![]() These markets benefit from low production costs due to access to favourable renewable sites (Scandinavia) and low fuel costs (United States). At the lower end of industrial prices are Norway (despite charging VAT), Sweden and Denmark together with the United States. In Italy and Germany this is due to relatively high excise taxes, which many other countries do not impose on industrial consumers. Industrial sector prices are especially high in Italy, Japan, Chile, the United Kingdom, Slovakia and Germany. Some influencing factors are: the type of end-user price (i.e. regulated or market based) and the composition of the tax structure (e.g. VAT, excise taxes, renewable energy and capacity levies, environmental taxes). Falling wholesale electricity prices around the worldĮlectricity end-user prices differ significantly between countries. Results for the final quarter of 2020 are expected to be similar to Q3. While market prices recovered in the third quarter, thanks to higher demand and higher natural gas prices, the rolling 12-month average electricity price index continued to fall to a level 28% below the level seen in the final quarter of 2019 – and in fact below the level observed in quarter four of 2016. The most dramatic price fall took place in the Nordic electricity market, owing to abundant hydro supply. Dramatically lower demand for electricity, increases in renewable production and a fall in spot natural gas prices of between 20% and 50% (depending on the market) drove down wholesale electricity prices in the second quarter to their lowest levels since we began tracking. This trend began to reverse in 2019, when the index fell by 12% due to falling electricity demand in advanced economies, increased renewable production that ensured a plentiful supply in most markets, and falling natural gas prices.Ģ020 has seen an acceleration of this decline. The index increased by 34% between the fourth quarter of 2016 and that of 2018. To understand the underlying trends, we have combined the four-quarter rolling average indexed prices (to smooth seasonal effects) of advanced economy wholesale electricity markets, weighted by demand, to create an advanced economy wholesale electricity price index. The graph shows a selection of these markets, with prices indexed to 100 for the average in the first quarter of 2016. Since 2016 the IEA has been tracking wholesale prices in the main advanced economy electricity markets and in selected emerging and developing economy markets. A quarterly wholesale price index, therefore, can be a useful tool to track the changes in individual markets and deduce overall trends. Prices are also highly seasonal due to heating and cooling needs, with the highest prices normally experienced in the summer (United States, Japan, Australia) or winter (Europe). While wholesale electricity prices are determined by a large number of factors specific to each electricity market, changes averaged over a quarter are most often due to shifts in the balance of supply and demand and in the price of key input fuels.
0 Comments
Leave a Reply. |