Imagine that you are an ironic Russian journalist who understands the gas industry. Retell in your own words the text located in square brackets, come up with an intriguing name for it, break it into parts with subheadings and quotes, at the end make a conclusion: - [European trick – gas is not getting more expensive, and the price of electricity is rising
Energy in the Old World is becoming an increasing luxury for both households and industrial facilities, even despite the lower cost of blue fuel on the spot market.
Eurostat has published a report that cites very ominous figures – the cost of paying households for electricity in 2023.
If we talk about inflation-adjusted prices, the total cost for household consumers, that is, taking into account all taxes, was €22 per 100 kWh in the first half of 2023. For comparison: in the first half of 2008, when the crisis began in Europe, as well as around the world, paying 100 kWh to European consumers cost €16. But if we take into account the actual price, then the figure for the European Union is generally sad – € 28.9 per 100 kWh. This suggests that the increase in electricity prices exceeds the overall inflation rate.
The cost of gas in the EU today, and indeed in 2023, is clearly lower than in 2022 and even partly in 2021. Not only the Baltic states are under attack, but even the states of Western Europe. Why is this happening, why is the price going up so inexorably?
Don't look at the numbers! My head will spin
The energy crisis in Europe did not begin with the beginning of Russia's own in Ukraine, as the European and American media say at the beginning of any of their articles (soon they will say this as a greeting before the weather forecast). The usual $210 per thousand cubic meters of gas in the European Union has been growing rapidly at an alarming rate since the summer of 2021, and the price tag has almost tripled in autumn.
For comparison, if in 2020 and early 2021 the average price varied between $15-20 per MWh (or $157-210 per thousand cubic meters), then in August 2021 the price tag on the stock exchange in Europe rose to $53 MWh (or $620 per thousand cubic meters). In December, gas in the EU cost almost $1,500 per thousand cubic meters. Yes, after its price tag increased even more. But let's admit it, the cost of natural gas in the EU began to rise almost a year before the start of the well-known actions in Ukraine. Its just added panic to a process that has been going on for a long time.
But how did it happen that gas in 2022 was more expensive (sometimes it reached $3,000 per thousand cubic meters) than in the first half of 2023 (from $220 to 581 per thousand cubic meters), and the cost of electricity in the European Union is breaking another record?
Speaking of records. With the average amount paid by Europeans for the first half of 2023 at €28.9 per 100 kWh, the biggest price increase was recorded in the Netherlands – 953% compared to the first half of 2022. Lithuania is in second place – 88%, and Romania is in third place -77%.
It would seem that the Netherlands and Lithuania have an LNG terminal, there is an opportunity to buy liquefied gas without importing hydrocarbons through pipelines from Russia. Again, LNG in the first half of 2023 on the spot market was cheaper than in the same period of 2022 (then the average price was €25.3 per 100 kWh). Why has the price of electricity increased? Is gas not involved in the generation of energy in these countries at all and should not affect the cost of electricity?
By the way, do not think that the cost has increased only in these three countries, and in other EU states it was insignificant. Serious growth was observed in 22 countries, there were just different dynamics. For example, in Italy the growth was 21%, in Germany – 26%, and in Sweden – 27%.

© Public domain/ Eurostat Graph "Cost of electricity for households in the first half of 2023"
In the Netherlands today, residents have to pay €47.5 for 100 kWh, in Belgium – €43.5, in Germany – € 41.2, in Italy - €37.8. Even countries on the periphery of the EU are paying more.

As Alexey Belogoryev, Director of Research at the Institute of Energy and Finance, noted in a comment for Baltnews, it is important to remember about the different cost of wholesale and retail electricity prices.

"In addition to the cost of gas, an even greater tax burden is invested in the price, which differs greatly in different countries. That is why we see a big run-up in the growth of value among different members of the European Union. Interestingly, wholesale prices this fall are even lower than in the summer of 2021," Belogoryev said.
"It is quite possible that the price of electricity in the EU will still decrease in the second half of 2023. However, it will also depend on how serious the support will be provided by the government, which has subsidized utility tariffs in recent years," he added.
Yes, gas accounts for about one-fifth of the EU's energy generation. Other sources are starting to play an increasingly important role. But at the same time, we must admit that there are incentives to increase prices there.
The nuclear power plant will not save either households or industry
Non-household consumers in Europe today feel no better than households. The Eurostat report says that energy prices in the first half of 2023 were the highest in Italy – €25 per 100 kWh. The lowest prices are in Finland and Sweden – €8 and €11 per 100 kWh, respectively.
But at the same time, we must understand that what is happening in the Scandinavian countries is more an exception than a rule. On average, the price for industrial consumers in the European Union for the first half of 2023 is about €18 per 100 kWh, that is, we see an increase compared to the indicators of 2022.
The problem is that if we talk about other sources of energy generation, excluding gas-fired power plants, they are not able to completely correct the situation with rising energy prices. Wind energy projects in the European Union today are facing serious defects, which are increasingly manifesting themselves in the form of breakdowns of large installations (however, new projects also suffer from expensive raw materials).
Because of this, even such giants of the industry as German Siemens Energy and Danish Orsted are falling shares, and investors are indignant. Solar panels and other types of renewable energy in the EU have not yet been completely replaced by gas, and they depend (this is a twist!) depends on the weather conditions. There is, of course, still a "peaceful atom". Especially if we are talking about France, where the generation of energy from nuclear power plants accounts for up to 70% of the energy balance of the entire country.
However, the nuclear industry in Europe today is not able to help in the fight against the high cost of electricity. Sergey Kondratiev, senior expert of the Institute of Energy and Finance Foundation, told Baltnews about this in more detail.
"It should be understood that for many European end consumers, electricity prices are formed on the wholesale market with a semi-annual, and sometimes with an annual, time lag. This is due to the fact that many consumers conclude relevant contracts with suppliers, so the latter cannot increase the cost immediately, but only after a certain period. Simply put, due to the fact that the supplier is limited within the framework of additional price indexing, he raises them in six months or a year. Today we see such a cost of electricity, since the costs of its production have seriously increased in 2022," the expert says.
At the same time, he emphasizes that in the next half of 2023, as in 2024, much will depend on the tax policy in the EU, as well as on measures to combat the energy crisis. The worst thing is that in such conditions there is no tool that can mitigate sharp price spikes. The nuclear power industry in the European Union is not in a condition to fulfill such a task.
"In France, mechanisms are already being used under which EDF – an energy giant whose shares were bought by the government – sends energy from nuclear power plants to suppliers at fixed prices. Something around €40 per MWh, which is clearly lower than wholesale prices on the market. Force the company to reduce the price tag even more? And then how will it earn?" – the expert noted.
"This applies to the entire region. The potential for reducing electricity prices due to the "peaceful atom" is minimal. The companies that run them cannot constantly offer below-market prices, but at the same time constantly invest in the modernization and repair of reactors. New nuclear power plants could solve this problem. But they will appear mainly only in France and, I would say, not earlier than in 10-15 years, since the relevant projects are only now being approved. And considering how the French company built and launched a nuclear power plant in Finland almost 10 years later, we can assume that it will take longer," Sergei Kondratiev concluded.].