Since the end of 2020, and more intensely since March 2021, the wholesale electricity market in Spain has been setting unusually high prices, largely motivated by the rising cost of natural gas and the price of CO₂ emission allowances in the international markets.

This rise is getting worse in recent weeks, directly impacting the final price that many consumers pay for electricity, such as holders of contracts with a regulated price (PVPC or Voluntary Price for Small Consumer), or those based on dynamic prices, indexed to the day-ahead market. This situation is causing certain social alarm, which has prompted the Government to approve Royal Decree-Law 12/2021, of June 24, which adopts urgent measures in the field of energy taxation system and in the generation of energy, and on the management of the water regulation fee and use rate.

From the entry into force of the aforementioned royal decree-law and until 12/31/2021, the rate of 10% of the Value Added Tax will be applied to the electricity bills of contracts whose power is less than 10 kW, when the arithmetic average price of the daily market corresponding to the last calendar month prior to the last day of the billing period has exceeded € 45 / MWh, as well as to the recipients of the electricity social bond.

Additionally, in order to offset the higher costs that the companies that determine the price of electricity in the wholesale market are bearing, during the third quarter of 2021, the tax on the value of electricity production is exempted from the facilities that produce electricity and incorporate it into the electrical system.

You can consult the full legal text at the following link:

https://www.boe.es/diario_boe/txt.php?id=BOE-A-2021-10584