Euronews Enterprise seems at how residential electrical energy and gasoline costs have advanced since Russia’s invasion of Ukraine and compares costs with pre-invasion ranges.
Three years in the past, on 24 February, Russia invaded Ukraine. The warfare remains to be ongoing and has had a big influence on power costs, with the share of Russia’s pipeline gasoline in EU imports dropping from over 40% in 2021 to about 8% in 2023, based on the European Council.
A large Russian army build-up and escalating hostile rhetoric in 2021, signalling a deliberate assault on Ukraine, had already triggered a pointy surge in power commodity costs all year long. Whereas European governments applied numerous insurance policies to ease the influence on households, family power costs continued to rise step by step all through 2021 and surged additional following the invasion.
Deciding on a baseline for value comparisons is difficult. To higher illustrate the influence of value fluctuations on households, we use a number of comparisons based mostly on the Family Power Worth Index (HEPI), compiled by Energie-Management Austria, MEKH, and VaasaETT.
The “Pre-Invasion One-Yr Common” represents the 12-month interval from February 2021 to January 2022, whereas the “Three-Yr Submit-Invasion Common” covers from February 2022 to January 2025.
In the course of the pre-invasion interval, the common residential end-user electrical energy value in EU capitals was 20.5 c€/kWh, rising to 26.5 c€/kWh within the post-invasion interval – a rise of 29.5%.
Throughout this era, Amsterdam noticed the very best enhance, with electrical energy costs rising by 76%, adopted by Rome (74%) and Vilnius (64%).
“Fossil fuel-dependent markets just like the Netherlands confronted larger volatility, highlighting the position of power diversification and regulatory frameworks in value stability,” Ivana Rogulj, Wolfgang Eichhammer, and Stavros Spyridakos, senior specialists on the Institute for European Power and Local weather Coverage (IEECP), informed Euronews Enterprise.
Dr. Yousef Alshammari, President of the London Faculty of Power Economics, famous that pure gasoline accounts for 45% of Italy’s electrical energy combine, whereas renewables contribute not more than 30%.
Among the many capitals of Europe’s high 5 economies, London (47%) recorded the second-largest enhance after Rome. Paris (30%) was barely above the EU common (29.5%), whereas Berlin (19%) skilled a extra average rise.
The influence of electrical energy combine
In distinction, Madrid noticed a slight decline (0.4%) in electrical energy costs between the pre-invasion and post-invasion durations.
Relating to why households in Spain have been considerably much less affected by the surge in electrical energy costs, Rogulj, Eichhammer and Spyridakos defined: “Spain’s vital wind, photo voltaic, and hydro capability lowered reliance on fossil fuels, limiting publicity to exterior value shocks.
“Spain’s regulated electrical energy tariff (PVPC) balanced value volatility by linking retail electrical energy costs to longer-term wholesale market averages, defending customers from excessive short-term fluctuations”, they added.
When non-EU capitals are included, Oslo recorded the steepest decline, with electrical energy costs falling by 10%, adopted by Budapest (-9%) and Bucharest (-8%). These cities stand out as exceptions to the general development of rising electrical energy costs throughout Europe.
The adjustments are in euros, not native currencies, which can have an effect on the outcomes.
These outcomes point out that Western and Northern Europe skilled the sharpest electrical energy value hikes, whereas Baltic and Jap European capitals additionally noticed vital will increase. In distinction, Southern Europe confronted extra average value adjustments.
IEECP specialists Rogulj, Eichhammer, and Spyridakos acknowledged: “Nordic nations profit from renewable electrical energy manufacturing from hydropower, geothermal, and wind, lowering publicity to fossil gas value volatility.”
Electrical energy costs: Earlier than the disaster vs at the moment
Evaluating electrical energy costs from early 2021, when the market was extra secure and earlier than tensions between Russia and Ukraine escalated, to January 2025, reveals vital will increase. Households in EU capitals paid 36% extra for electrical energy in January 2025 in comparison with January 2021.
When Kyiv is excluded from the evaluation, Amsterdam information the very best enhance, with electrical energy costs rising by 89% over this four-year interval. Vital will increase have been additionally noticed in Vilnius (81%), Brussels (77%), and Bern (76%).
Then again, Budapest (-13%) was the one capital the place costs declined.
Among the many high 5 economies, London noticed the very best surge, with electrical energy costs rising by 66%, adopted by Rome (60%) and Paris (45%).
If we evaluate January 2022 to January 2025, family electrical energy costs, together with taxes, elevated by solely 3.4% on common throughout EU capitals. Within the EU, the very best enhance was recorded in Vilnius (53%), adopted by Paris (34%).
Within the non-EU capital Bern, costs rose by 69% over the identical interval.
A number of cities skilled notable declines in electrical energy costs over the previous three years. Oslo noticed the sharpest drop at 25%, adopted by London (-21%) and Bucharest (-20%) and Copenhagen (-20%).
Excessive value volatility within the post-invasion interval
As the road chart beneath illustrates, electrical energy costs fluctuated considerably within the capitals of the highest 5 economies following Russia’s invasion of Ukraine.
Over the previous 4 years, Rome skilled the very best recorded degree, reaching 68.7 c€/kWh in October 2022, in comparison with 43.7 c€/kWh in July 2022.
Equally, London’s electrical energy costs peaked at 64.2 c€/kWh in August 2022, earlier than dropping to 39.5 c€/kWh the next month.
Paris had probably the most secure costs over this era.
How have residential gasoline costs modified because the Russian invasion?
We solely have gasoline value knowledge for October 2021 earlier than the invasion, whereas the complete dataset is on the market from January 2022 onward. This implies we can not calculate a pre-invasion common, however the obtainable knowledge nonetheless offers priceless insights into value developments.
In October 2021, the residential end-user gasoline value in EU capitals averaged 8.5 c€/kWh. By January 2022, it had already elevated to 11.3 c€/kWh, earlier than peaking at 16.5 c€/kWh in September 2022, the very best degree recorded up to now three years.
As of January 2025, costs had declined to 11.1 c€/kWh, barely beneath January 2022 ranges, but nonetheless considerably larger than pre-invasion costs.
Stockholm recorded the very best three-year post-invasion common (February 2022– January 2025) at 28.7 c€/kWh, adopted by Amsterdam at 21.6 c€/kWh.
The character of Sweden’s gasoline market performs a vital position on this dynamic.
Amsterdam hit hardest by surging gasoline costs in 2022
All through 2022, households in Amsterdam have been hit the toughest by surging gasoline costs. That 12 months, the annual common gasoline value in Amsterdam reached 31.0 c€/kWh, considerably larger than Stockholm’s 23.9 c€/kWh, regardless of Stockholm main within the three-year common.
Rogulj, Eichhammer, and Spyridakos from the IEECP additionally attributed rising gasoline costs within the Netherlands to the suspension of manufacturing on the Groningen gasoline discipline on account of earthquake dangers.
Budapest (2.6 c€/kWh), Belgrade (4.1 c€/kWh), and Zagreb (4.7 c€/kWh) recorded the bottom three-year common gasoline costs.
In Prague, the three-year common gasoline value was 110% larger than in October 2021, adopted by Berlin (97%), Dublin (86%) and Amsterdam (77%), whereas the EU common stood at +37%.
Dr. Cyril Stephanos from acatech, the Nationwide Academy of Science and Engineering, identified that Germany had no operational LNG terminals on the time of Russia’s assault on Ukraine.
“Each Germany and Austria have been extremely depending on pure gasoline imports from Russia”, he stated.
These have been partially substituted by elevated provides from Norway and thru the LNG market. “Nonetheless, LNG imports are usually costlier than pipeline gasoline because of the extra prices of compression, transportation, and decompression”, he added.
IEECP specialists additionally emphasised that in search of expensive options led to sharp value hikes.
In distinction, Budapest (-26%) and Bucharest (-9%) noticed decrease gasoline costs in comparison with October 2021.
Regardless of current value stabilisation, gasoline costs in EU capitals have been nonetheless 31% larger in January 2025 in comparison with October 2021. Warsaw noticed the sharpest enhance (109%), adopted by Lisbon (77%) and Berlin (72%).
Fuel costs have been extremely risky all through 2022, with Amsterdam experiencing vital fluctuations. Nonetheless, beginning in 2023, costs turned extra secure in comparison with 2022, significantly in Amsterdam and the highest 5 European economies.
Dr. Alshammari defined that a number of measures taken throughout Europe have contributed to cooling down pure gasoline costs. These measures embody filling gasoline storage to just about 100% capability, securing different suppliers, implementing a value cap on Russian gasoline, which nonetheless permits European nations to import, and adopting power effectivity measures to scale back power demand.
The efficiency of the EU
Professor Jan Osicka, Program Director of Power Coverage Research at Masaryk College in Czechia, believes that the EU has managed the disaster properly.
“The solidarity mechanism has labored, the interior market has remained purposeful and its design hasn’t been tampered with an excessive amount of”, he stated.
Nonetheless, Rogulj, Eichhammer, and Spyridakos emphasise that long-term value stability will depend on world provide dynamics and the acceleration of renewable power integration, particularly within the gasoline sector.