Can you guess where electricity is cheapest?

Published: Tue 12 Nov 2013
A blog entry by Sasha Bermann

Contributed by:

Sasha Bermann
Chief Dissemination Officer
VaasaETT

Sasha Bermann's Blog

 
by Christophe Dromacque, Head of Research, VaasaETT Global Energy Think Tank
 
The figure below shows the end-user price of electricity adjusted for purchasing power in 23 European capital cities as of October 1st, 2013. It is taken from the Household Energy Price Index (HEPI); the monthly price survey by Energie-Control Austria, the MEKH and VaasaETT. In my opinion, several interesting findings arise:
 
First of all, prices in Europe vary greatly depending on where a customer lives. This is true even for countries with similar standards of living, similar climates and similar consumption levels. The price per kWh of electricity varies by a ratio of 2.5 between the cheapest and the most expensive city.

Perhaps more surprising is the fact that the cheapest electricity is not to be found where most of us would expect it to be. When adjusted for purchasing power in each country, the lowest residential prices are to be found in Helsinki (Finland), Paris (France), Belgrade (Serbia), Stockholm (Sweden) and Luxembourg City (Luxembourg) in that order. These markets can hardly be more different from one another. For instance; Finland and Sweden have relatively high consumption levels, customer switching is relatively high, prices are free, DSOs operate at the regional level (hence a great number of them) and there is no massively dominant player. France has regulated prices, customer switching remains low, and there is a major dominant supplier at the national level (EDF).
 

My final comment relates to the recent mayhem in Britain over rising energy price. Let me make something clear, I am not minimising the impact rising energy prices have on vulnerable households’ budget and realise these can be very painful for many. I am also aware of the conclusions of the recent report “Energy prices, profits and poverty.” by the ECCC. When I say prices in GB are not particularly high, price increases in GB not particularly sharp, a typical British household does not spend more on electricity than another typical European household and British customers can achieve more savings than most by shopping around for better deals, this is only based on cold facts (you may refer to our HEPI annual report for more info) and my only goal is to put the GB context into a wider European one. The question then becomes, why critics of the energy industry are so much more vocal in GB than in other European countries where electricity prices are even more of a burden to households?
 

 

 

Residential electricity prices including taxes at PPS (October 2013)
 
If you would like to know more about the latest developments in residential energy prices, visit our project webpage at www.energypriceindex.com and subscribe to the free monthly update of the HEPI index for Europe.