Our most important findings

Industry

  1. 1

    Wholesale spot power prices are on the decline in many parts of Europe, and are lowest in Germany and Central Eastern Europe (especially in Poland and the Czech Republic). Meanwhile, prices have been rising in the US.

    Since 2011, spot prices have been decreasing in Europe, except for in the UK, Belgium and the Netherlands. While spot prices in Germany were higher than in the US during 2010-2012, in 2013 they fell below the New York ISO prices, and converged with those of other US regions. In many other European markets, the gap with US prices remains significant.

  2. 2

    Wholesale market prices can serve as a starting point for comparing the energy costs of European industries, especially energy-intensive industries. Nevertheless, this approach has inherent limitations:

    (1) Wholesale prices don’t necessarilyaccurately reflect the “energy component” of prices paid by end users, due to differences in purchasing strategies, longtermcontracts and potential price regulation; (2) Several additional components must be taken into account as well (gridtariffs, renewable levies and other taxes), from which industrial actors may receive partial or full exemptions.

  3. 3

    While numerous European companies have complained of market distortion due to regulatory favouritism for Germany’s energy-intensive industries,...

    ...caution must be exercised when attempting to directly compare industrial end-use pricesbetween countries and sectors. Against the backdrop of decreasing wholesale prices and increasing exemptionsfor energy-intensive consumers in Germany, several EU member states have argued that domestic regulations inGermany create market distortions that unduly favour German firms. Because firms in different regions and sectorsvary considerably in the extent to which they pay wholesale market prices and/or receive tax exemptions and levyreductions, comparing prices between sectors and countries is a difficult task. The heterogeneity of the situation is notfully and transparently captured by European statistics.

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