The price of electricity in the Spanish market has reached its all-time highs, and and it's likely to continue to rise. Consumer concern is increasing, as Electricity bills in 2021 are being the most expensive in history.

The increase in electricity is due to the increase in emission rights, the revaluation of natural gas in international markets and the increase in electricity demand. But then, What is the most appropriate rate to make your electricity bills cheaper? In this article, we give you the keys.

What is cheaper, the free market or the regulated one in electricity?

First, it is important to understand that in order to hire the cheaper electricity rate in our supply, it is vital to make a comparison between the free market and the regulated market. What are the differences between the free and the regulated market? We'll tell you about them.

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- Regulated market

The regulated market rate or Voluntary Price for Small Consumers (PVPC) sets the price based on market supply and demand, and the price is set by the State. It is a rate that consists of three periods (peak, flat and valley) for electricity consumption. In addition, it offers 24 prices per day, which means a price for each hour of the day.

In Spain, there are eight retailers that offer this rate:

• Endesa XXI
• Curenergy
• Gas & Power
• Baser COR
• Régsiti
• CHC COR
• Teramelcor
• Cauta XXI Energy

There are no discounts on regulated market rates except for those who have a Social Bonus (aid granted to vulnerable consumers) and to be able to hire it, the power must be less than or equal to 10 kW.

In the regulated market, there are upward and downward price changes, depending on energy demand. Now, the variation has been increasing, and the high prices directly affect consumers who have contracted a rate in the PVPC market.

However, consumers in the free market are not exempt from this increase. Why? We'll explain it to you below.

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- Free market

Unlike the regulated market, Free market rates are set by marketers. 

After the rise in electricity, electricity companies in the free market have had to change their prices. As a result, now each marketer has different offers.

Therefore, in the free market consumers can choose between different companies, prices, offers (fixed price, time discrimination and personalized offers). Regardless of the electrical power they have contracted at their home, they will be able to access any offer, except for the Social Bonus, since it is necessary to have the contracted rate of the regulated market.

Which electricity rate is better, PVPC or Mercado Libre?

Despite the fact that consumers in the free market have a greater variety of services and do not have to know the schedules (peak, plain and valley), The price of electricity had historically been more expensive in the free market than in the regulated market. But now, after the rise of the light, the same cannot be said. The PVPC market is currently more expensive.

What do we recommend so that the price of your electricity bills does not increase? Analyse your specific case and evaluate, contract a rate in the free market with the most competitive prices, adapting the contracted rate to your needs and schedules. Since, in the future, the price you will pay will depend on the value of light in the PVPC market.