Energy prices UK: why Britain has highest electricity costs in Europe – how other countries compare

As households prepare for surging energy bills this October new research reveals Britain has some of the highest energy costs in Europe.

Britain has the highest electricity costs in Europe, with consumers paying almost eight times as much as in some other countries, new research shows.

Energy users in Britain were paying 64.21 Euro cents per kilowatt hour (kWh) for electricity in August, according to analysis produced by the Household Energy Price Index, while natural gas prices were the 11th highest in Europe at 18.4 cents per kWh.

Despite some support from the Government, energy costs are set to soar in a couple of days time. But not everywhere in Europe is being hit as hard by rising costs – so why is Britain more susceptible to high prices?

Energy prices are surging in Britain this October.

Rafaila Grigoriou, data science lead at the Housing Energy Price Index, told NationalWorld there is no single answer for Britain’s soaring energy costs. “Prices (including the price cap) are highly related to the wholesale price, so customers are not very insulated from wholesale increases,” she said. Operating costs for suppliers are relatively high in the UK, she added, due to a high level of obligations such as green energy levies.

The Household Energy Price Index also said Britain’s energy suppliers have had small profit margins  – or have operated at a loss –  for a long time, meaning they have less ability to absorb increased energy costs than in some other markets. “Britain’s prices have also not yet benefited from the government support measures such as subsidies experienced in many other markets,” Ms Grigoriou added.

Whatever the reason for high costs, experts are divided on how to bring the prices back down, with some pushing for an acceleration of green energy while others – including, now, the Government –  argue that other forms of energy generation, like fracking, would make a difference. Last week the Government controversially lifted the ban on fracking in a bid to ‘bolster energy security’.

So how do Britain’s prices compare to those in other European countries? Here we reveal how energy costs vary across the continent and what needs to be done to bring them back down.

Which countries pay the most for electricity?

Britain’s electricity prices (64.21 cents per kWH) are greater than any European country and almost twice as much as the EU average of 30.81 cent per kWh. The nation’s electricity costs have consistently been higher than the EU average since 2015 (when the Household Energy Price Index comparison begins) but prices have surged in recent years, soaring by 131% between August 2021 and August 2022. Only three other countries (Italy, Netherlands and Estonia) have seen a faster rate of increase during that time. Northern Ireland is not included in these figures.

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Consumers in France were paying 25.01 cent per kWh for electricity in August, while in Germany prices were at 44.56 cent per kWh. The interactive map below shows how much electricity cost consumers in each country last month. Can’t see the map? Click here.

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The figures include network costs and taxes. The analysis was based on typical residential customers living in the capital cities in each country.

How do Britain’s gas prices compare to other European countries?

Although not the highest in Europe, Britain’s natural gas prices were still greater than the EU average in August. Consumers in Britain were paying 18.4 cents per kWh, 16% greater than the average of 15.61 cents per kWh across the 27 member states. Unlike electricity costs, gas prices only recently overtook the EU27 average in February 2022.

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Figures show the Netherlands had the highest natural gas prices in Europe last month with prices at 34.08 cents per kWh. This was followed by Denmark with 31.3 cents per kWh and Sweden with 23.55 cents per kWh. You can use the interactive map below to compare last month’s gas prices across European nations. Can’t see the map? Click here.

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How do we bring down energy costs?

Bringing down energy costs remains a priority for governments across the continent – with some campaigners believing it can only be done by accelerating renewable, green energy.

Tessa Khan, director of Uplift (part of the Warm this Winter coalition), said: "The UK’s bills are higher than other European countries because we are exceptionally reliant on gas to heat our homes and gas is a chunk of our electricity mix – 85% of homes in this country are gas heated.

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“The clearest way to bring down energy bills is therefore to reduce our reliance on gas by accelerating the transition to renewable energy, which is orders of magnitude cheaper than gas, so that consumers are insulated from volatile international gas prices."

‘Britain’s broken energy system’

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said the Household Energy Price Index data shows “just how broken Britain’s energy system is”.

"Profits made by firms involved in producing, trading and supplying energy to households are driving up the costs we all pay - and ultimately force people into fuel poverty,” he said.

“Those that do well from this crisis should be made to pay for the damage being caused through a real windfall tax, rather than the watered down version the Government currently advocates. We need to see emergency financial support for the most vulnerable and investment in energy efficiency measures that will pay for themselves in the next few years and create 140,000 new jobs.

"Failure to do so will see huge pressures put on the NHS and social care as the system is put under strain from the knock on impact of so many people living in cold damp homes."

What is the UK Government doing to help?

A spokesperson for the Department for Business, Energy and Industrial Strategy said the figures do not account for the direct financial support being offered in the UK.

The spokesperson said: “The Energy Price Guarantee means that from 1 October a typical UK household will now pay an average £2,500 a year on their energy bill for the next two years, saving the average household around £1,000 a year.

“Vulnerable households will also continue to receive £1,200 of support and all other support payments promised for this winter will remain in place.”