In Italy and Spain electricity is very expensive, so many people uses natural gas for everything but lighting.
And the situation seems that it's going to increase even more.
And the situation seems that it's going to increase even more.
It started harmless enough, but it has spiraled out of control. Of course distribution and transmission need to factor into the energy price somehow, but unfortunately for our friend, the electricity bill, stuff got out of hand.
Government after government tasked transmission and distribution network companies with ever more duties.
In addition to the core business of running their networks, their obligations include, but aren't limited to: acting as the social energy provider of last resort, running the street lights, building and maintaining EV charging infrastructure, buying green energy certificates at predetermined prices, financing offshore wind interconnection, etc.
In light of these extended duties, the DSOs and TSOs then went to the energy market regulators and asked if they could raise prices. Of course, the regulators decided in their favor, or they'd be guilty of systematically underfunding the companies they're supposed to regulate.
The situation now is that 35-44% of the electricity bill is directly earmarked for these so called Public Service Obligations. Add some excise taxes, miscellaneous fees, sum them all up, add VAT to the subtotal, and you end up with a grand total of ⅔ of your electricity bill being spent... not on electricity.
Don't get me wrong: We should be subsidizing most of these things, but in light of the energy transition, the electricity bill is just about the worst place to hide the cost.
Meanwhile, the gas bill has only a fraction of these Public Service Obligations factored into them. How on earth is that right?
No wonder people are reluctant to install heat pumps. It makes no financial sense!
It's true that the spanish grid very very rarely has problems, but still seems a lot compared to other countries.
Norging stands out in the stats.
Is this because people who use electric heating have old direct electric radiators? Don’t most homes in Spain or Italy these days have AC? Those are heat pumps so should be able to provide (some) heat in winter with reasonable efficiency.
https://www.statista.com/statistics/263492/electricity-price...
The rationale, they say, is that the spanish grid is "solid" and we rarely have problems, which is true but I don't know to what extent this explains the prices, or if cheaper countries do really have much more problems than us, which I highly doubt.
Electricity price (A)
+ Distribution network fees (B1)
+ Transmission network fees (B2)
+ Excise taxes on electricity (C)
────────────────────────────────
Subtotal
+ 21% VAT (D)
────────────────────────────────
Electricity price on bill
It sums up to somewhere between €0.23 and €0.28 per kWh for a cheap energy provider.
Electricity: 0.053 €/kWh Transfer fee: 0.043 €/kWh Electricity tax: 0.028 €/kWh VAT: 0.023 €/kWh
So, about 0.146€ per kWh. The transfer fee is to the local utility company, and we can't avoid that, nor the taxes.
We're paying extra for having power generated by solar/wind only, but the cost of the electricity is only about 1/3 of the actual price.