Energy prices in the EU - Statistics & Facts

Energy prices are largely determined by production volumes of raw materials and their demand. In 2020, an unprecedented drop in demand following the COVID-19 outbreak caused energy commodity prices to plummet to record lows. Roughly a year later, with an energy supply shortage hitting the world as the global ‘post-pandemic’ economic recovery gained pace, natural gas and electricity prices in the European Union skyrocketed to record levels and are expected to keep rising. Nevertheless, other factors – such as taxes and distribution and maintenance costs – also impact energy prices within the EU.

Electricity prices

Until the coronavirus-induced slump recorded in 2020, household electricity prices in the EU had been continually increasing for three years. Germany records the highest household electricity price in the region. In 2020, German households paid on average between 30- and 33-euro cents per kilowatt hour, depending on their annual consumption. It was followed by Denmark. The elevated household electricity prices in these two countries, in comparison to the rest of the EU, are mainly associated with high taxes. As of October 2021, despite the rise in energy commodities’ prices registered that year, energy taxes and VAT combined accounted for more than 50 percent of the end-user electricity prices in Berlin and Copenhagen.

Industrial customers typically have to pay less for electricity than residential users, as electricity can be transported at higher voltages, thus reducing transmission costs. Further, for large industrial consumers, prices are often negotiated at wholesale, rather than retail markets. In 2020, Sweden had some of the lowest electricity prices for industries in the EU.

Natural gas prices

Much like electricity prices, household natural gas prices in the EU were consistently higher than industrial prices. As natural gas is one of the leading sources of electricity in the EU, its price strongly influences the price of electricity in the region. In 2020, Sweden, the Netherlands, and Portugal were amongst the European countries with the highest household natural gas prices. The tax contribution was also behind the high prices in the latter two countries. Meanwhile, in Sweden, distribution costs exerted the highest influence.

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