Cost Of Electricity Eu

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Minute Lectures

The price of a kWh in Europe
Overview
This minute lecture presents concisely:
• The main components of the electricity price • Its price evolution over the past 10 years • Themain drivers behind this evolution

All information in this minute lecture is based on publicly available information from Eurostat. It shows averages, not necessarily reflecting individual marketconditions.
Acknowledgement
This presentation is based on the report ‘Review of European Electricity Prices’ prepared by KEMA for Eurelectric Nov 2005

Minute Lectures

The price of a kWh inEurope
The main components of the electricity price

Minute Lectures

The price of a kWh in Europe
1) Taxes, levies and surcharges
This part includes all charges that can be directly allocated tothe end use of electricity:
• VAT (only for residential customers) • Direct taxes on production, transmission and distribution of electricity • Purchase obligations for energy from renewables or CHP• Carbon taxes • Stranded cost levies • Surcharges for public service obligations • ...

Minute Lectures

The price of a kWh in Europe
2) Network Charges
All regular payments for connection toand use of the transmission & distribution system Including payments for system services and metering charges Significantly lower for industrial users directly connected to the medium or high voltagenetwork

Minute Lectures

The price of a kWh in Europe
3) The residual cost or ‘energy component’
The ‘energy component’ consists of
1) The wholesale price for energy production 2) The cost ofthe utility company for selling the kWh’s to residential or industrial end-users

The wholesale cost is influenced by two main aspects:
1) The fuel price (especially carbon fuels – oil, coal andgas) 2) The efficiency of production

Minute Lectures

The price of a kWh in Europe
The influence of liberalization
The above analysis shows that:
• • • Only a part of the electricity price...
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