Energy crisis in Europe: which countries have the cheapest and most expensive electricity and gas?
Annual energy inflation in the European Union reached a record high following Russia’s invasion of Ukraine. The annual energy inflation rate exceeded 40 percent in June 2022, and then prices began to gradually fall.
In February 2023, energy inflation was significantly lower (16.6 percent) than in the same period last year (28.7 percent).
However, many homes and businesses still struggle with the cost of energy. European governments have allocated vital aid to households and businesses to ease the impact of huge energy bills amid the overall cost-of-living crisis.
Which countries have the lowest and highest electricity and natural gas prices? How much money have governments in Europe allocated to save homes and businesses from the energy crisis?
winter is almost over End in Europe. Households will soon get rid of a large part of their energy bills as their main use of energy is for home heating (63 per cent of final energy consumption in the residential sector in the EU in 2020).
However, energy remains an important requirement for other purposes such as lighting, water heating and cooking. EU efforts to diversify its sources of Russian gas stepped up Dramatically.
In February 2023, according to the Household Energy Price Index (HEPI), residential electricity prices in the EU varied from 9.2 €/kWh in Hungary to 49.9 €/kWh in Ireland. These prices reflect the cost in the capital cities of each country rather than the average rate.
Ireland was followed by Germany (49.5 €/kWh), the UK (48.5 €/kWh) and Italy (48 €/kWh). At the bottom, Hungary was followed by Malta (12.3 €/kWh), Croatia (14.4 €/kWh) and Bulgaria (15.3 €/kWh).
The EU average was 28.3 €/kWh. Prices in France (26.7 €/kWh) and Spain (24.1 €/kWh) were lower than the EU average.
Electricity prices as per purchasing power norms (PPS)
Prices change when adjusted for purchasing power standards (PPS), but the countries with the highest and lowest prices remain largely the same. The PPS is an artificial currency unit that eliminates general price level differences between countries. Theoretically, a PPS can buy the same amount of goods and services in every country.
In February 2023, according to the PPS, residential electricity prices ranged from 14.1 €/kWh in Malta to 51.6 €/kWh in the Czechia. The countries in the top five remained the same, although their positions in the rankings changed.
Czechia was followed by Italy (49.1 €/kWh), Germany (44.5 €/kWh), Ireland (41.6 €/kWh), and the UK (41.5 €/kWh).
The EU average was 30.8 €/kWh. The ranking of Bulgaria and Romania in PPS is much higher than the current price ranking.
Prices in PPS were lower than the EU average in all four Scandinavian countries.
Natural gas prices are lower than electricity prices
Measured in €/kWh, residential natural gas prices including taxes were lower than electricity prices in the European Union. Gas prices vary from 2.5 €/kWh in Hungary to 30.1 €/kWh in Sweden.
Like electricity in February 2023, gas prices were also relatively high in Germany (22.3 €/kWh) and Italy (20.9 €/kWh).
Among the countries with the cheapest gas prices, Hungary was followed by Croatia (5.2 €/kWh), Slovakia (6.1 €/kWh), and Romania (6.3 €/kWh).
Electricity prices vs gas in France and Spain
While electricity prices in France and Spain were lower than the EU average, gas prices were higher than the EU average at current prices.
In February 2023, residential gas prices based on PPS varied from 4.3 €/kWh to 25.2 €/kWh in the EU. The EU average was 14.1 €/kWh. Germany and Italy were among the top four countries in terms of highest gas prices in PPS, similarly to current prices.
While France and the UK are slightly above the EU average in terms of current prices, their ranking based on PPS was lower. Bulgaria also had a significantly higher PPS ranking compared to the general price level.
Highest and lowest government subsidy for electricity and gas bills
Rising wholesale energy prices prompted Europe’s governments to do just that to measure To protect households and businesses from direct financial impacts. Fiscal support by 29 European countries (27 EU member states plus the UK and Norway) was worth at least €758 billion from September 2021 to protect citizens and firms from the energy crisis, according to Bruegel, a Brussels-based think tank. By January 2023.
Germany’s support equals the EU’s total of 41 percent.
This support amounted to €646 billion in the EU as a whole. Germany, a heavily gas-dependent country, supported €265 billion, corresponding to 41 percent of the EU total.
Germany was followed by the UK (€103 billion), Italy (€92.7 billion) and France (€92.1 billion).
Considering the level of support as a percentage of gross domestic product (GDP) and per capita can provide more meaningful data to understand the lowest and highest levels of government support.
Funds allocated as a percentage of GDP varied from 0.5 percent in Denmark to 7.4 percent in Germany. Germany was followed by Malta (6.8 percent), Bulgaria (5.7 percent) and Austria (5.3 percent).
At the bottom of the list, Finland (0.6 percent), Cyprus (0.9 percent), and Ireland and Sweden (both 1.3 percent) follow Denmark. Norway’s support was equal to 2 percent of GDP. This suggests that government support in Scandinavian countries has been comparatively low in terms of percentage of GDP.
The figure was 3.8 per cent in Britain and 3.7 per cent in France.
Germany set to exceed €3,000 per person from September 2021
Between September 2021 and January 2023, total support to households and firms on a per capita basis varied from €233 in Cyprus to €3,732 in Luxembourg. Germany (€3,179) came second.
The figure was €2,375 in Austria and €2,257 in the Netherlands, compared to €1,530 in the UK and €1,358 in France.
What is HEPI?
Energy prices in this story are based on HEPI data. The Austrian Energy Regulator (Energy-Control) and the Hungarian Energy and Public Utilities Regulatory Authority (MEKH) commissioned VaasaETT to compile and publish electricity and gas price rankings for 33 European capital cities on a monthly basis.
That project is known as HEPI, and aims to address the persistent lack of current, frequently updated, and methodologically reliable information on domestic prices for both electricity and gas at the European level.