Increased competition in wholesale energy markets, improved interconnections and a more integrated internal electricity market have led to lower wholesale prices in recent years, according to the European Commission's latest report on energy prices and costs in Europe, published on Wednesday 9 January.
The report also shows that, in 2017, retail prices for EU households fell for the first time since 2008. "The upward trend in network access charges and taxes and charges has stopped", the report states. Levies have not increased, partly due to lower unit costs of renewable energy investments. Taxes and levies account for 40% of average electricity prices in the Union, the Commission points out.
The report also highlights the current volatility of energy prices, particularly those of fossil fuels set at the global level. These price increases confirm the strong economic arguments in favour of decarbonising the European economy.
The EU's energy bill. The EU remains heavily dependent on oil and gas imports and the rise in fossil fuel prices (especially crude oil) led to a 26% increase in the cost of EU energy imports in 2017 to €266 billion, the report says. The rise in oil prices could have had a negative impact on EU growth (-0.4% of GDP in 2017) and inflation (+0.6%).
The ambitious targets recently adopted for renewable energy and energy efficiency by 2030 will help to reduce the Union's dependence on imported fossil fuels, the Commission points out.
Figures show that future electricity production costs are expected to increase for electricity produced from fossil fuels and decrease for renewable energies.
Energy taxation. In 2016, energy taxes collected by EU Member States amounted to €280 billion, or 4.7% of total tax revenues. (Original version in French by Lionel Changeur)