HSE told who in the EU is under more pressure from rising electricity prices

The building of the National research University Higher school of Economics (HSE) in Moscow. Archive photo

MOSCOW, 23 Jul – RIA Novosti/Prime. The continued growth in electricity prices in Europe have a higher impact on the population because the EU industry is quite energy efficient and supported by the state, told RIA Novosti Director of the Center for research in power engineering, HSE Sergey Sasim.

Electricity prices in Europe are at record high levels. As the expert noted, the basic price of electricity in the region for the first time exceeded 500 euros, “and it’s more than a fivefold increase since last year.” The result of evolving dynamics for the EU is the increase in the cost of electricity.

“It should be noted that the EU industry makes very efficient use of electricity, which, of course, reduces the sensitivity of energy-intensive companies to increase energien. In addition, the number of EU countries, in particular Germany, are a serious program of state support for large enterprises. Most likely with an unpleasant increase in payments will be faced by households, the availability of electricity which will reduce,” he said.

Sasim explained that in addition to climatic reasons that led a number of producers to reduce production, the most important reason for such a jump was the increase in gas prices. Electricity markets in the EU, according to the expert, based on the marginal model, which assumes that the final price of electricity for the next day tied to the price of the most expensive fuel required to meet the projected demand. The increase in gas prices in this model inevitably accelerates the price of electricity.

Such growth, according to experts from the HSE, creates an incentive for prompt response from the European economies. In addition, the deterioration of international relations narrows down the potential solutions in the field of gas generation is pushing to revise the traditional power balance in Europe. In particular, the expert believes that in such conditions it is very likely increase in the use of coal-fired plants.

“However, in my opinion, the situation will likely increase the intensity of the transition to alternative power generation. High electricity prices form a favorable environment for investment in the implementation of the transition to renewable energy sources and reducing dependence on conventional energy,” also said Sasim.