Wholesale electricity prices in Europe's major economies surge to unprecedented levels
Date
11/20/2024 7:12:18 AM
(MENAFN) Wholesale electricity prices in Europe's major economies have surged to unprecedented levels, reaching their highest point in over a year. This price hike adds to the pressure on businesses already grappling with weak demand and diminishing consumer confidence, exacerbating the region's ongoing economic crisis.
Market data reveals that wholesale electricity prices in Germany, France, the Netherlands, Spain, and Poland hit their highest levels in at least 20 months this November. In Italy, though the increase is smaller, prices remain the highest among Europe's major economies.
As winter sets in and heating demand rises, electricity prices are expected to keep climbing, presenting new challenges for economies already struggling with slow growth since the Russian invasion of Ukraine in 2022.
The data shows that the average wholesale electricity price in Germany since March 2022 has been 138 euros per megawatt-hour, a staggering 280% increase compared to 2016-2019 levels. This surge has led to four times higher energy costs for both consumers and businesses.
Countries such as France, Italy, and the Netherlands saw price hikes of over 200%, while Poland and Spain experienced increases of 180% and 103%, respectively.
The heavy industry sector, including steel, chemicals, and fertilizers, has been particularly hard-hit, with production dropping significantly since the Russian invasion and showing slow recovery. Manufacturing sectors like turbines and engines also saw a 30% decline from previous peaks, while the German automotive industry cut its production by over 30% compared to pre-pandemic levels.
This industrial downturn has been mirrored in overall economic performance, with Germany's GDP growing by just 0.4% annually since 2022, compared to an average annual growth of 2% in the previous decade. Other countries like Poland, the Netherlands, and France are facing similar slowdowns.
The crucial challenge for Europe lies in balancing affordable energy with increased investments in clean energy infrastructure to ensure long-term economic sustainability amid these growing pressures.
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