Voluntary price for the small consumer (PVPC)

Voluntary price for the small consumer (PVPC)

On 1 April, 2014, the new system, the ‘Voluntary Price for Small Consumer (PVPC)’, came into force for determining the cost of energy on the electricity bill.

Royal Decree 216/2014, of 28 March, establishes the methodology for calculating voluntary prices for the small consumer of electrical energy and the legal framework for contracting the PVPC scheme, Red Eléctrica will publish every day at 8.15 p.m. the hourly electricity tariffs that will be applied the following day, pursuant to the provisions set out in the Royal Decree. Said information will be published on the eSios (System Operator Information System) website and via the redOS app for mobile devices.

The hourly price curve is the result of adding the cost of energy production, the payments for transmission and distribution tolls and the charges for the energy consumed. The production cost is made up of the hourly price resulting from the day-ahead energy market, operated by the Iberian Electricity Market Operator (OMIE); the ancillary services managed by Red Eléctrica in its capacity as system operator, in addition to other costs considered under the current legislation.

This new PVPC, in its new 2.0 TD tariff, replaces the three tariffs that existed until 31 May 2021 (the default tariff, 2.0 A; the two-period efficiency tariff, 2.0 DHA, and the electric vehicle tariff, 2.0 DHS) with a single tariff based on hourly discrimination and divided into different consumption periods throughout the day. The tolls and charges applied to the electricity bill varies according to the consumption period as follows:

  • The peak period, when such regulated tolls and charges will be higher.

  • The flat period, when the regulated costs have an intermediate impact.

  • The valley period, when such tolls and charges will be lower.

The regulated costs associated with the new periods are applied to the energy consumed and contracted power capacity of the electricity bill of consumers signed up to the PVPC scheme nationwide, although in the case of the autonomous cities of Ceuta and Melilla, the applicable consumption time bands are displaced slightly.

distribution of the time bands

Another new feature of the new PVPC 2.0 TD invoicing framework is that consumers can choose two different contracted power capacity periods depending on their consumption: one will be applied in the valley period and the other in the peak and flat periods.

Does the new regulation affect all electricity consumers?

No. It directly affects all those consumers signed up to the Voluntary Price for the Small Consumer (PVPC) scheme.

At present, it is estimated that there are around 29 million domestic consumers in Spain (94% of all electricity supply contracts), of which around 11 million are subscribed to the PVPC scheme.

How can I find out if I am included under the PVPC scheme? How can I sign up for the PVPC scheme?

On your electricity bill, in the part that refers to 'Contract details', the type of contract should indicate PVPC if you are subscribed to this type of contract. If it does not appear, you are not covered by this type of tariff, but you can contract it through one of the regulated market reference retailers listed by the National Markets and Competition Commission (CNMC).

I am signed up to the PVPC scheme, how will my electricity bill change?

With the new features adopted in the PVPC 2.0 TD, the electricity bill will continue to contain the same terms as before, with some variations in the format:

  • It will have a fixed amount, for the contracted power, i.e., the maximum amount of instantaneous consumption that can be made without the Power Control Switch tripping. This is also known as contracted power billing. This concept is always the same and is applied in the same way, whether you consume energy or not.

  • In addition, it will have a variable part that reflects the total cost based on the hourly price of the PVPC 2.0 TD for the electricity consumed). depending on the hourly discrimination of each consumption period, which is measured, in the majority of cases, through smart meters. The amount will depend on when and how much is consumed.

  • And lastly, the corresponding taxes.

Can I have more than one contracted power capacity?

As of 1 June 2021, yes, as a modification has been incorporated with regard to the choice of contracted power, allowing each consumer to contract up to two different power-capacity levels with their retail electricity supplier, one for the valley period and another for the peak and flat periods.

How is the PVPC price established for each hour of the day?

This price is based on the result of the day-ahead energy market, operated by the Iberian Electricity Market Operator (OMIE), where, on the one hand, the sales bids of the generators for each hour of the day and, on the other hand, the purchase bids of the market retailers concur. The price resulting from this matching for each hour of the day (known as the pool price) is the main component of the PVPC, to which the costs of ancillary services are added, as well as payments for tolls, charges and other regulated costs whose impact will vary depending on the hourly period in which consumption takes place (peak, flat or valley).

The PVPC price curve published by Red Eléctrica de España through the eSios website and its redOS app breaks down the different price components for each hour of the day.

Why does Red Eléctrica de España provide this information if it does not set the prices?

Among the tasks entrusted to Red Eléctrica de España according to current regulations, is the calculation and daily publication of the hourly prices for energy consumed applicable to consumers covered by the PVPC scheme, as detailed in Royal Decree 216/2014, of 28 March, which sets out the methodology for calculating voluntary prices for the small consumer of electrical energy and the legal framework for contracting the PVPC scheme, so that they can be consulted by any citizen.

In this way, from an independent and neutral position, Red Eléctrica provides information with absolute transparency and makes a tool available to citizens that will help them to manage their electricity consumption more efficiently.

Voluntary price for the small consumer

Red Eléctrica publishes through its website the hourly pricing schedules of ‘energy used’.