Analysing levels and drivers of energy costs in the EU

Energy price levels in the EU, which are influenced by EU energy and climate change policies, naturally impact the competitiveness of energy-intensive industries. As a result, energy prices are a central theme in the European Commission’s CleanEnergy4All package, which was the topic of a stimulating debate at a CEPS-ECH Workshop on June 30th. Three representatives from the European Commission (DG GROW, DG ENER and DG ECFIN) were invited to share their perspectives on energy prices in the EU, with a focus on the competitiveness of industries. It was agreed amongst the panellists that although energy costs for EU industries may be high when compared with third countries, the energy efficiency measures that have been implemented in the EU in response to the high energy prices have generally led to low energy-intensity values.

The workshop also served as the occasion to present two studies on energy prices and associated regulatory costs for industries, conducted for DG GROW by CEPS, Ecofys, Economisti Associati and Ecorys. The results from these studies show that there is a clear relationship between electricity prices and electricity consumption since larger consumers can negotiate more favourable electricity supply contracts and benefit from renewable support payment exemptions. Despite a wide array of electricity prices throughout Europe, gas prices are less divergent owing to the fact that the share of regulatory costs in gas prices is relatively small, thereby giving national governments less opportunity to adapt prices through discounts and exemptions. Ultimately, however, both gas and electricity prices for energy-intensive industries have been declining since 2012, in response to falling energy supply costs.