High electricity prices are becoming a huge obstacle to Europe's energy transition. Although nearly 40% of Europe’s current electricity generation comes from renewable energies, mainly solar and wind energy, the “scenery” that has entered the era of parity obviously has not lowered electricity prices. The continued high cost of living has triggered radical emissions reductions by European people in the EU. All these have brought great challenges to Europe’s energy transition.

As of August, electricity prices in many European countries have hit a record high. Among them, Spain has surpassed Germany, which has been at the top of the list for many years, and has become the most expensive country in Europe for electricity consumption. The United Kingdom has also made a decision to increase its electricity tariffs for the second time in 2021.

Refresh record

According to data from the energy consulting agency Argus, the wholesale electricity price in Germany, the largest European economy, jumped to 83.67 euros (approximately 638.67 yuan)/MWh in July 2021, and exceeded 90 euros/MWh at the beginning of August 2021. The increase since 2021 has exceeded 60%. At the same time, wholesale electricity prices in the UK, Spain and Italy have also set records. The wholesale electricity price in France is maintained at 90 euros/MWh. From August 2021, the price of household electricity will increase by 0.48%, and the price of enterprise electricity will increase by 0.38%.

Spain's electricity prices have risen the most. In the first week of August 2021, the country’s wholesale electricity price soared to 160 Euros/MWh, surpassing Germany to become the highest electricity price in Europe. According to the latest electricity price model implemented in Spain, 20 to 21 o'clock each day is the most expensive time period for electricity prices. At present, it is the high temperature of summer, and the country's per capita monthly electricity bill has reached 110 euros. From January to July, the average electricity expenditure of Spanish households increased from 381.28 euros in the same period last year to 469.64 euros.

With electricity prices breaking new records, the Spanish government plans to cut energy value-added taxes to limit the rise in electricity prices. The country’s Minister of Energy and Environment Ribeira urges the EU to take action against soaring energy prices and reduce the cost pressure on consumers from the energy transition. “We call on the EU to take measures to provide a maximum price for electricity and use existing legislation. To curb or depress the soaring carbon price."

In addition, the UK will allow public utility companies to increase electricity bills for the second time in 2021, and tens of millions of people will be affected. The Natural Gas Power Market Office of the British energy regulator announced that due to the increase in wholesale electricity prices, household users who directly pay for electricity will increase their annual expenses by at least 139 pounds (approximately RMB 1,237.42) from October, and the average annual bill will rise from 1,138 pounds to 1,277 pounds; The annual fee for prepaid users will increase by 153 pounds from October, and the average annual bill will increase from 1,156 pounds to 1,309 pounds.

Behind the increase in electricity prices in Europe is the rise in carbon and gas prices. In view of the establishment of a radical emission reduction target of "reducing emissions by at least 55% from 1990 levels by 2030", the EU has accelerated its green transformation and economic decarbonization plan. Since 2021, carbon prices have continuously set new records. In mid-May 2021 It broke the 50 Euro/ton mark, setting the highest price since the creation of the EU carbon market.

Fitch International pointed out that the EU carbon price has continued to rise since October 2020, from 25 euros/ton to 55-60 euros/ton. This sharp rise has driven the price of electricity in major European power markets to rise. From October 2020 to June this year, wholesale electricity prices in Germany rose from 17 euros/MWh to 90 euros/MWh, and electricity prices in France, the United Kingdom, Spain, Italy and other countries also increased.

At almost the same time, the European benchmark gas price also hit a record high. The average spot price in July 2021 has risen to US$12 per million British thermal units, a 13-year high, further pushing up electricity prices. Industry insiders pointed out that Russia’s pipeline gas delivery to Europe has decreased, Asian liquefied natural gas (LNG) demand has accelerated, and the price of LNG shipped from the United States to Europe has been high. The rising cost of electricity generation in Europe may exist for a long time.

Keywords: engineering construction, engineering news, engineering construction information

The increase in carbon and gas prices will eventually be passed on to electricity prices. The British "Financial Times" pointed out that nearly three-quarters of Spain's energy is dependent on imports, causing the country's retail electricity prices to soar. Eurostat pointed out that Poland, which mainly relies on coal for power generation, cannot underestimate the increase in domestic electricity prices. The current retail electricity price in the country is 0.15 euros/kWh. From 2013 to 2019, the price of electricity in Portugal has been rising along with the increase in carbon prices. The cost of gas-fired power generation has risen by 10 Euros/MWh, and the cost of coal-fired power generation has risen by 22.5 Euros/MWh.Editor/XuNing