In a new report on the EU to increase the retail prices of energy in Europe suggests ways to reduce the cost of consumers and preserve the competitiveness of European businesses in the global market.
Between 2008 and 2012 the retail price of energy in Europe rose substantially despite the fall in wholesale electricity and stable wholesale prices of natural gas. The differences between EU countries are also big, some consumers pay up to 4 times more than others.
The report analyzes the reasons for the rise in retail prices and suggested ways of saving money and energy for consumers and industry.
Reducing the cost of energy to consumers
EU seeks to complete the common energy market in 2014 and continue to develop energy infrastructure. A more liberal and coordinated market will enhance competition and investment and improve efficiency in several areas. This will lead to a reduction in prices and a more level playing field within the Union.
To reduce their costs, households and companies must improve their energy efficiency by using energy-efficient products and practices. Users should also benefit from better rates or switch to cheaper suppliers whenever possible.
Higher energy prices affect the poorest households hardest and the governments of the EU should consider social measures to protect vulnerable consumers.
Maintain the competitiveness of the Union
The difference in the prices of energy between the EU and other major economies is increasing. According to the International Energy Agency, these differences will lead to a contraction of EU exports of energy-intensive goods such as steel, aluminum and ceramic products.
While the EU continues to lead in the energy intensive exports, it may be necessary efforts to compensate for the higher energy prices by improving energy efficiency to reach even further.
The EU should continue its negotiations with international partners to energy subsidies and export restrictions. When necessary, the Union must also help to protect certain industrial users through fiscal transfers and exemptions and reductions in taxes and levies.
Investment in the future
As energy prices will rise in the short term, today there is need for investment in “smart” grids and technologies for more efficient production, transport and storage of energy. Together with the common energy market, these measures should lead to lower prices in the long run.
With flexible power systems, responsible consumers, competitive markets, and efficient management Europe will be better prepared to limit future price increases to pay for investments and to minimize cost increases.