The electricity bill for households anticipates an increase of over 20% in August compared to the same month of the previous year, driven by skyrocketing electricity prices due to increased demand during heatwaves and by natural gas in a clear upward trend.
Specifically, the electricity bill for an average consumer on the regulated tariff --the so-called PVPC-- has increased by more than 22% so far this month compared to 2025. In the first 21 days of August, the bill stands at 61.33 euros, compared to the 50 euros it represented in the same period of the previous year.
Thus, in the time elapsed in August, the user is already paying more than 11 additional euros compared to the same period in August 2025.
If compared to the same period in July, when the bill had already risen sharply, the accumulated increase in August exceeds 8%, which means about 4.6 euros more.
This price evolution has been calculated for an average consumer profile with a contracted power of 4.4 kilowatts (kW) and an annual consumption of 3,900 kilowatt-hours (kWh), distributed among the different time slots (peak, flat, and valley).
For the cost simulation, a consumption of 30% during peak hours, 20% during flat periods, and the remaining 50% during valley hours has been taken as a reference.
Of the total estimated amount of the bill so far this month, 7.6 euros correspond to the fixed term and 39.63 euros to the energy term. Additionally, 2.44 euros are due to the electricity tax and VAT and equivalent figures amount to 10.64 euros, according to data from the comparator of the National Commission of Markets and Competition (CNMC) consulted by Europa Press.
Until June, there had been some relief in the cost of electricity thanks to the measures of the royal decree approved in March to mitigate the impact of the war in the Middle East. However, since June 1, the VAT reduction to 10% on the electricity bill ceased to apply, returning to the general rate of 21% after the moderation reflected by the Consumer Price Index (CPI).
In the second royal decree approved at the end of June in response to the crisis arising from the Middle East, however, a path of gradual reduction was included until the total elimination of the Tax on the Value of Electricity Production (IVPEE), which goes from 7% to 5% in 2026, to 3.5% in 2027, and to 0% in 2028.
Likewise, in the face of a possible adverse evolution of electricity and gas prices, a safeguard mechanism was established that allows for the reactivation of certain measures if the situation requires it. These actions affect both the Special Tax on Electricity and the VAT that taxes energy products.
Safeguard system to reduce VAT again to 10%
Thus, if a price increase greater than 15% is confirmed, the measures approved in March would be reactivated. That is to say, in the case of the VAT on electricity, natural gas, pellets, and firewood, the rate would be reduced again from 21% to 10%. In turn, the Special Tax on Electricity would decrease again from 5.1% to 0.5%.
The expected increase in August in the electricity bill is closely linked to the strong rise in the price of electricity this month, driven by increased demand due to high temperatures and by gas that is increasingly pushing upwards.
Despite the high contribution of solar generation, in the time slots where this technology is not available, combined cycles gain prominence to meet consumption, thus transferring the cost of gas to the 'pool' price, to which the effect of CO2 is added, sources from the sector indicated to Europa Press.
Specifically, the price of natural gas, conditioned by uncertainty about supply routes in the Middle East, the level of European reserves before winter, and summer electricity demand, has continued to rise in August, placing its quotation in the Spanish Mibgas market above 65 euros per megawatt hour (MWh).
A 'pool' above 120 euros/MWh and its impact on the PVPC
In this context, the wholesale electricity market price, the so-called 'pool', marks a daily average in the first 23 days of August of more than 124 euros/MWh, pointing to its highest level since February 2023.
During that period, the 'pool' has maintained daily average prices above 100 euros/MWh, except on two days. In addition, there have been situations where on the same day minimums close to zero euros, or even negative prices, are recorded during the central hours with the highest solar production, and maximums close to 200 euros/MWh during the night.
The wholesale price is set through an auction in which an algorithm crosses the sales offers from generating companies with the purchase orders, ordering them from lowest to highest price, and the final amount is given by the highest accepted offer. This causes strong variations depending on whether, due to the expected demand, at any moment technologies that use fossil fuels --such as natural gas--, which are more expensive, or cheaper renewable sources come into play.
To the wholesale market price, regulated costs that the consumer assumes for tolls, charges, and adjustments of the electrical system must be added.
Furthermore, the 'pool' no longer determines the final price of electricity for users with regulated tariffs exactly, since from 2024 a new calculation method for the PVPC comes into effect that incorporates a basket of medium and long-term prices to cushion volatility, while maintaining short-term signals that encourage savings and efficient consumption.
Thus, the direct link with the price of the 'pool' has gradually been reduced in recent years to give more weight to the references of the futures markets, so that, from 2026, these forward references already represent 55%.
These spikes in the wholesale market mainly affect households covered by the PVPC, around eight million, since the transfer is practically immediate, while for those in the free market the cost depends on the conditions agreed upon with their supplier.