Earlier this year a report was released by the Austrian Energy regulator into energy prices across Europe. The investigation was commissioned after initial observations in 2009 showed vast disparities in pricing across the continent.
The paper showed there were “shocking differences in electricity [and gas prices] depending on where a customer lives in Europe”.
It challenged many of the preconceptions each country had about their own particular circumstances and laid them side by side to show illuminating comparisons. Thanks to this study, energy companies can be more readily accountable for their pricing.
Rate increases were common right across the board, but the amounts of increase differed. In Finland customers saw prices rise a massive 20% from 2010-11, whereas a home in Spain needed to find only an extra 15%
Customers in Denmark pay almost double the cost of the average European householder 30.47 euro cents per KWH where the average stood at 18.93 euro cents.
In struggling Greece a far more modest 12.70 euro cents, not much less than domestic customers in Great Britain who paid just 15.03 euro cents per kwh; half of what their Danish cousins were having to find each month.
End user prices were analysed on percentage of cost attributed to fuel costs and how much went to distribution, VAT and other taxes. British customers were found to have the far greatest bang for their buck with 63% of the price paid coming from fuel costs. The government took 10% in taxes, 5% in VAT, and 22% made up distribution costs in the period examined.
In Denmark, by contrast, only 35% of electricity charges arise from fuel costs, 22% was attributed to distribution and the government profited by 35% for energy taxes and 20% in VAT. The average levels across Europe were as follows; 44% fuel costs, 31% for distribution, 12% for energy taxes and 14% VAT.
Interestingly, the report highlighted the differences in ease of predictions of the markets from wholesale energy prices. Whilst gas markets were easy to predict from the natural gas prices in the previous quarter, no such distinction could be made in the electricity markets.
What was seen as a watertight prediction was the certainty of continued escalation in prices. This was due, in the main, to the need for investment in renewable energy.
Suppliers have green targets which promise to completely overhaul the way we generate electricity in as little as forty years. Predictions show the likelihood of a huge 49% of our energy coming from wind turbines by the year 2050. If achieved, electricity prices are due to be increased by a terrifying 100%.
If, however plans diversify to include gargantuan solar plants which power water turbines to create electricity it could be the increases will stop at around 43%. These promise to outstrip the amount of electricity created by nuclear energy and coal.
So with prices rising, what can the average EU household do to protect their spending? Switching providers is the key. Many suppliers offer massive incentives to move, particularly to those who have never switched before, and even those who are not first timers can achieve savings of 10% or more.
It was found in Great Britain switching is commonplace and although the discounts are as readily available in other European countries, it is far less often taken advantage of. In fact, by switching electricity suppliers in 2011, there were possible average savings of 9% to be had. These had not been exploited by the majority of consumers outside Britain.
On every possible level it is advisable to compare prices across the board. Done with care and clear attention to accurate meter readings, changing suppliers is a must for any cost conscious householder. Even then the cheapest supplier is still going to cost more than last year.