After Russia’s total invasion of Ukraine, prices for electricity and natural gas soared but have since been falling. Eurostat figures show a significant disparity between energy prices in European countries.
The rise in energy prices has a big impact on households. Some countries have frozen household support measures, leading to higher consumer prices. But the impact is not the same everywhere. Although energy supply shortages are being felt across Europe, the impact on electricity prices varies from country to country.
- In the first half of 2023, average household electricity prices in the EU rose from €25.3 to €28.9 per 100 kWh compared with the same period in 2022.
- Average natural gas prices rose from €8.6 to €11.9 per 100 kWh in the same period, the highest prices ever recorded by Eurostat.
- Belgium, Romania, and Germany had the highest pre-tax electricity prices in the EU, while the Netherlands had the highest electricity and gas prices.
The background to the price increases
In addition to geopolitical factors, there are other reasons for the price increases. The global energy crisis and increased demand in the post-pandemic economic recovery have contributed to the rise in energy prices. Increases in natural gas and coal prices and a decline in renewable energy production due to low wind speeds and drought have also played a role.
How the diverse energy mix leads to price differences
In the first half of 2023, average household electricity prices in the EU rose from €25.3 to €28.9 per 100 kWh compared with the same period in 2022. Average natural gas prices rose from €8.6 to €11.9 per 100 kWh in the same period, the highest prices ever recorded by Eurostat.
The Netherlands had the highest electricity and gas prices in the EU. Natural gas prices rose more than 100 percent in several countries, including Latvia, Romania, and Austria. Each country’s energy mix plays a crucial role in energy prices. For example, electricity prices in France were significantly lower (€23.2 per 100 kWh) due to its large share of nuclear power. Turkey, an EU candidate country, had the lowest electricity prices (€8.4 per 100 kWh).
In Sweden, where hydro and nuclear power account for a large share of electricity production, the price increase was less pronounced. In contrast, Italy, the EU’s largest net importer of electricity, recorded the highest price in the region, surpassing even €540 per megawatt hour in August 2022.
The future of energy prices in Europe
Electricity and natural gas prices are now falling, but they are still higher than in the second half of 2022. However, the energy market remains unpredictable. Geopolitical tensions and the global energy crisis may cause further price fluctuations. Moreover, the transition to renewable energy sources, which is needed to combat climate change, will also affect energy prices.
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