Signal European industrial electricity prices remain far above US and Asian levels

Summary

European gas spot prices briefly exceeded 300 euros per megawatt-hour in August 2022, and the EU's fossil fuel import bill swelled to about 600 billion euros that year. Even after prices eased, the 2023 bill of about 427 billion euros was still 45 percent above the 2014 to 2020 average, and electricity for medium-sized industrial users cost 97 percent more than in that baseline. The IEA estimates that power prices faced by EU energy-intensive industry in 2025 were about twice those in the United States and more than 50 percent above those in China and India. Part of the gap is structural: under merit-order pricing, gas generated only about 20 percent of EU electricity in 2022 but set the price about 63 percent of the time. Draghi warns that expensive gas could keep European power prices high until the mid-2030s.