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Endesa - Electricity, Gas, People

How do the new regulatory measures from 1 January affect electricity bills?

The Government has published a series of measures that will directly affect your electricity bill from 1 January.

Customers with PVPC tariffs (Voluntary Price to Small Consumers) belonging to the regulated market are affected by the regulatory changes contained in RDL 29/2021 published in the BOE (Official State Gazette) on 22/12/2021 and these tariffs are calculated every day and every hour based on the daily energy market.

How do these changes affect your electricity supply?

Taxes on your electricity bill:

Since these changes came into force on 26/06/2021 and until 30/04/2022 it is expected that:

1. VAT will be reduced to 10% under the following circumstances:

  • The supply is for a contracted power equal to or less than 10 kW (the vast majority of households). You can check your contracted power in your client area.
  • Always provided the market price for the previous calendar month is above €45/MWh. You can see developments in market prices here.
  • Only applicable to bills issued after 26 June 2021.

This means the VAT on electricity goes from 21% to 10% for electricity supplies when the contracted power is equal to or less than 10 kW and provided that market prices remain above €45/MWh.

2. The general rate for the Special Tax on electricity was reduced to 0.5% (this tax previously exceeded 5%).

Furthermore, since 01/01/2022 the charges and other regulated items in the electricity bill have been increased as follows:

Charges and other regulated items in your electricity bill:

  • There has been an increase in electricity charges. The amount for this item represents approximately 20% of your bill.
  • The government reduced the charges and other regulated concepts by 96% on 16 September. From 1 January, the Government decided to modify this reduction that will go from 96% to 31%*.

*Calculated for an average customer on the total price (Total Energy + Total Power, before taxes). This percentage may vary depending on your consumption profile.

infographic of the necessary steps to know what VAT is applied to you

How do you know if reduced VAT is applied to you?

1. Have the electricity bill you want to check to hand.

Remenber that the VAT reduction only applies to electricity supply bills issued since June 26, 2021.

2. Check the contracted power of the supply indicated on the bill.

It is indicated in the "Contract Data" section. This contracted power must be equal to or less than 10 Kilowatts.

3. Check the billing date.

To know wheter you can apply the VAT rate of 10%, check the billing and the date and consult the price set by the market for that calendar month.

4. Check the folowing table for the VAT rate that applies.

VAT applicable from June 26, 2021
Hired electricity power Energy price
> €45/MWh
Energy price
< €45/MWh
Electricity power ≤ 10 kW VAT 10% VAT 21%
Electricity power > 10 kW VAT 21% VAT 21%
Rate Subsidy Beneficiary VAT 10% VAT 10%

The vast majority of Spanish households fall within this range (≤10kW).

If I qualify for the Social Rate, how do these changes affect me?

The holders of electricity supply contracts who qualify for Social Rate for electricity and whose status has been recognised as severely vulnerable or severely vulnerable at risk of social exclusion (in accordance with the provisions established in Royal Decree 897/2017) will benefit from the decrease in VAT.

For this category of client, the VAT on electricity will remain at 10% instead of 21%, regardless of the market price and the contracted power.

Which items on the bill are affected by the reduction of VAT to 10%?

If your contracted power is equal to or less than 10 kW and the criteria for market prices are met, the VAT that you will have to pay on the bills issued after 26 June will be 10% on the following items: access tariffs, energy consumption and meter rental.

There are other items on the bill such as services, connection charges, grid connection charges, etc., to which the 21% VAT rate will continue to apply.

Why is the price of electricity increasing?

The price of electricity is increasing mainly for two reasons:

  • The rise in the price of gas.
  • The rise in the prices of CO2 emission rights.

For customers who are in the regulated market, the price of electricity is calculated in accordance with the PVPC (Voluntary Price to the Small Consumer) that is calculated according to the price registered by the market every day and every hour, so it is affected by variations in this market.

How long will the new VAT rate last?

The new VAT rate on electricity is expected to last until April 30, 2022, providing market prices remain above €45/MWh.

Does it also affect other supplies such as gas and services?

No, these changes are only applicable to the electricity supply.


Our network of channels is at your disposal if you need further information. If you prefer, any query you may have can be answered without you leaving your home via our Video Support Service, on which specialised agents will be delighted to answer your questions.