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.

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.

----------------------------------------------------------------

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.

Power struggles

Anyone who has followed this blog for any time will know that we have a piddling electrical supply of just 2.2 kW or some 10 amps. Not technically sufficient to run the kettle and the iron at the same time. Nonetheless because of the tolerances of the system we get by.

Things change though and we recently got a letter to say that our power supplier, Iberdrola, is on the verge of fitting a smart meter with a built in cut-out. We decided that we couldn't be sure that more modern kit would be as elastic as our ancient equipment so I started an email correspondence with Iberdrola to see if we could up the power.

The last time I asked I was told that 3.45kW was as high as we could go. This time, because Iberdrola replaced the supply cables a little while ago, we were told that we could have up to 15kW. There was a snag though. The boletín, the thing that shows that we have wiring to such and such a standard, would only allow us to have 3.45kW unless we got an electrician to test and certificate the system for more.

There's a lot of fuss in Spain about the price of electricity and one way to reduce costs is to reduce the power contracted. That's because the standing charges are a big component of the bill. Consequently there are lots of ready reckoner type websites to tell you how to calculate how much power you need to contract. I tried one and it said we needed 3.75kW, another two gave very similar results. I don't think it's true myself but people who know better than me say it's enough. Maybe it's to do with the tolerance of the system. So I checked with Iberdrola, If we went to 3.45kW and it wasn't enough could we still go up to more kilowatts if we got the appropriate certificates. The answer was yes.

We're now on about email number six or seven by the time I finally say yes to go ahead. This time Iberdrola, and the emails have become much more chatty by now, come back and point out that we will lose the Social Bonus. This is an automatic 25% reduction on the total bill because we contract so little power. I know, I tell them, go ahead anyway. It hurt to send that email I can tell you.

And today, probably now on email number 10 or 11 Iberdrola come back and say that even to go to 3.45kW we'll need to get a new boletín. I've reminded them that they said we were OK with that at the start of the process.

A couple of days later and Iberdrola say whoops! Yes we can have 3.45kW without any paper formalities.

And, just to finish it off on the 5th July, about a week after I wrote the bulk of this, I got a call out of the blue from the Iberdrola man who was five minutes away. He fitted one of the new intelligent meters, checked that the fuses were OK and left us with the increased power supply. So far the circuit breakers haven't popped.

Energy poverty

There are a lot of people in Spain who have difficulty in paying their energy bills. A nice warm house, when it's cold outside, is one of those symbols of well being and comfort. Just think of any of the filmed versions of A Christmas Carol. Being cold is miserable

I've lived in six different flats in my time in Spain. None of them have had gas, just electricity. Whilst there are plenty of people who have piped gas and many more who use bottled gas when Spaniards talk about energy they are really talking about electric.

That's not our case; in Culebrón we have a gas hob, gas water heater and we generally use gas fires to heat the house. We have a pellet burner too, a device that burns reconstituted wood pellets, but it has been giving us a bit of trouble recently and we have fallen back on the gas fires over Christmas. Because we have been in the house for longer periods and, because we are rich enough and determined enough not to be cold we have bought five gas bottles since the 21st at a cost of close on 70€. Our last electric bill was also the highest that it's ever been. It's not even been a cold autumn or winter so far. The problem for us is that any heat we pour into the house flies out of the poorly insulated building. Our house is old, it was not built with energy saving in mind and, if there was any thought at all about the design of the house it was to keep it cool not warm. After all we live in one of the warmest parts of Spain. As I've said many times on this blog we are much colder here than we ever were in the UK during the late Autumns and Winters.

I've heard it said lots of times that electricity in Spain is amongst the most expensive in Europe. We get a subsidy on our electric supply, the social bonus, because our supply contract is for 2.2kw. This isn't from choice, the infrastructure of the supply company isn't tough enough to give us more power. This social bonus is applied to anyone who has a supply of less than 3kw, the idea being that it is poorer people who have low power supplies. Although my hourly pay rate is around the UK minimum wage we are not exactly poor and the fact that we get the bonus shows that it doesn't, necessarily, offer financial support to the people who most need it.

Doing the crude maths of dividing our last bill by the number of kWh we pay just over 14 cents per kilowatt. Without the social subsidy that would go up to 17 cents which is around 14 pence. Our standing charges are about 27% of the total though in some of the flats we've lived in, particularly the one which had a decent supply of 10 kWh, that rose to nearly 50% of the total. This high percentage of standing charge means that, however hard you try to save power, you only have control over a percentage of the cost. One of the ways people try to reduce their bills is by lowering their supply with the result that circuit breakers trip all the time when you try to pull more power than you are paying for.

This energy poverty isn't just about income. It's a balance between the money coming in and the power that a household needs to consume. In Spain the figures suggest that some 17% of households, or seven and a half million people, have difficulty in maintaining their homes above 18ºC. In countries in the North of Europe the figure is usually quoted at around 2-3%. In Spain too there is more of a problem in the warmer parts of the country because of the build quality. The homes in Asturias are built to keep warm whilst houses in Andalucia are not. Fit, younger adults can get away with colder houses than those that have older people or children.

Apparently this is a Europe wide concern, with the UK being one of the pioneers with laws and regulations designed to help people in a bad way. Here in Spain the politicians have only just really got around to talking about it. A recent case where an 81 year old died in a fire caused by a candle after her power was cut off has given a certain urgency to the matter. Only the other day, a deal was struck between three of the four principal political parties for new regulations.

I have a horrible feeling though that like many Spanish laws, for instance the Freedom of Information law, the new regulations will be more window dressing than substance.

Strange and bizarre

We'd popped in to town to do some exciting jobs - buy screen wash was one of them. I was also going to bank some money. Take note of the opening sentences and be warned now that this blog is not going to be the usual emotional roller coaster ride of an entry.

My phone rang when I was in the bank queue. It was our next door neighbour to say that Iberdrola, the electricity supply people, wanted to get into our garden. You will remember I talked to Iberdrola about moving some supply cables that were either menacing or being menaced by our palm tree. Nothing has happened for months. The discussion that I'd had with some Iberdrola employed tree trimmers had suggested that we were talking thousands of euros if we got the cables re-routed and I'd quietly let the whole thing slide.

We hurried back from town. I feared the worst. I could imagine the euros flowing out of that bank account to pay for new cables, new installations and a new meter. The three blokes said they wanted access to our garden. The three blokes said they were replacing the uninsulated supply to our house, and those of our neighbours, with a beefier insulated cable. There was no mention of the palm tree, there was no mention of me having asked for the work. So far as I could tell, and I didn't want to ask too many questions, it is a simple, routine upgrade of cables that haven't been changed for thirty or forty years.

We left them to it, in fact I couldn't get away fast enough. When we came back, they had happpily run the new cable through the palm tree branches and left enough slack in the wire for it to be able to deal with a bit of a pumelling from a palm tree thrashing around in the breeze. They are coming back tomorrow to connect it all up. How strange. Provided that there are no last minute hitches it looks as though our palm tree has just been saved and our electricity supply ensured.

I went back to the bank. As I've said in an earlier post I've been driving to the nearest branch of my bank to pay in cash at the start of each of the last few months. Last month though I read an article about the huge differences in fees charged by the different banks. It seemed that a bank with an office in Pinoso would only charge me 2€ in transaction fees. That seemed a lot better deal than driving 30kms to stand in a long queue to pay the cash in at my own bank. It was a short queue in Pinoso but the man wouldn't take my money. He said I couldn't pay the money in to another bank from their office. I was amazed. I explained that I understood there was a fee. No it's just not possible said the man. Why don't you go to the Santander office around the corner?

Now it is true that there's an office in Pinoso that has a Santander Bank sign outside. I'd tried to do some form of banking there a couple of years ago without success. The chap behind the counter told me they only sold financial products and did not offer banking services. Today I poked my head around the door of the empty office but for the man at his desk playing some sort of game on his phone. "Can I pay money in to a Santander account here?," I asked. "You can indeed," he replied. I was pleasantly surprised and handed over a piece of paper with my 20 figure account number on it. "Ah, it's an old Banesto account," he said, "I can't pay into that." I asked him if it were possible to pay into the account from other banks. "No, you have to go to a Santander branch, an old Banesto branch," he said.

Now Banesto had been largely owned by the Santander Bank since the early 90s though both banks continued to have a high street presence till 2012. It was then that the Santander bought up the last of the Banesto shares and combined the two entities closing down various branches of both. The Banesto logos disappeared. Later the websites, account names and everything else took on the Santander name and look. Everywhere that is but for the office in Pinoso where the division was still alive and well. I have to give the man his due he did try to access my account but his computer said no and that was the end of it,

How bizarre. A banking system which won't, apparently, let you pay money in except under very strict conditions. I don't understand. I've done it in the past. It seems crazy if it is no longer possible.

I drove to Monóvar and paid the money in there. "Oh," I asked the teller as I was about to leave, "Can I pay into this account from other banks?" "Course you can," he said. "They usually charge you to do it though."

Aaargh!!