Wind energy en the price of light

AEE
Predicted demand coverage with wind energy (%)
Price schedule PVPC (cent€/KWh)

Wind energy en the price of light

WHY THE MARKET PRICE LOWERS WITH WIND ENERGY?
The final cost of the domestic electricity bill depends on three main components: regulated costs (which in 2020 accounted for around XX%), the cost of electricity generation (XX%) and taxes (XX%).

The regulated costs of the system are transportation, distribution, debt payment and interest on the tariff deficit, the incentive paid to large industries to reduce their electricity consumption if necessary (interruptibility), payments for capacity to conventional technologies, incentives for renewables and cogeneration, and extra costs for electricity generation in the islands, where it is more expensive to produce than in the Peninsula.

The use of wind power instead of fossil fuels has meant savings for the system valued at 25,035 million euros in the period 2012-2019, due to the reduction in the price of the electricity market pool.

HOW MUCH DOES WIND ENERGY REDUCE THE ELECTRICITY BILL TO SPANISH CONSUMERS AND COMPANIES?
The reducing effect of wind energy in the Spanish electricity market in 2020 was slightly lower than in 2019, due to lower demand electricity caused by COVID-19 and the reduction in gas prices.

Wind generation has been a benefit for Spanish consumers Spanish, especially for industrial consumers. For an average consumer with Tariff AT1 and a consumption of 1,500 MWh annual, savings throughout 2020 have been € 7,886 (discounted wind energy incentives included in the electricity bill). If the existing 27,446 MW of wind power had not been put into operation, the electricity would have cost € 7,886 more per year.

In total, wind energy generated a net saving (after discounting the incentives) to electricity consumers of 71 million euros.

WHEN IS THE INFLUENCE OF WIND ENERGY MORE EVIDENT ON THE PRICES OF LIGHT?
During the windiest months (which coincide with the winter season and the beginning of spring) the market price is lower than in the summer-autumn months, when the wind blows less.

The greater the coverage of electricity demand with wind energy, the lower is the price of electricity for domestic consumers.

WHAT PERCENTAGE OF THE ELECTRICITY DEMAND IS COVERED BY WIND ENERGY?
In 2020, wind energy covered 21.9% of the peninsular electricity demand (according to REE data), which placed it as the second source of generation in Spain. With 27,446 MW of installed wind power, we are the first technology for installed power, being key in our energy system.
DID YOU KNOW THAT WIND ENERGY WAS THE FIRST SOURCE OF ELECTRICITY FOR THE SPANISH CITIZAENS IN 2013?
Wind energy was the technology that contributed the most electricity to Spain in 2013, which was the first time in history in a full year. And Spain was the first country in the world in which this circumstance occurred. The energy produced by the wind in the year was enough to supply 15.5 million average Spanish households. In addition to annual production, wind power surpassed other highs in 2013. On February 6th, it recorded a new record for instantaneous power, with 17,056 MW at 3:49 p.m., 2.5% higher than the previous one, registered on April 18th 2012. That same day, the maximum hourly energy was also exceeded, with 16,918 MWh, between 3:00 p.m. and 4:00 p.m., which represented an increase of 2.8% compared to the previous one.
IF SPAIN IS ONE OF THE COUNTRIES IN THE WORLD WITH THE HIGHEST WIND ENERGY PENETRATION, HOW IS IT POSSIBLE TO SAY THAT IT IS ONE OF THE EUROPEAN COUNTRIES WITH THE MOST EXPENSIVE ELECTRICITY?
It is said, but it is not entirely true. According to the most recent Eurostat data, Spanish domestic consumers pay for electricity xx% more expensive than the Eurozone average, but it costs them less than countries like xxxxx. In 2020, the regulated costs (xx%, according to the CNMC) of electricity rates have been reduced, but the price of the electricity market has increased considerably, from xx € / MWh in 2020 to xx € / MWh in 2021, due to especially to xxxxx.

In addition to the cost of energy, the electricity bill includes many other concepts that increase the cost of electricity. Some are directly related to supply, such as transport – a service exclusively provided by REE – and distribution. Others, with supply security, such as capacity payments, national coal subsidies or the incentive paid to large industries to reduce their electricity consumption if necessary (interruptibility). And others are the result of political decisions, such as the costs of the tariff deficit, the incentives for renewables and cogeneration, and the extra costs for electricity generation on the islands, where producing is more expensive than on the Peninsula.

To this must be added direct taxes (electricity tax, with a tax rate of 5.11%, and VAT, 21%) and indirect (7% on generation).

In 2020, incentives for wind power accounted for xx% of regulated costs, while it contributed 21.9% of the electricity consumed by the Spanish citizens.