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Comment by melenaboija | Hacker News Reader

It is interesting to see that in Spain even generating half of the power with renewal energies the price per kWh still doubles the one from USA.

I am a total ignorant in the matter but there is something I have always heard which is that in Europe the justification for the price of petrol being double than USA is that we don't have the resources. I guess it is either false or the reasoning does not apply to electricity.

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Somewhat simplistically, the actual price at a given time is guided by the cost of the marginal source, i.e., the one source that is brought in to meet higher demand. If gas is your marginal source, then the electricity price is in large part determined by the wholesale cost of gas (at the price it was bought at, so there's a lag to the current cost). Europe as a whole has been over reliant on gas from Russia, and the cost of gas has gone up very sharply and Europe doesn't have that much of it domestically.

This isn't applicable to Spain however, thanks to what is known as the Iberian Exception. Since gas for Spain and Portugal comes from northern Africa, and in practice is priced differently. You will see that Spain's energy prices are often far lower than in, say, France.

So I wonder about the grandparent's claims here. I see that the average price per kwh in Spain is about 13 cents right now, which is basically the same price that I see in Missouri, one of the US' cheapest states for electricity. So unless I am missing something, it's a pretty similar situation.

In Spain (not sure in other countries) there's a bid every day for the prices the next day. Solar, eolic and nuclear bid at zero (they sell all they produce), then it comes hydro, and after that gas. At some hours of the day prices are low: tomorrow we will pay 8 cents in the central hours, probably the hydro will set the price, and 20 cents at 20:00, when gas will be needed. More than 80% of the electricity will be zero CO2.

If you program your heavy consume, you can average less than 10 cents.

The iberian exception, that is limiting the gas price, isn't needed since the beginning on 2023, because the market gas price is below what triggers the limiting.

Spaniard here, on my last bill I paid 0.120268 €/kWh, admittedly I'm on the free market but even on the regulated market the average price for March was 0.158719 €/kWh.

Is electricity really that cheap in the US? This chart shows that the average electricity price is 0.165 $/kWh, so I'm not sure what I'm missing: https://www.bls.gov/regions/midwest/data/averageenergyprices...

This is where I found the information, it might be wrong:

https://www.statista.com/statistics/263492/electricity-price...

I have no clue where the data for Spain comes from, in June 2022 the average price for the regulated market was 0.291347 €/kWh[0], that's ignoring the free market rates which are what 70% of Spaniards use (and they are cheaper when the market is volatile, like last year).

[0]: https://www.ocu.org/vivienda-y-energia/gas-luz/informe/preci...

US electricity pricing varies a lot, it’s ~$0.14/kWh in Maryland, we were paying something like ~$0.34/kWh in California, I’ve heard of <$0.10/kWh in hydro heavy areas like Washington state.

Data point: I pay ~$0.40/kWh in SF Bay Area.

In many European countries petrol prices at the pump are about 70% tax.

The price of petrol is higher in Europe than the US primarily because of taxes. There is an effect from domestic oil production but taxes are a much bigger part of it.

Electricity is a bit different. This article from 2018 argues its because of renewables surcharges. Since then, natural gas prices have diverged quite a bit so that's a much bigger factor today.

http://euanmearns.com/the-causes-of-the-differences-between-...

Electricity is a bit more complicated in Europe since a lot of the national grids are interconnected.

German prices, and some other European ones afaik, are determined by the merit order principle.

https://www.ostrom.de/post/the-merit-order-and-how-it-affect...

You cannot say that there a certain price for electricity. There are spot markets, which are quite transparent, which is why the prices from spot markets are often quoted. The spot markets indeed often use merit order.

But there are many more ways to trade electricity. And, for example, in The Netherlands only about one third of electricity is traded on the spot market.

For petrol, the big difference can almost entirely be explained by taxes. The electricity situation is more complicated with a lot of regional differences.

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