This one chart shows Europe’s struggle with high energy prices
Data DiveHigh energy prices are holding back Europe’s manufacturing industry, and recently compiled data highlights why the bloc is worried more business will flee the Continent.
Europe’s industrial electricity prices skyrocketed in recent years, accentuating its competitive disadvantage vis-a-vis the United States at a crucial time in the energy transition, when both regions are trying to carve out a place for themselves in the nascent cleantech manufacturing market otherwise dominated by China.
Between 2019 and 2023, the United Kingdom’s industrial power prices grew by 124%, Hungary’s by 171%, Poland’s by 137% and France’s by 93%, according to data from the U.K. Department for Energy Security and Net Zero, which combines data from Eurostat and the International Energy Agency.
During the same period, U.S. industrial power prices grew only 21%. A partial analysis of this data was initially published by Marko Jukic, an analyst at Bismarck Analysis, a consulting firm based in San Francisco.
Boosting competitiveness is top of Europe’s agenda as the bloc experiences a gradual deindustrialization.
In 2023, industrial prices in the European Union (which does not include the U.K.) were 158% higher than in the U.S., think tank Bruegel found, a result of the 2022 energy crisis following Russia’s invasion of Ukraine.
The EU, a major energy importer, had to scramble to substitute cheap piped Russian gas for more expensive liquefied natural gas from around the world. Higher electricity prices followed the higher gas prices. Higher network costs and energy taxes also contributed.
Prices declined a little in 2024, according to a recent analysis from Brussels-based power lobby group Eurelectric, because industrial consumption remained low.