Depending on where an electricity or gas customer lives in Europe, the price that customer has to pay
Depending on where an electricity or gas customer lives in Europe, the price that customer has to pay for electricity can be around 300% that of another country. This is just one of the many findings of the monthly Household Electricity Price Index for Europe (HEPI), launched today by the Austrian Energy Regulator (E-Control) in collaboration with the VassaETT Global Energy Think Tank. At 30.88 euro cents/kWh, Copenhagen power customers are paying 270% more than power customers in Athens. And at 13.71 euro cents/kWh, gas customers in Stockholm are paying 322% more than gas customers in London.
Based on the electricity and natural gas prices collected both for incumbents and competitor companies in capital cities of EU15 member states, E-Control GmbH and VaasaETT have compiled an overall index: The Household Energy Price Index, HEPI. The HEPI is a weighted end user price index that assesses the overall price development.
The HEPI is Europe's only independent comparative monthly index of electricity and gas prices across the 'EU 15' states. Nearly a year of research and development has gone into ensuring a methodology whereby prices are comparable between companies and between countries. Data is collected directly from utilities and authorities in the respective markets.
E-Control GmbH and VaasaETT will continue to monitor the overall price development. An update will be available in early June 2009.
KEY FINDINGS AS OF MAY 2009
European Energy Prices Falling
The figures for the HEPI reveal that both for electricity and gas, end-user prices for households have decreased constantly across EU15 member states since January 2009. The is mainly due to lower wholesale market prices for electricity and gas which has fed through (sometimes with a delay, as in the case of natural gas) to the end user.
Big Variations in Prices paid by European Energy Customers
- Electricity customers in Copenhagen currently pay by far the highest prices within the capital cities of the EU15, around a third higher than Berlin, the next most expensive city. This is due largely to much higher energy taxes in Denmark, which make up the majority of the energy price. Customers in Helsinki and Athens pay the least, in fact just over one third of the prices paid by the Danes.
- For gas, it is customers in Stockholm who pay by far the highest prices within the capital cities of the EU15, over 50% higher than in the next most expensive cities Copenhagen, Berlin and Rome.
- Gas customers in London, pay less than in any other capital city, with the closest cities Luxemburg, Paris and Lisbon around 25% more expensive
Slightly Different Picture when Taxes are Excluded
- The picture is slightly different when taxes are excluded, with Luxembourg, Dublin and Amsterdam respectively the most expensive for electricity. Paris becomes the cheapest city for electricity, followed closely by Stockholm, Helsinki, Athens, Berlin and London respectively.
- For gas Stockholm remains the most expensive when taxes are omitted, followed by Athens, Dublin and Berlin. London remains the cheapest, followed by Rome and Copenhagen.
For electricity customers switching from the standard incumbent tariff to the leading competitors typical tariff, the biggest current typical savings are available in Stockholm, followed by Vienna and Lisbon, with annual savings (given constant prices) of around 103 Euro to 56 Euro respectively. Interestingly, savings in London, Europe's most active energy market, are modest in comparison.
In some countries, however, savings are effectively zero where prices are capped low (as in Paris) or where the capital city incumbent has a very competitive incumbent price (as in Helsinki). Savings are much larger when gas and electricity and gas savings are aggregated, with Berlin and Brussels leading the way with savings of 164 and 144 Euro respectively. Savings in most cities are higher if customers switch to the cheapest competitor.
About the Authors
E-Control GmbH was set up by the legislator on the basis of the new Energy Liberalisation Act and took up work on 1 March 2001. E-Control is headed by Mr Walter Boltz as the managing director and is entrusted with monitoring, supporting and, where necessary, regulating the implementation of the liberalisation of the Austrian electricity and natural gas markets. More at: www.e-control.at
VaasaETT Global Energy Think Tank
The VaasaETT Global Energy Think-Tank is an innovative provider of collaborative expertise and solutions to the energy and utilities industry, through its network of thousands of senior executives, officials, researchers and other experts that are mostly known and trusted personally. Value is provided to partners through the synergy of Interactive Forums (both real and virtual) and Collaborative Projects. The Think-Tank focuses broadly on strategic business, market, innovation and regulatory issues, and is world renowned for its expertise in fields such as Customer Psychology & Behaviour, Utilities Marketing, Smart Metering & Demand Response, and Market Efficiency. More at: www.vaasaett.com
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