Megawatt hours and their smaller offspring

As I shaved I was listening to the radio, to the part they call a tertulia, that's the bit where pundits, usually journalists, talk about the latest news. They were talking about inflation and about electric prices. They had some boffin who knew all about the electric market. One little tidbit he dropped in at the end of his section was that every Spanish electric bill has a QR code which leads to a webpage maintained by some sort of Government quango, the "National Energy Commission". By using that code/website, you get a direct comparison between your last bill and the market in general. 

To explain it all properly would take pages and pages. It's quite complicated stuff, so I've kept this as short as my ponderous writing style will allow.

The Spanish electric market has two sorts of contracts for we household users. One is in the controlled market. The other is in the free market.

The controlled price varies from hour to hour. It's an almost incomprehensible pricing system; I certainly don't understand it. It's to do with supply and demand and with an auction between the big energy providers to decide on the price. There are only eight companies that offer contracts in the controlled Spanish market, they are the "Suppliers of Reference", and they are able to do so because they conform with certain government criteria. If you listen to the Spanish news and they tell you that today was the most expensive/least expensive day ever for electric prices, they are talking about this controlled price. If you buy a contract that uses the controlled price, you can never be sure whether your bill will be higher or lower even if you were to use the same amount of electricity under the same conditions.

Most people have a contract in the free market. "Anyone" can set up to sell electricity on to consumers in the free market. I presume it's more or less like that of any other business. If you're a supermarket, you buy your raw material, tomatoes say, from a producer, or their agent, at one price and sell them on to customers at a higher price. Normal capitalist economy stuff. Most supermarkets have tomatoes, the price varies from supermarket to supermarket and how they attract customers to buy them is up to each supplier. So with electricity, it's just the same. The companies that offer contracts to household users buy their electric off someone who generates it or from some intermediary, and then try to attract customers. How they package it up is how they sell their product. Most of the free market contracts have a fixed price for electric under certain conditions and for certain periods.

Electric bills in Spain have several elements. 

There's the power that you contract, the "potencia" - it's the thing measured in kilowatts. We have 3.54 kW. The more potencia you decide you need, the more you will pay each month. Often the cost of the potencia is lower at night and at weekends and more during the working day. 

Then there's the quantity of power that you use. The more power you use, the more you pay. That's why your partner/parent or children are always nagging you not to leave things on standby, to turn off lights, to raise the temperature on your fridge freezer, to buy a pressure cooker etc. etc. 

On top of this part of the bill, you pay a tiny, miserly, insignificant amount to the electric company to subsidise the bono social, which is the discounted price that is offered to people who might otherwise have problems paying their electric bill. Of course, you could see it as a subsidy to the electric companies, but let's keep clear of politics on subsidies and charity for the moment. 

The first subtotal on your electricity bill is made up of these three elements: power capacity, power used and the contribution to the bono social plus an electricity tax. I think this tax is to pay off a debt when the government subsidised the price of electric. I may be wrong. Maggie tells me I usually am.

The second part of your bill is made up of the "extras," which include renting the meter and things you may decide you need or not. One of the things we had on our free market, Iberdrola, bill was a sort of insurance against faults in the house wiring and for repair or replacement of certain white goods should they go phut. I'm sure that other suppliers have other extras.

Finally the subtotal for the energy/bono social/electricity tax is added to the subtotal for the extras and the whole lot then has IVA/VAT added to give us the total we will have to pay.

There have been lots of changes in the way that electricity is sold in Spain over the years. I don't think we had a choice of suppliers when we bought the house and if there was a choice of contracts I was unaware of that option. The company we contracted with was called Iberdrola and they simply renewed the contract each year. We were on the controlled price by default. When Putin started pounding the Ukraine the electricity price in the controlled market went crackers. Every day seemed to be a record high for the price of electric. We certainly noticed it in our bills. By now we were well aware that we had options and we asked Iberdrola what they could offer. I'd noticed, but not known why, the Iberdrola bill had, seamlessly and silently, transmuted into a Curenergia bill. Iberdrola sells in the free market while Curenergia is one of the Suppliers of Reference, selling in the controlled market. When Putin forced us onto the free market, we had to change suppliers to Iberdrola proper.

All of the free market contracts offer different pluses and minuses. The different contracts might offer electric at a fixed price every minute of the day or expensive electricity during certain hours balanced out by lower prices at other times. They may offer a fixed unit price over several years. Lots of them offer green electric though I wonder how anyone can determine where the electrons moving along the cables came from and as Spain seems to consider nuclear power to be as green as solar panels, wind turbines and hydroelectric there may be different ideas about definitions. There are often side offers; buy electric off Repsol, and they'll give you a discount at their petrol stations buy from someone else and they'll give you money off at the supermarket. 

So, back to where this blog started. Prompted by the radio tertulia I looked at the QR code which referenced lots of providers. From that I looked at some providers online, I talked to a couple of advisors one online and one face to face - both tried to sell me a contract with the same supplier. That supplier was not one of the ones that the National Energy Commission suggested as the best value. Amazingly, as if by magic, my Instagram and Facebook feeds also started to fill with adverts for energy suppliers - they must have some sort of sixth sense. It became obvious that changing from one contract to another was dead easy, and so I did.

Whether the decision was a good one or not, time will tell.

Nights on a white charger

I was in town this morning, on Bulevar, drinking coffee and reading a really interesting book about doors. A car stopped, the driver jumped out and went into the paper shop to get a newspaper. While he was parked, in the middle of the one way street, a van came up behind and had to wait. When the paper purchaser came out of the shop the van driver shouted to him "You couldn't do that in Madrid".  And it's true

Nobody would describe Pinoso, or even Culebrón, as "Deep Spain", la España profunda. That's the Spain that's empty, without services, left behind by the modern world. No mobile network, no health services locally, no Internet access, no shops. But lots of Spain is like that; nearly empty. There are hundreds of villages that only have a few inhabitants, usually older people, and there are even villages that are totally abandoned apart from, maybe, occasional weekend and summer occupants. There's a whole movement about la España vaciada, empty or emptied Spain. Pinoso is very rural, very traditional, but it has plenty of shops and businesses and even a bit of social life. Young people say it's a bit boring but I remember that Peterborough was voted the crappiest town in the UK by young people a few years ago so we can't take much notice of them can we? And, if Pinoso is rural then Culebrón is much more so.

We once looked at a house in Huntingdon with a view to buying. It was one of those big pre war villas with a really nice, mature, fenced in garden. Inside it was original. The wiring for the lights was bell wire tacked onto the wall. There were 5 amp and a few 15 amp round pin plugs. Original wiring. The house was above our budget anyway and we knew that a full rewire, and the rest, would just be so expensive. Every time we passed that house, modernised by its new owners, I wished we'd been rich enough to buy it.

I never really thought about the electric installation in the UK as I moved from house to house. I still have no idea what sort of circuit breakers/fuses most places have but I know that they never popped unless something went seriously wrong. Here in Spain it's something to be aware of as you buy or rent a house or flat. You might have a contract for 5.5kw for instance. In theory this means that the fuses might pop with just a tumble dryer, the oven and an aircon unit on. In practice the circuit breakers are quite elastic and you could probably draw about 11kw before they plunge you into darkness. Here in Culebrón, for years, we got by with 2.2kw because the infrastructure wasn't up to supplying much more and even now we only have 3.45kw. It doesn't really cause us much of a problem except on cold winter mornings when it's easy to get over enthusiastic with fan heaters, toasters, kettles and microwaves.

At the start of next month all the electric bills in Spain will be changed to reflect a new three tier pricing system based on the time of day. In the parlance there will be peaks, troughs and plains. Rather unsurprisingly the most expensive electricity is when demand is highest and the least expensive is in the dead of night and also on national holidays and at weekends. For those of us on a controlled price type contract this will be reflected directly in the bill. We'll be able to see how much we were charged in each time zone. The idea is that we will change our habits to save money and consequently be a bit greener. How the companies that sell power in the free market pass on the new pricing structure will, presumably, be reflected in each customer's contract.

The interesting thing about this new three time zone controlled contract is that it also allows for two different levels of supply. For instance if you have a power supply of 10kw you may decide that in the troughs you could get by with 5kw. In our case the contracted power is so pathetic that we'd be popping fuses left right and centre, particularly over the weekends and on those bank holidays, but if we lived in a less rural place with a decent supply, it might be worth considering dropping the contracted power supply overnight. As you may expect the price for a lower rated supply is less than for a higher rated supply. The example that is always quoted is for the people with electric cars. Charge up overnight on doubly cheaply rated electric.

I rather suspect in our case that the new three tier system will make our electric bills just a tad more expensive than the current two tier system we're on. It might also mean that I have to stay up a bit later to run the washing machine from midnight and the tumble dryer at the end of the wash cycle or maybe I can get Alexa to do it for me.

Electricity bills and borrascas

Here they are called Borrascas, I'm not sure what they are in English but something like storms or maybe Atlantic Lows. The storms that come in from the Atlantic and nowadays, just like hurricanes, have alternating and alphabetically arranged female and male names - Ana and Bertie, Charlotte and Derek. A little over a week ago Filomena, brought lots of snow which caused problems all over central Spain, particularly in Madrid, and low temperatures everywhere.

When it gets cold, and more so when it gets hot, Spain uses more electric. This is not a great surprise. The nuclear power stations never go offline but all the other forms of electricity generation have ups and downs. You can't pull so much from wind turbines if there is no wind, the solar panels don't work so well at night and even the hydroelectric stations are affected by droughts and rainstorms. When all else fails the gas and oil fired power stations are brought on line. The power generated from these fossil fuel plants is the most expensive to produce. Through some complicated mathematical formula a Spanish Government agency calculates the cost of generating each individual unit of electric at any given time. This fixed price is based on the most expensive generating capacity in use. So when the demand is so high that the gas and oil burning power stations are fired up the price goes up to match. This fixed price affects the bills of ordinary consumers. More precisely it affects the price of users in the regulated market because Spain has two sorts of domestic electric contracts: the regulated market and the free market

The energy market in Spain was liberalised years ago. When it first happened I looked around a bit at different providers and I couldn't see any advantages in changing. With the passing years, that situation has changed and I should have shopped around but inertia and I have always seen eye to eye. 

We don't get cold callers in Culebrón, actually that's not true, a couple of Witnesses turned up in 2005 and occasionally the melon man blows his horn outside the gate but, in general, peace reigns. I hear it's not the same in the big cities with an endless procession of smooth talking salespeople bearing electric and gas contracts pounding on people's doors. It's not something the telephone sales people try to sell us either.

Every now and again the price of electricity gets media coverage. Last week we apparently reached the highest price ever. The kerfuffle in the media made me curious and I had a look to see how it was all organised and what sort of contract we had.

Although the devil's in the detail there are, fundamentally, just two options for those properties with a supply of less than 10kw. The regulated tariff and the free market tariff. The regulated tariff uses prices per unit of electricity set by the government. This is the one that gets the media mention. This is the tariff that we have. If you're in Spain and you have this sort of contract your will have the letters PVPC somewhere on your contract or, if it's written in English, VPSC. It's Precio Voluntario al Pequeño Consumidor for those who are interested.

The second tariff, the free market tariff, is the alternative and it's available everywhere from over 270 providers. What the contracts offer, how much they cost and what they include and exclude is only limited by the ingenuity of the contract writer. Potential customers compare the various offers and sign on the dotted line for whichever option they think is best. My guess is that the permutations between the fixed costs, the unit price, inclusion of service contracts and other factors are almost boundless. This is where the price comparison websites must come into their own. If you need a supply of more than 10kw this is the only option available to you.

The regulated tariff, the one affected by the official government price, is only available from the eight power companies which are called Comercializadores de Referencia which, sort of, translates as the Reference Marketers. In the regulated tariff contracts the fixed or standing charges and the per unit price are separate. There are three options or modalities about how the units of power are offered and charged. Option one is that the charge is the same at any time of the day or night, option two is that the day is divided into two twelve hour periods with a higher and a lower price for each period and the last option is that the day is divided into three eight hour slots with three different prices per unit at the different times - the last one is particularly useful for people with electric cars to charge.

The Comercializadores de Referencia can also offer a fixed price annual tariff. In that case they tell you how much each kilowatt will cost during a calendar year and you sign up (or not) knowing that will be the price without being subject to the ups and downs of the market.

With trying to work out how our regulated bill was put together I read the bill properly for more or less the first time ever. Generally I just look at how much and when I have to pay. We get our electric from Curenergía which is a part of Iberdrola and I realised that they had already done most of the donkey work for me in the small print at the bottom of the bill. They do an analysis which gives comparisons between how much you have paid with your current modality and how much you would have paid under one of the other modalities. I still couldn't be bothered to go hunting around for the best deal on the free market but I did realise that simply by going to the sort of bill where the prices are different for each twelve hour period we could save maybe 100€ a year and I could do that online in a few minutes.

So I did.

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The photo by the way is from back in 2010 when I taught English to people who worked at this gas fired power station in Cartagena. The plant was later bought by Gas de France. I remember being told that the whole plant had been on standby for a whole year, not used at all, and that if they were needed it took a few days to bring the plant online.