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What costs are necessary to provide the electricity supply?

  • Energy costs.
 
30% of the amount that appears on your electricity bill is used to pay for the energy you consume. The price of this energy is fixed every three months at an auction which is supervised by the National Markets and Competition Commission, and in which more than 20 national and international companies take part.
 
Power generation firms take part in the auction with a level of activity that represents less than 11% of the market. The remaining agents include operators specialised in trading, such as investment banks for example, in addition to power companies with production abroad.
 
  •  Costs of the power distribution grid.
 
4% of the amount billed covers the cost of building and maintaining the very high power lines, owned by Red Eléctrica de España, a company with a State holding that transports the electricity from the power stations to the distribution centres.
 
Another 10% of the bill goes towards the costs of building and maintaining the high, medium and low voltage power lines, which belong to private distributors and which finally carry the electricity to supply points such as households, factories, and other work centres.
 
These amounts are fixed by the Government.
 

< Who sets the price of electricity?

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