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Euronews
24-05-2025
- Business
- Euronews
Energy bills across Europe: What share of the cost is made up of tax?
Rising energy prices after Russia's invasion of Ukraine hit households hard, especially low-income families. Although prices have stabilised somewhat, energy bills are still a burden for many. Taxes make up a large part of gas and electricity costs, and these vary widely across Europe. Some countries offer subsidies or allowances to support households. In those cases, taxes can even appear as negative values. So, how much of your energy bill goes to taxes — including energy taxes, levies, and VAT? In which countries do people pay the most in total taxes? And where do governments step in with subsidies or support schemes? The Household Energy Price Index (HEPI), compiled by Energie-Control Austria, MEKH, and VaasaETT, tracks residential electricity and gas prices in European capital cities. Besides energy and distribution costs, the breakdown shows energy taxes and VAT. As of April 2024, the average share of total taxes in household electricity prices across EU capitals was 22% — made up of 8% energy taxes and 14% VAT. This share ranged from -26% in Amsterdam to 49% in Copenhagen, followed by 41% in Stockholm. The average for EU capitals stands at 22%. In Amsterdam, energy taxes stood at -43%, while VAT was 17%, resulting in a significant negative overall tax share. Excluding this effect, VAT accounts for 17% of the price breakdown. According to the HEPI report, since January 2020, a typical consumer in Amsterdam pays zero energy tax due to the increased amount of tax credit, which exceeds the indicated energy tax amount. On the contrary, they receive a refund on the exceeding tax credit amount. The goal is to encourage electrification and a shift away from gas heating and appliances. A similar case is seen in Luxembourg City, where energy tax is -13% and VAT is 7%. The policy there aims to stabilise prices at 2022 levels. In Valletta, Nicosia, and Dublin, the share of taxes in electricity bills is also relatively low — 11% or less. Besides the two Nordic capitals, the share of total taxes exceeds 30% in several other cities, including Brussels (37%), Berlin (34%), Oslo (33%), and both Madrid and Helsinki (32%). For residential end-user gas prices, the average share of taxes across EU capitals is 28%, which is higher than for electricity. It ranges 5% in Zagreb to 49% in Amsterdam. In the Dutch capital, energy tax for a residential natural gas user makes up around 32% of the end-user price. Residents in Berlin (40%), Vienna (32%), Rome and Stockholm (both 31%), and Paris (30%) face the highest total gas taxes, after Amsterdam. In contrast, following the Croatian capital, Athens (9%), Belgrade (9%), and London (11%) recorded the lowest overall tax shares in residential gas prices. In Vilnius, a typical household receives a tax refund on energy, resulting in a negative energy tax share of -5%. 'Energy taxes depend on national policies, environmental plans and different market structures in general,' Rafaila Grigoriou, HEPI project manager & head of VaasaETT's Greek office, and Ioannis Korras, senior energy market analyst at VaasaETT, told Euronews Business. For example, they noted that Denmark has utilised high energy taxes as a tool for the green energy transition, subsidising renewable energy systems (RES) investment and promoting energy efficiency, making the country a leader in wind energy. The role of national policies in energy taxation is especially clear in some cases. Grigoriou and Korras emphasised that consumers in Amsterdam pay the highest taxes on natural gas in Europe, driven by a national climate policy aimed at reducing gas consumption. On the contrary, households receive a significant tax rebate on their electricity bills. 'This is intended to incentivise a shift away from gas heating and promote electrification,' they added. When comparing cities or countries, it's important to distinguish between the share of taxes in energy bills and the actual amount paid. These are different indicators, as the total tax amount depends on the underlying energy price. For example, the tax share for electricity is 21% in both Rome and Budapest. However, this doesn't mean consumers pay the same in absolute terms. In Budapest, 21% equals 1.92 c€/kWh, while in Rome, it amounts to 6.8 c€/kWh — a significant difference. Household end-user electricity and gas prices differ significantly across Europe. According to HEPI, in April 2025, electricity prices ranged from 9.1 c€/kWh in Budapest to 40.4 c€/kWh in Berlin. The gas prices varied from 2.5c€/kWh in Budapest to 34.1 c€/kWh in Stockholm. When comparing energy prices, it's also important to consider purchasing power standards (PPS). Our article, "Electricity and Gas Prices Across Europe," takes a closer look at prices both in nominal terms and PPS-adjusted values, and explains why these can differ significantly across countries.
Yahoo
15-05-2025
- Business
- Yahoo
Where the grid hits hardest: Energy distribution costs across Europe compared
Energy bills are a major part of living costs. Energy prices vary widely across Europe. Bills include not just energy costs, but also taxes and distribution fees. The share of electricity and gas bills that goes to distribution, essentially what you pay to use the grid, also differs from country to country. So, how much of your energy bill goes to distribution companies in Europe? And which countries pay the most for distribution? Also known as network charges, this portion of the bill mostly includes both transmission and distribution costs. The Household Energy Price Index (HEPI), compiled by Energie-Control Austria, MEKH, and VaasaETT, provides a detailed breakdown of residential end-user electricity and gas prices. The breakdown includes four components: energy, distribution, energy taxes, and VAT. As of April 2024, the share of distribution in household electricity prices ranged from 11% in Nicosia to 65% in Budapest, closely followed by Amsterdam (60%). However, in Amsterdam, the distribution share would drop to 39% if the tax refund were not considered. The capital cities of Hungary and the Netherlands stand out as clear outliers, with more than half of the electricity bill going to distribution. The EU-27 average was 28%. Other high-share cities include Luxembourg City (46%), Podgorica (43%), and Bucharest (42%). Many Central and Eastern European cities such as Kyiv, Vilnius, Riga, Zagreb, Belgrade, and Warsaw have distribution shares well above the EU average. Western cities like Paris (35%) and Lisbon (34%) also fall into the higher group. The Nordic capitals (Helsinki, Oslo, Stockholm, Copenhagen) tend to have lower shares (between 17%–23%). Southern Europe shows some of the lowest distribution shares, including Athens (15%) and Rome (15%). Cities like Berlin (29%), Vienna (30%), Tallinn (29%), Dublin (30%), and Prague (31%) are close to the EU average, showing moderate distribution cost impact. Among the capitals of Europe's top five economies, London and Madrid had the lowest distribution share at 18%. On average across the EU capital cities, the distribution share is slightly lower in gas prices (23%) than in electricity prices (28%). The distribution share in residential end-user gas prices ranged from 10% in Kyiv to 43% in Bern. In addition to Bern, the distribution share exceeded one-third of gas bills in Sofia (37%) and Bratislava (34%). In Dublin, it came close to that level at 32%. Among the EU capitals, Amsterdam had the lowest distribution share at 13%, followed by Zagreb and Tallinn, both at 15%. The variation in gas distribution shares among Europe's top five economies is smaller compared to electricity. London and Madrid had the highest shares at 22%, slightly below the EU average, followed by Rome at 21%. In Paris and Berlin, the shares were even lower—17% and 16%, respectively. Rafaila Grigoriou, HEPI project manager & head of VaasaETT's Greek office, and Ioannis Korras, senior energy market analyst at VaasaETT explained that network costs are determined based on local requirements and national strategies for the development and upgrading of distribution and transmission networks. A significant portion of national network investment costs is passed on to end-user bills through network charges. 'Disparities among markets are primarily driven by their investment plans and are related to electrification demand, level of RES penetration, distributed generation, the age of the network infrastructure etc.' Grigoriou and Korras told Euronews. VaasaETT experts also noted that the comparison of network cost shares in total bills between countries may not always accurately reflect the true significance of network costs in some cases. This is especially true in cases where regulations or support schemes affect the energy component of the bill. Cities like Budapest and Bucharest clearly illustrate this effect. In Budapest, the electricity distribution share is 65%, equal to 5.94 c€/kWh. In contrast, Bucharest has a lower distribution share of 42%, but the actual cost is higher at 6.75 c€/kWh. This is due to differences in end-user electricity prices: 9.1 c€/kWh in Budapest versus 16.1 c€/kWh in Bucharest. The same pattern applies to gas distribution in these cities as well. The breakdown of energy bills can vary over time or during extraordinary situations, depending on the country. The Russian invasion of Ukraine in 2022 is a clear example of such a disruption, which led to sharp changes in energy prices. 'Since the beginning of the energy crisis, there has been a significant number of temporary support measures that involved the reduction or abolishment of network charges or taxes in European countries,' Rafaila Grigoriou told. 'Those have affected both electricity and gas bills and a small number of those are in fact still active in some markets. Slovenia is an example of this for residential electricity customers.' she added. While this article does not aim to analyse or compare final consumer energy prices across Europe in depth, providing these figures still offers valuable context. As of April 2025, household end-user electricity prices ranged from 9.1 € cents per kWh in Budapest to 40.4 c€/kWh in Berlin according to the HEPI. The EU-27 average was 24.7 c€/kWh. Among EU capital cities, gas prices in the same period ranged from 2.5 c€/kWh in Budapest to 34.1 c€/kWh in Stockholm, with an EU average of 11.1 c€/kWh. Euronews compared and analysed residential end-user electricity and gas prices across Europe as of January 2025, examining both nominal prices and those adjusted for purchasing power. The article entitled 'Electricity and Gas Prices Across Europe' also explores the factors driving the differences in energy prices across European countries.
Euronews
15-05-2025
- Business
- Euronews
Europe's energy bills unplugged: Who pays the most to use the grid?
Energy bills are a major part of living costs. Energy prices vary widely across Europe. Bills include not just energy costs, but also taxes and distribution fees. The share of electricity and gas bills that goes to distribution, essentially what you pay to use the grid, also differs from country to country. So, how much of your energy bill goes to distribution companies in Europe? And which countries pay the most for distribution? Also known as network charges, this portion of the bill mostly includes both transmission and distribution costs. The Household Energy Price Index (HEPI), compiled by Energie-Control Austria, MEKH, and VaasaETT, provides a detailed breakdown of residential end-user electricity and gas prices. The breakdown includes four components: energy, distribution, energy taxes, and VAT. As of April 2024, the share of distribution in household electricity prices ranged from 11% in Nicosia to 65% in Budapest, closely followed by Amsterdam (60%). However, in Amsterdam, the distribution share would drop to 39% if the tax refund were not considered. The capital cities of Hungary and the Netherlands stand out as clear outliers, with more than half of the electricity bill going to distribution. The EU-27 average was 28%. Other high-share cities include Luxembourg City (46%), Podgorica (43%), and Bucharest (42%). Many Central and Eastern European cities such as Kyiv, Vilnius, Riga, Zagreb, Belgrade, and Warsaw have distribution shares well above the EU average. Western cities like Paris (35%) and Lisbon (34%) also fall into the higher group. The Nordic capitals (Helsinki, Oslo, Stockholm, Copenhagen) tend to have lower shares (between 17%–23%). Southern Europe shows some of the lowest distribution shares, including Athens (15%) and Rome (15%). Cities like Berlin (29%), Vienna (30%), Tallinn (29%), Dublin (30%), and Prague (31%) are close to the EU average, showing moderate distribution cost impact. Among the capitals of Europe's top five economies, London and Madrid had the lowest distribution share at 18%. On average across the EU capital cities, the distribution share is slightly lower in gas prices (23%) than in electricity prices (28%). The distribution share in residential end-user gas prices ranged from 10% in Kyiv to 43% in Bern. In addition to Bern, the distribution share exceeded one-third of gas bills in Sofia (37%) and Bratislava (34%). In Dublin, it came close to that level at 32%. Among the EU capitals, Amsterdam had the lowest distribution share at 13%, followed by Zagreb and Tallinn, both at 15%. The variation in gas distribution shares among Europe's top five economies is smaller compared to electricity. London and Madrid had the highest shares at 22%, slightly below the EU average, followed by Rome at 21%. In Paris and Berlin, the shares were even lower—17% and 16%, respectively. Rafaila Grigoriou, HEPI project manager & head of VaasaETT's Greek office, and Ioannis Korras, senior energy market analyst at VaasaETT explained that network costs are determined based on local requirements and national strategies for the development and upgrading of distribution and transmission networks. A significant portion of national network investment costs is passed on to end-user bills through network charges. 'Disparities among markets are primarily driven by their investment plans and are related to electrification demand, level of RES penetration, distributed generation, the age of the network infrastructure etc.' Grigoriou and Korras told Euronews. VaasaETT experts also noted that the comparison of network cost shares in total bills between countries may not always accurately reflect the true significance of network costs in some cases. This is especially true in cases where regulations or support schemes affect the energy component of the bill. Cities like Budapest and Bucharest clearly illustrate this effect. In Budapest, the electricity distribution share is 65%, equal to 5.94 c€/kWh. In contrast, Bucharest has a lower distribution share of 42%, but the actual cost is higher at 6.75 c€/kWh. This is due to differences in end-user electricity prices: 9.1 c€/kWh in Budapest versus 16.1 c€/kWh in Bucharest. The same pattern applies to gas distribution in these cities as well. The breakdown of energy bills can vary over time or during extraordinary situations, depending on the country. The Russian invasion of Ukraine in 2022 is a clear example of such a disruption, which led to sharp changes in energy prices. 'Since the beginning of the energy crisis, there has been a significant number of temporary support measures that involved the reduction or abolishment of network charges or taxes in European countries,' Rafaila Grigoriou told. 'Those have affected both electricity and gas bills and a small number of those are in fact still active in some markets. Slovenia is an example of this for residential electricity customers.' she added. While this article does not aim to analyse or compare final consumer energy prices across Europe in depth, providing these figures still offers valuable context. As of April 2025, household end-user electricity prices ranged from 9.1 € cents per kWh in Budapest to 40.4 c€/kWh in Berlin according to the HEPI. The EU-27 average was 24.7 c€/kWh. Among EU capital cities, gas prices in the same period ranged from 2.5 c€/kWh in Budapest to 34.1 c€/kWh in Stockholm, with an EU average of 11.1 c€/kWh. Euronews compared and analysed residential end-user electricity and gas prices across Europe as of January 2025, examining both nominal prices and those adjusted for purchasing power. The article entitled 'Electricity and Gas Prices Across Europe' also explores the factors driving the differences in energy prices across European countries.
Yahoo
24-02-2025
- Business
- Yahoo
Three years on: How Russia's invasion reshaped energy prices across Europe
Three years ago, on 24 February, Russia invaded Ukraine. The war is still ongoing and has had a significant impact on energy prices, with the share of Russia's pipeline gas in EU imports dropping from over 40% in 2021 to about 8% in 2023, according to the European Council. A massive Russian military build-up and escalating hostile rhetoric in 2021, signalling a planned attack on Ukraine, had already triggered a sharp surge in energy commodity prices throughout the year. While European governments implemented various policies to ease the impact on households, household energy prices continued to rise gradually throughout 2021 and surged further following the invasion. Selecting a baseline for price comparisons is challenging. To better illustrate the impact of price fluctuations on households, we use multiple comparisons based on the Household Energy Price Index (HEPI), compiled by Energie-Control Austria, MEKH, and VaasaETT. The "Pre-Invasion One-Year Average" represents the 12-month period from February 2021 to January 2022, while the "Three-Year Post-Invasion Average" covers from February 2022 to January 2025. During the pre-invasion period, the average residential end-user electricity price in EU capitals was 20.5 c€/kWh, rising to 26.5 c€/kWh in the post-invasion period - an increase of 29.5%. During this period, Amsterdam saw the highest increase, with electricity prices rising by 76%, followed by Rome (74%) and Vilnius (64%). "Fossil fuel-dependent markets like the Netherlands faced higher volatility, highlighting the role of energy diversification and regulatory frameworks in price stability," Ivana Rogulj, Wolfgang Eichhammer, and Stavros Spyridakos, senior experts at the Institute for European Energy and Climate Policy (IEECP), told Euronews Business. Dr. Yousef Alshammari, President of the London College of Energy Economics, noted that natural gas accounts for 45% of Italy's electricity mix, while renewables contribute no more than 30%. Among the capitals of Europe's top five economies, London (47%) recorded the second-largest increase after Rome. Paris (30%) was slightly above the EU average (29.5%), while Berlin (19%) experienced a more moderate rise. In contrast, Madrid saw a slight decline (0.4%) in electricity prices between the pre-invasion and post-invasion periods. Regarding why households in Spain have been significantly less affected by the surge in electricity prices, Rogulj, Eichhammer and Spyridakos explained: "Spain's significant wind, solar, and hydro capacity reduced reliance on fossil fuels, limiting exposure to external price shocks. "Spain's regulated electricity tariff (PVPC) balanced price volatility by linking retail electricity prices to longer-term wholesale market averages, protecting consumers from extreme short-term fluctuations", they added. When non-EU capitals are included, Oslo recorded the steepest decline, with electricity prices falling by 10%, followed by Budapest (-9%) and Bucharest (-8%). These cities stand out as exceptions to the overall trend of rising electricity prices across Europe. The changes are in euros, not local currencies, which may affect the results. These results indicate that Western and Northern Europe experienced the sharpest electricity price hikes, while Baltic and Eastern European capitals also saw significant increases. In contrast, Southern Europe faced more moderate price changes. IEECP experts Rogulj, Eichhammer, and Spyridakos stated: "Nordic countries benefit from renewable electricity production from hydropower, geothermal, and wind, reducing exposure to fossil fuel price volatility." Comparing electricity prices from early 2021, when the market was more stable and before tensions between Russia and Ukraine escalated, to January 2025, reveals significant increases. Households in EU capitals paid 36% more for electricity in January 2025 compared to January 2021. When Kyiv is excluded from the analysis, Amsterdam records the highest increase, with electricity prices rising by 89% over this four-year period. Significant increases were also observed in Vilnius (81%), Brussels (77%), and Bern (76%). On the other hand, Budapest (-13%) was the only capital where prices declined. Among the top five economies, London saw the highest surge, with electricity prices rising by 66%, followed by Rome (60%) and Paris (45%). If we compare January 2022 to January 2025, household electricity prices, including taxes, increased by only 3.4% on average across EU capitals. In the EU, the highest increase was recorded in Vilnius (53%), followed by Paris (34%). In the non-EU capital Bern, prices rose by 69% over the same period. Several cities experienced notable declines in electricity prices over the past three years. Oslo saw the sharpest drop at 25%, followed by London (-21%) and Bucharest (-20%) and Copenhagen (-20%). As the line chart below illustrates, electricity prices fluctuated significantly in the capitals of the top five economies following Russia's invasion of Ukraine. Over the past four years, Rome experienced the highest recorded level, reaching 68.7 c€/kWh in October 2022, compared to 43.7 c€/kWh in July 2022. Similarly, London's electricity prices peaked at 64.2 c€/kWh in August 2022, before dropping to 39.5 c€/kWh the following month. Paris had the most stable prices over this period. We only have gas price data for October 2021 before the invasion, while the full dataset is available from January 2022 onward. This means we cannot calculate a pre-invasion average, but the available data still provides valuable insights into price trends. In October 2021, the residential end-user gas price in EU capitals averaged 8.5 c€/kWh. By January 2022, it had already increased to 11.3 c€/kWh, before peaking at 16.5 c€/kWh in September 2022, the highest level recorded in the past three years. As of January 2025, prices had declined to 11.1 c€/kWh, slightly below January 2022 levels, yet still significantly higher than pre-invasion prices. Stockholm recorded the highest three-year post-invasion average (February 2022– January 2025) at 28.7 c€/kWh, followed by Amsterdam at 21.6 c€/kWh. The nature of Sweden's gas market plays a crucial role in this dynamic. Throughout 2022, households in Amsterdam were hit the hardest by surging gas prices. That year, the annual average gas price in Amsterdam reached 31.0 c€/kWh, significantly higher than Stockholm's 23.9 c€/kWh, despite Stockholm leading in the three-year average. Rogulj, Eichhammer, and Spyridakos from the IEECP also attributed rising gas prices in the Netherlands to the suspension of production at the Groningen gas field due to earthquake risks. Budapest (2.6 c€/kWh), Belgrade (4.1 c€/kWh), and Zagreb (4.7 c€/kWh) recorded the lowest three-year average gas prices. In Prague, the three-year average gas price was 110% higher than in October 2021, followed by Berlin (97%), Dublin (86%) and Amsterdam (77%), while the EU average stood at +37%. Dr. Cyril Stephanos from acatech, the National Academy of Science and Engineering, pointed out that Germany had no operational LNG terminals at the time of Russia's attack on Ukraine. "Both Germany and Austria have been highly dependent on natural gas imports from Russia", he said. These have been partially substituted by increased supplies from Norway and through the LNG market. "However, LNG imports tend to be more expensive than pipeline gas due to the additional costs of compression, transportation, and decompression", he added. IEECP experts also emphasised that seeking costly alternatives led to sharp price hikes. In contrast, Budapest (-26%) and Bucharest (-9%) saw lower gas prices compared to October 2021. Despite recent price stabilisation, gas prices in EU capitals were still 31% higher in January 2025 compared to October 2021. Warsaw saw the sharpest increase (109%), followed by Lisbon (77%) and Berlin (72%). Gas prices were highly volatile throughout 2022, with Amsterdam experiencing significant fluctuations. However, starting in 2023, prices became more stable compared to 2022, particularly in Amsterdam and the top five European economies. Dr. Alshammari explained that multiple measures taken across Europe have contributed to cooling down natural gas prices. These measures include filling gas storage to nearly 100% capacity, securing alternative suppliers, implementing a price cap on Russian gas, which still allows European countries to import, and adopting energy efficiency measures to reduce energy demand. Professor Jan Osicka, Program Director of Energy Policy Studies at Masaryk University in Czechia, believes that the EU has managed the crisis well. "The solidarity mechanism has worked, the internal market has remained functional and its design hasn't been tampered with too much", he said. However, Rogulj, Eichhammer, and Spyridakos emphasise that long-term price stability depends on global supply dynamics and the acceleration of renewable energy integration, especially in the gas sector.
Euronews
24-02-2025
- Business
- Euronews
Three years on: How Russia's invasion reshaped energy prices across Europe
Three years ago, on 24 February, Russia invaded Ukraine. The war is still ongoing and has had a significant impact on energy prices, with the share of Russia's pipeline gas in EU imports dropping from over 40% in 2021 to about 8% in 2023, according to the European Council. A massive Russian military build-up and escalating hostile rhetoric in 2021, signalling a planned attack on Ukraine, had already triggered a sharp surge in energy commodity prices throughout the year. While European governments implemented various policies to ease the impact on households, household energy prices continued to rise gradually throughout 2021 and surged further following the invasion. Selecting a baseline for price comparisons is challenging. To better illustrate the impact of price fluctuations on households, we use multiple comparisons based on the Household Energy Price Index (HEPI), compiled by Energie-Control Austria, MEKH, and VaasaETT. The "Pre-Invasion One-Year Average" represents the 12-month period from February 2021 to January 2022, while the "Three-Year Post-Invasion Average" covers from February 2022 to January 2025. During the pre-invasion period, the average residential end-user electricity price in EU capitals was 20.5 c€/kWh, rising to 26.5 c€/kWh in the post-invasion period - an increase of 29.5%. During this period, Amsterdam saw the highest increase, with electricity prices rising by 76%, followed by Rome (74%) and Vilnius (64%). "Fossil fuel-dependent markets like the Netherlands faced higher volatility, highlighting the role of energy diversification and regulatory frameworks in price stability," Ivana Rogulj, Wolfgang Eichhammer, and Stavros Spyridakos, experts at the Institute for European Energy and Climate Policy (IEECP), told Euronews Business. Dr. Yousef Alshammari, President of the London College of Energy Economics, noted that natural gas accounts for 45% of Italy's electricity mix, while renewables contribute no more than 30%. Among the capitals of Europe's top five economies, London (47%) recorded the second-largest increase after Rome. Paris (30%) was slightly above the EU average (29.5%), while Berlin (19%) experienced a more moderate rise. The impact of electricity mix In contrast, Madrid saw a slight decline (0.4%) in electricity prices between the pre-invasion and post-invasion periods. Regarding why households in Spain have been significantly less affected by the surge in electricity prices, Rogulj, Eichhammer and Spyridakos explained: "Spain's significant wind, solar, and hydro capacity reduced reliance on fossil fuels, limiting exposure to external price shocks. "Spain's regulated electricity tariff (PVPC) balanced price volatility by linking retail electricity prices to longer-term wholesale market averages, protecting consumers from extreme short-term fluctuations", they added. When non-EU capitals are included, Oslo recorded the steepest decline, with electricity prices falling by 10%, followed by Budapest (-9%) and Bucharest (-8%). These cities stand out as exceptions to the overall trend of rising electricity prices across Europe. The changes are in euros, not local currencies, which may affect the results. These results indicate that Western and Northern Europe experienced the sharpest electricity price hikes, while Baltic and Eastern European capitals also saw significant increases. In contrast, Southern Europe faced more moderate price changes. IEECP experts Rogulj, Eichhammer, and Spyridakos stated: "Nordic countries benefit from renewable electricity production from hydropower, geothermal, and wind, reducing exposure to fossil fuel price volatility." Electricity prices: Before the crisis vs today Comparing electricity prices from early 2021, when the market was more stable and before tensions between Russia and Ukraine escalated, to January 2025, reveals significant increases. Households in EU capitals paid 36% more for electricity in January 2025 compared to January 2021. When Kyiv is excluded from the analysis, Amsterdam records the highest increase, with electricity prices rising by 89% over this four-year period. Significant increases were also observed in Vilnius (81%), Brussels (77%), and Bern (76%). On the other hand, Budapest (-13%) was the only capital where prices declined. Among the top five economies, London saw the highest surge, with electricity prices rising by 66%, followed by Rome (60%) and Paris (45%). If we compare January 2022 to January 2025, household electricity prices, including taxes, increased by only 3.4% on average across EU capitals. In the EU, the highest increase was recorded in Vilnius (53%), followed by Paris (34%). In the non-EU capital Bern, prices rose by 69% over the same period. Several cities experienced notable declines in electricity prices over the past three years. Oslo saw the sharpest drop at 25%, followed by London (-21%) and Bucharest (-20%) and Copenhagen (-20%). High price volatility in the post-invasion period As the line chart below illustrates, electricity prices fluctuated significantly in the capitals of the top five economies following Russia's invasion of Ukraine. Over the past four years, Rome experienced the highest recorded level, reaching 68.7 c€/kWh in October 2022, compared to 43.7 c€/kWh in July 2022. Similarly, London's electricity prices peaked at 64.2 c€/kWh in August 2022, before dropping to 39.5 c€/kWh the following month. Paris had the most stable prices over this period. How have residential gas prices changed since the Russian invasion? We only have gas price data for October 2021 before the invasion, while the full dataset is available from January 2022 onward. This means we cannot calculate a pre-invasion average, but the available data still provides valuable insights into price trends. In October 2021, the residential end-user gas price in EU capitals averaged 8.5 c€/kWh. By January 2022, it had already increased to 11.3 c€/kWh, before peaking at 16.5 c€/kWh in September 2022, the highest level recorded in the past three years. As of January 2025, prices had declined to 11.1 c€/kWh, slightly below January 2022 levels, yet still significantly higher than pre-invasion prices. Stockholm recorded the highest three-year post-invasion average (February 2022– January 2025) at 28.7 c€/kWh, followed by Amsterdam at 21.6 c€/kWh. The nature of Sweden's gas market plays a crucial role in this dynamic. Amsterdam hit hardest by surging gas prices in 2022 Throughout 2022, households in Amsterdam were hit the hardest by surging gas prices. That year, the annual average gas price in Amsterdam reached 31.0 c€/kWh, significantly higher than Stockholm's 23.9 c€/kWh, despite Stockholm leading in the three-year average. Rogulj, Eichhammer, and Spyridakos from the IEECP also attributed rising gas prices in the Netherlands to the suspension of production at the Groningen gas field due to earthquake risks. Budapest (2.6 c€/kWh), Belgrade (4.1 c€/kWh), and Zagreb (4.7 c€/kWh) recorded the lowest three-year average gas prices. In Prague, the three-year average gas price was 110% higher than in October 2021, followed by Berlin (97%), Dublin (86%) and Amsterdam (77%), while the EU average stood at +37%. Dr. Cyril Stephanos from acatech, the National Academy of Science and Engineering, pointed out that Germany had no operational LNG terminals at the time of Russia's attack on Ukraine. "Both Germany and Austria have been highly dependent on natural gas imports from Russia", he said. These have been partially substituted by increased supplies from Norway and through the LNG market. "However, LNG imports tend to be more expensive than pipeline gas due to the additional costs of compression, transportation, and decompression", he added. IEECP experts also emphasised that seeking costly alternatives led to sharp price hikes. In contrast, Budapest (-26%) and Bucharest (-9%) saw lower gas prices compared to October 2021. Despite recent price stabilisation, gas prices in EU capitals were still 31% higher in January 2025 compared to October 2021. Warsaw saw the sharpest increase (109%), followed by Lisbon (77%) and Berlin (72%). Gas prices were highly volatile throughout 2022, with Amsterdam experiencing significant fluctuations. However, starting in 2023, prices became more stable compared to 2022, particularly in Amsterdam and the top five European economies. Dr. Alshammari explained that multiple measures taken across Europe have contributed to cooling down natural gas prices. These measures include filling gas storage to nearly 100% capacity, securing alternative suppliers, implementing a price cap on Russian gas, which still allows European countries to import, and adopting energy efficiency measures to reduce energy demand. The performance of the EU Professor Jan Osicka, Program Director of Energy Policy Studies at Masaryk University in Czechia, believes that the EU has managed the crisis well. "The solidarity mechanism has worked, the internal market has remained functional and its design hasn't been tampered with too much", he said. However, Rogulj, Eichhammer, and Spyridakos emphasise that long-term price stability depends on global supply dynamics and the acceleration of renewable energy integration, especially in the gas sector.
