The Spanish Government has acted to protect consumers and homeowners against rising energy bills.
The cost of electricity has been steadily rising in Spain over the last year, reaching a peak in September 2021 of €189 per MWh. This represents a massive increase versus last September when the same MWh was costing consumers just €46.
As a result, consumers have faced a 34% increase in their bills since last August and whilst wholesale price rises across Europe are partly to blame some politicians in Spain are also pointing the finger at the energy companies themselves, who have been posting record profits.
According to Spanish Prime Minister Pedro Sanchez, “There are energy companies that are making extraordinary profits right now. That is not acceptable to me because they are profits from the evolution of energy prices.”
This has prompted the Spanish Government to directly intervene in the market. Introducing a raft of measures to tackle spiralling energy costs and redistribute some of these profits back to consumers, which are set to reduce bills by around 22%.
These measures include the creation of a cap on gas prices, which in turn forces electricity suppliers into selling energy at a fixed price, along with the extension of tax breaks on electricity bills.
The moves have been welcomed by all consumer groups, including non-resident homeowners, who have already been hit hard by Brexit. As the UK’s withdrawal from the EU has resulted in a 25% increase in their Modelo 210 taxes as well as the removal of previously acceptable tax-deductible items, such as mortgage interest and home insurance.