With their residential electricity prices climbing 43% from 2006 to 2013, European citizens are paying through the nose for electricity, especially when compared to U.S. residential electricity prices, which have climbed just 17% in the same time period.
Average residential electricity prices in Europe are more than double prices in the U.S. “Regulatory structures—including taxes and other user fees, investment in renewable energy technologies, and the mix and cost of fuels—all influence electricity prices,” the EIA said in a report out today.
In the U.S., Hawaii residential electricity prices are triple the U.S. average because of the high cost of transporting generation fuel to the islands. Hawaii’s cost for electricity is almost on par with Germany and Denmark, the EU’s two highest. Bulgaria is the only country in the EU-28 with residential prices lower than the U.S. average in 2013.
Recipe for High Prices in Europe: 30% Taxes, Renewable Energy Levies, Saying Goodbye to Nuclear and Coal
Taxes and levies account for high prices in some European countries. EU countries taxed residential electricity rates at an average of 31% in 2013, up from an average of 23% in 2006. These values vary greatly with 2013 taxes on electricity as low as 5% in the United Kingdom (UK) and as high as 57% in Denmark. In Germany, where taxes and levies account for about half of retail electricity prices, transmission system operators charge residential consumers a renewable energy levy that is used to subsidize certain renewable generation facilities.
Although about 18% of 2012 EU generation came from natural gas, most EU countries consume more natural gas than they produce and thus rely on pipeline or liquefied natural gas (LNG) imports, the EIA reported. “From 2006 to 2013, prices for natural gas at the main trading hubs in the UK and Germany increased by more than a third, while prices at the U.S. benchmark Henry Hub decreased by 45%.”
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