European power prices to rise by €13 billion in five years

16 April 2013

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17 April 2013 | Helen Gilbert

European industrial electricity buyers will face an additional €13 billion (£11.1 billion) in energy costs over the next five years, an energy broker has warned.

Tight environmental legislation, the closure of a large number of power stations across Europe and fluctuations in power generation feedstock costs will be the main drivers behind the price increases, EnergyQuote JHA said.

The energy and carbon consultancy cautioned that buyers would continue to face “significant cost pressures” as companies battle with the effects of the euro-crisis, rising oil prices, global competition and the cost of environmental legislation.

German power consumers would be the worst affected with wholesale power prices expected to rise by 21.5 per cent between the 2013 to 2018 period, the analysis found.

France faces hikes of 19.6 per cent, while the UK can expect rises of 17.7 per cent. Elsewhere, Spain, Portugal, Ireland and the Netherlands will see wholesale power prices rise between 6 and 8 per cent.

The growing burden of non-energy costs – largely made up of energy taxes and transmission and distribution charges are also expected to increase rapidly over the next 24 months to make up between 40 and 50 per cent of the final energy bill and continue to rise to 2020, EnergyQuote JHA said.

The firm said rising energy prices were denting the “significant progress” many companies had made in reducing their energy costs through energy efficiency measures and on-site generation.

“The double impact of both energy and non-energy costs rising over the short and medium term, will have a significant impact on the bottom line of companies across Europe,” EnergyQuote JHA managing director Gary Worby said.

“Those companies that have invested in on-site generation, putting in place an holistic approach to energy efficiency and centralising data around a single software platform are already ahead of the game.”

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