Tag Archive for: electrical energy

The energy price rises

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We are on the January blues and suffer a new increase in energy prices, but this time it seems to be abnormally high.

Apparently, according to some medium-sized suppliers not as well-known as frequent (Endesa, Gas Natural Fenosa, Iberdrola, etc) “the circumstances that cause this transitional situation are:

  • The cold wave that is affecting Europe is increasing the electric demand and heating using fossil fuels.
  • The stop of an important part of French nuclear park is increasing the electric exportation from Spain to the neighbouring country.
  • The absence of renewable resource – mainly hydraulic – and its deflator effect on prices is forcing producer to use more non-renewable thermal generation process – such as gas or coal – in the auction.”

It seems this situation is atypical for this time of year and as we go, electricity prices should return to values ​​close to the average recorded in previous years.

For more information, consult this page:

“Extraordinary rise in the price of electricity: a perfect storm”.

To avoid market volatility and the price at current rise, a customer may choose to hire a fixed price, considering that historically indexed prices have always come out cheaper over a year, the normal term of a contract of supply. Therefore, we continue to recommend the hiring of variable supply prices, unless the customer is very reluctant to minimal risk, which in any case would be covered in all likelihood because after the year you can return to renegotiate the terms.

Guidelines to save energy this Christmas

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During Christmas holidays, one of the most energy-consuming elements, for everyone, is the lighting of the house.

It is usual to use bright ornaments at home, which often use halogen technology, high drain. The best option is to progressively replacing it by LED technology, which preferably incorporates solar collector to run, so we are eliminating electricity consumption completely. The same happens in residential buildings with landscaped communal areas. However, in apartments we can only use LED decorative lights to save energy.

On the other hand, the most energy-consuming element during the cold months inside a home rarely focuses on lighting. Put the focus on the elements designed to heat the house, water heating, etc. such as air conditioning, the heat, central heating, etc. In that sense, it is advisable to regulate temperatures as the highest consumption occurs when there are large jumps and systems have to work twice as hard to reach the desired temperature at a given time.

  • Set the temperature between 17 and 18 degrees although we are not inside the house.
  • Set the temperature between 21 and 22 degrees when we are inside the house.
  • Set the temperature of the heater thermostat to 50 degrees in air conditioning
  • Close grids of rooms which don’t need to be heated
  • Each degree reduces consumption by 5-8%
  • With programmable thermostats to save heat, you do not need the entire volume of hot water 24h.
  • Take into account the simultaneity of consumption to avoid peak.

Buy at a fixed price or indexed

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Recently the electrical trading companies are betting on offer an indexed price, as there is a growing demand for this type of offer. It is not surprising since traditionally indexed price has always been a way to hire the most economical electrical energy.

Why is that?

To understand we can make a comparison with the banking sector. The fixed rate offered by a bank when hiring a mortgage includes detours costs and the risk of fluctuations involving loss to who sells. Indeed, a fixed price is a risk for whom provides it, such risk, let’s call it warranty, is included in the price we finally pay as an additional cost, as well for the fixed interest in the banking sector or the rate of fixed prices in the energy sector. When buying indexed price, we assume that risk. Therefore it is conceivable that it will be cheaper in the medium term. Given that contracts are signed for one year, the risk is negligible.

There is no free lunch

However, the indexed price is interesting whenever we do not charge commission high costs, also called operating costs or fee. The reasonable cost for SMEs is between 3 and 4 € / MWh hired (estimated consumption from consumer or trading company reading). Naturally this is always subject to consumption. Usually, the greater the consumption, the better trading offer.

We don’t need to understand the energy market. Let’s search a good adviser to tell us and ensure that we are paying the right price and, specially that we are optimised over our competitors.