UK Industrial Electricity Prices Highest in Europe

New data from the Government shows the UK has the highest industrial electricity prices in Europe.

DAVID TURVER

Introduction

 

Every six months, the Government publishes comparisons of energy prices across Europe. This is a different dataset to the annual IEA comparisons that came out a few months ago. The latest data for the first half of 2024 was published a few days ago.

The data covers the 27 countries that make up the EU plus the UK. All prices quoted below are in pence per kilowatt hour and include taxes and levies.

Some of the results are horrifying, let us dig in to see how UK energy prices compare to the EU.

EU and UK Industrial Electricity Prices

 

Starting with industrial electricity prices. Helpfully, the Government includes a chart to compare average industrial electricity prices of the EU14 countries (Table 5.4.1) which shows UK prices are more than twice the EU average for medium consumers (see Figure A).

Figure A - Average Industrial Electricity Prices EU14 plus UK for Medium Consumers (p per kWh)

UK prices are 113.7% higher than the EU14 median. For large and very large users, the relative position is even worse with UK prices more than 150% higher than the EU14 median. UK industrial electricity prices are also higher than the rest of the full EU27.

We can see how prices for large users have evolved compared to France, Germany and the EU14 median in Figure B below.

Figure B - EU and UK Large Industrial Electricity Prices (p per kWh)

 

In 2011, UK prices were below those of Germany and only slightly above the EU14 median. By 2020, prices had risen steadily to be well above those of Germany, France and EU14 median. Prices then rose further partly because of the energy crisis, but have not fallen back by as much as other countries, so now the gap between the EU14 and the UK is the widest on record.

As is obvious from the closure of the Stellantis van plant in Luton shows, we cannot hope to compete in traditional energy intensive industries or industries of the future like making batteries or AI with such extortionate electricity prices.

EU and UK Industrial Gas Prices

 

Turning to industrial gas prices (Table 5.8.1) as shown in Figure C, at first glance, the picture looks a little more sanguine.

Figure C - Average Industrial Gas Prices EU14 plus UK Medium Users (p per kWh)

 

UK industrial gas prices are around the median of the EU14. This sounds reasonable, until you remember that only a few months ago, the Government published data for industrial gas prices across the IEA for 2023 that showed UK prices were some five times higher than the US and Canada. Europe, through its refusal to exploit its own shale gas resources, has priced itself out of international markets. This why Europe is deindustrialising.

UK and EU Electricity to Gas Price Ratios

 

In the UK, industrial electricity prices are some six times the price of gas, this compares to France where the electricity is 2.5 times gas and Germany where the electricity to gas ratio is 3, as seen in Figure D.

Figure E - EU plus UK Industrial Electricity to Gas Price Ratio

 

The ratio fluctuated during the energy crisis, but the general trend since 2011 is up. Clearly, it is not the price of gas that is driving electricity prices higher. It’s renewables subsidies and their associated costs such as grid balancing, capacity market, storage and extra spending on the grid.

International Domestic Gas Prices

 

Domestic gas prices (Table 5.10.1) present a slightly better picture than industrial gas prices as shown in Figure E.

Figure D - Average Domestic Gas Prices EU14 plus UK Medium Users (p per kWh)

 

UK domestic gas prices are well below the EU14 median for the first half of 2024. But as before, EU domestic gas prices were 2.5 times those in the US and roughly double those in Korea in 2023.

International Domestic Electricity Prices

 

Sadly, UK domestic electricity prices (Table 5.6.1) are much less competitive than gas prices, as seen in Figure F.

Figure F - Average Domestic Electricity Prices EU27 plus UK (p per kWh)

 

The UK has the third highest domestic electricity prices in Europe, behind only Germany and Ireland. UK prices are 59.4% higher than the EU27 median for small users and 46% higher for large users. As shown in Figure G, UK domestic electricity prices are more than four times those for domestic gas.

Figure G - EU plus UK Domestic Electricity to Gas Price Ratio

 

Widening Gap Between Rich and Poor

 

The data also shows a widening gap between rich and poor as small users are paying much more per unit of energy than large users as shown in Figure H.

Figure H - UK Domestic Electricity and Gas Prices by Size of Consumer (p per kWh)

 

In 2011, small electricity consumers paid 2.73p per kWh more than large consumers. By the first half of 2024, this differential had widened to 6.97p so now small consumers are paying 24.6% more than large consumers. For gas, the difference is even more stark, with the gap widening from 1.25p/kWh in 2011 to 3.93p/kWh now. Small domestic gas consumers now pay 60.5% more per unit than large users. This shows how high standing charges disproportionately impact the poorest small users.

UK Has Second Most Expensive Diesel Prices in Europe

 

Whilst we are here, it is worth mentioning that the Government also publishes international road fuel prices too. Petrol prices are reasonably competitive with the EU, with our prices being the 19th cheapest across the EU27, some 8% above the median. However, diesel prices are an entirely different story, with UK prices being the second most expensive behind Finland, some 12% above the median.

Conclusions

 

When it comes to gas prices, the UK is reasonably competitive compared to the EU average. But this is something of a pyrrhic victory because European gas prices are so much higher than key industrial competitors like the US, Canada and Korea.

However, when we turn to electricity prices, the UK is woefully uncompetitive, particularly for industry where our prices are much more than double those in the EU. When we factor in EU prices being very much higher than other international competitors, then we can see the UK position is dire. This level of price differential is an existential threat to the economy.

We can pretend to be “climate leaders” on the world stage and set a mission for a Net Zero grid by 2030, but this is coming at the cost of winning the gold medal in the international electricity price Olympics. We can also see that it is not the gas price that is driving our electricity prices to such uncompetitive levels, because we are also winning the gold medal for the electricity to gas price ratio. As discussed previously (here and here), it must be the ~£11bn of renewables subsidies, £4.6bn of carbon taxes in the form of the Emissions Trading Scheme, £2.5bn of grid balancing costs and £1bn of capacity market costs that are driving electricity prices skywards. There is an extra £112bn of transmission network costs in the pipeline to connect remote, intermittent renewables to the grid that will continue to push up prices.

Now we also find that the fuel most used to transport goods around the country is the second most expensive in Europe, we can see that expensive energy is acting as a tax on all businesses, not just energy intensive industry.

All this is in direct contradiction to Labour’s number one mission of increasing economic growth. As discussed earlier, Labour’s top two missions are mutually incompatible; we cannot have top tier growth with the highest industrial electricity prices in the developed world.

Having the highest electricity prices in the EU and by extension the rest of the developed world, ought to be considered a national emergency. The Government’s primary mission should be to cut energy prices because cheap energy is the key to unlocking growth. In addition, the pernicious impact of high fixed charges on our gas and electricity bills is making the poorest suffer most from this madness in energy policy. Surely, the “progressive” thing to do would be to cut energy prices.

It is good to see rising disquiet in the press about high energy prices, but there is precious little sign that Labour is paying attention. We can but hope that reality dawns on the Government before the economy collapses under the weight of Net Zero.

We might be able to accelerate the awakening of Government if more of us sign and share this new petition calling for a referendum on Net Zero.


This article (UK Industrial Electricity Prices Highest in Europe) was created and published by David Turver and is republished here under “Fair Use” 

••••

The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)

••••

Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.

••••

Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.

••••

Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.

Be the first to comment

Leave a Reply

Your email address will not be published.


*