Methodology proposal to breakdown electricity prices components in Spain according to the new european regulation

Abstract

One of the biggest challenges that the European Union is facing nowadays is building the way through the integrated energy market. Getting to that ideal market, there’s the need to make some regulatory changes, affecting all the members of the union. Since the end of 2016, when the latest regulation about electricity prices was approved, and enforced in March of 2017, countries face a challenge in changing response mechanisms in order to fulfill the new regulation requirements. Spain has to develop a methodology to respond to the regulation enforced and try to achieve higher transparency levels and reduce the lack of homogeneity that has been observed in the past. The main goal is to get all the countries to respond in a similar way so the tariffs can be easily compared. The Spanish system needs to adapt then its statistical price methodology to inform the price breakdown according to the new European Regulation and taking into account some limitations. This thesis project aims to propose a methodology for Spain to respond in an easy and efficient way to what the European parliament requires, so the Eurostat can present more accurate information and then develop better suited policies in the energy matter. Changes require an adaptation period, hence the need to develop a methodology to estimate the breakdown to ease the estimation for individual clients which normally are complex. The idea is to obtain a replicable methodology to all kind of consumers considering some initial hypothesis. Despite this thesis focuses only on the Spanish case, it is necessary that all the members of the European Union develop its own methodology to respond to the regulation, then, finally the prices will be more harmonized and can be compared among them in a more accurate way.