A study of the retail electricity prices increasing trend in European retail electricity markets

The ascending trend in retail electricity prices since the first energy package is often blamed on the market reforms and the cost of a low carbon economy. The present study analyzes EU-28 statistical data on retail prices for the medium households and industries, for the years 2008–2017, a period of economic slowdown. We focus especially on six countries, Austria, Denmark, Germany, Greece, Latvia and Spain and examine retail prices against the degree of renewable energy sources (RES) penetration and the market liberalization in each country. We also examine the cases of three Western Balkan countries that still have a very low degree of liberalization. The increasing percentage of RES in electricity generation, the number of retailers and the market share of the main retailer are analyzed with respect to the retail electricity price for the period studied. In spite of the different specifics of each country's economy, there are certain common trends. The price increase has been found to be the result of levies and taxes, rather than the energy cost, with the burden carried mostly by households. In the cases studied here, the increase correlates with either the increase in RES or increased competition or both depending on the market structures in place during the examined period and the maturity and performance of the measures towards a liberalized electricity market and a low carbon economy.