signs for “segundas rebajas” (second sales), then “terceras rebajas” and finally “remate final” (final push), where discounts progressively go from 30 percent to 40, then 50 and finally down to an incredible 70 percent price reduction. 

Imserso holiday scheme for pensioners kicks off 

Imserso is a social scheme offering holidays to the elderly, which aim to offer subsidised trips to pensioners. Applications for the vacation scheme this year are open from June 27th to July 19th and usually run during the low season from October. Find out how to apply here.

Depending on the dates you go and the type of accommodation you stay in, you will usually have to pay between €115 and €405 for the trip.

Vehicles in Spain need to have Intelligent Speed Assistance

New cars sold in Spain and across the EU must have automatic Intelligent Speed Assistance technology from July 6th as part of the General Safety Regulation.

All newly launched models will need to have Intelligent Speed Assistance systems installed as standard. The idea is to limit speeds and warn drivers to slow down if they’re over the legal speed limit.

Festivals in Spain in July

July sees a whole host of festivals and celebrations across the country. Most famous are the San Fermín Running of the Bulls, held in Pamplona from July 6th – 14th and the Fiestas de Santiago Apóstol, held in the Galician city on July 25th.

Other festivities taking place in July include Bilbao’s BBK music festival from the 7th to the 9th and the Moors and Christians parades in Villajoyosa from the 23rd to 24th, commemorating the battle of 1538.

Pride celebrations are also set to return in July. Madrid’s LGBTIQ+ festival will take place from July 1st to 10th throughout many areas of the city but concentrated around Chueca.

New law to improve rights of domestic workers

A new law could be approved this month to improve the rights of domestic workers so that they have the same rights as other workers, such as the right to unemployment benefits and proper wages.

A third of the 536,100 domestics (mostly women) who work in Spain are not signed up to Spain’s social security system, according to the country’s Labour Force Survey. Two out of every three have earnings around the minimum wage bracket.

Early last year the Spanish government sent out letters to Spanish households who employ workers to warn them of their obligations.

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