Final demand: IRE

Decreased consumption in all sectors, with a slight recovery at the end of the year.

Evolution of the IRE during 2023 was not immune to geopolitical instability, as the economy in the Eurozone slowed down.

In 2023, the overall IRE was 5.2 % lower than in the previous year, a smaller reduction than that experienced in 2022. The index stands at 107.7, which is lower than the figure for 2022, 113.6.

This decline is caused by a combination of all the components of the index. The situation has developed as follows:

• Industrial activity fell by 5.8 %, showing a sharp decline until August, before picking up again, even reaching positive values in the last two months.
• The services sector shows a very similar negative impact, with a decline of 5.7 %, especially pronounced in the first months of the year.
• The grouping of other sectors of activity recorded a slight decrease, with a variation of 0.5 % compared to the previous year, resulting in the smallest decrease.

Breakdown of the General IRE

Annual evolution of the variation in gross IRE

Temperatures have had a negative impact on evolution the index, reducing it by 0.3 percentage points. By major groupings, the most significant impact has occurred in the services sector, where temperatures deducted 0.9 points from evolution of the IRE.

In 2023, both the composition of the calendar and changes in temperatures had a negative impact on evolution of the IRE.

Temperatures had a negative impact on evolution of the index, reducing it by 0.3 percentage points, especially in the months of May and July, where temperatures reduced the index by 2.3 and 2.1 percentage points, respectively. Meanwhile, in April and August the IRE increased by 1.1 and 1 percentage point, respectively. By major groupings, the most significant impact concerned the services sector, where temperatures subtracted 0.9 points from evolution of the index, followed by other sectors of activity, where temperatures made a negative contribution of 0.5 points, and finally industry, which deducted 0.1 points.

IRE: Breakdown of the variation in 2023

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Monthly changes in the adjusted index were negative until October, turning to slightly positive values in the last two months of the year. The rate of decline slowed down in September and October, but it should be taken into account that, since August 2022, there has been a major slowdown in the economy.

The beginning of 2023 saw a slowdown in the economy, a trend that became more pronounced back in August 2022 when, motivated by global inflation, the major banks implemented measures to contain it until almost the end of 2023.

The adjusted IRE has been negative since the start of the year, although slightly better than in the second half of 2022. This negative trend was particularly significant until August, before becoming more moderate during September and October, reaching slightly positive values in the last two months of the year. The decline in March was also smaller compared to that of the previous year, which was due to the geopolitical crisis in Ukraine. It should be noted that the exchange rates reached double digits in the last five months of 2022, the lowest values recorded after those registered during the pandemic.

Regarding the monthly change in the adjusted index for the two main sector groupings (industry and services), it is important to highlight that, while all sectors experienced a more significant decline in the first months of the year, the services sector suffered a greater fall in the first four months of the year, due to the scarcity of raw materials and high energy prices. Additionally, the difference with respect to the previous year for the services sector was also marked by the sharp increase experienced , brought about by the easing of restrictions, which particularly impacted sectors involving higher levels of personal interaction. The industry sector experienced an easing of the decline in September and October, even achieving slightly positive values in November. In December, however, the slowdown in the economy brought about by the geopolitical crisis in the Middle East and the potential shortage of raw materials caused by the new crisis in the Suez Canal caused a new regression in December. The services sector, which experienced a steep decline in the first months of the year, recovered slightly with the arrival of summer.

Monthly evolution of the variation in adjusted IRE

At the peak hour of the day of year's maximum hourly demand, the residential sector accounted for 39 % of consumption, while the industry sector of the IRE accounted for 20 % of consumption, the large services sector (IRE) stood at 10 % and small businesses and services stood at 16 %.

At the peak hour of the day of the year's maximum hourly demand, the residential sector accounted for 39 % of consumption, while the industry sector of the IRE accounted for 20 % of consumption, the large services sector (IRE) stood at 10 %, and small businesses and services stood at 16 %. Throughout the peak day, the greatest share of the industrial sectors was in the early hours of the morning, but it is especially between 4 and 5 a.m. that it reaches a maximum share of electricity demand at busbars of almost 33 %, while for large services, the most important time period is between 1 p.m. and 18 p.m., with shares of consumption of around 12 %.

Breakdown of maximum hourly electricity demand in the winter, 24 January 2023

Breakdown of maximum hourly electricity demand in the summer, 19 July 2023