Eurostat news release on electricity and gas prices: Implications for the European heat pump market

May. 23, 2014 | Ratio of electricity vs. gas prices reveals Europe's most and least favourable market conditions for heat pumps

Price increase slowed down

The price for household electricity in the EU28 rose by 2.8% on average between the second half of 2012 and the second half of 2013. In the period from 2011 to 2012 the increase was 6%.

Household gas prices increased by 1% on average in the EU28 between the second half of 2012 and 2013, after a rise of 8.2% between the second half of 2011 and 2012.

Price levels in PPS

The purchasing power standard is an artificial common reference currency that eliminates general price level differences between countries. By using this measure, price comparisons between countries become easier to interpret and some interesting patterns are revealed.

Electricity:

The lowest household electricity prices were found in Finland (12.8 PPS per 100 kWh), Luxembourg (13.7), Latvia (14.0) and France (14.1), and the highest in Cyprus (28.2), Germany (28.1), Portugal (26.2) and Romania (25.9).

Furthermore, the price for electricity is significantly below average (EU28: 20.1) in Sweden (15.7), the United Kingdom (17.5) and the Netherlands (17.6).

Gas:

The lowest household gas prices were recorded in Luxembourg (4.7 PPS per 100 kWh), Latvia (5.2), the United Kingdom (5.7), Belgium (6.0) and Romania (6.2), and the highest in Bulgaria (11.6), Portugal (11.5), Greece (10.1), Lithuania (10.0) and Spain (9.8).

Electricity vs. gas:

Operating costs of heat pumps and gas boilers depend on the price of electricity and gas. Accordingly, the ratio of electricity vs. gas prices plays an important role in the investment decisions regarding heating solutions.

On the basis of Eurostat data we computed this ratio which is shown in table 1. A relatively low ratio suggests an energy price structure which is in favour of heat pumps and vice versa.

The five highest ratios - indicating a price structure in favour of gas - can be observed in Germany (4.26), Romania (4.18), Ireland (3.33), Belgium (3.3) and Slovakia (3.21). The five lowest ratios - indicating a price structure in favour of heat pumps - are found in Sweden (1.67), Bulgaria (1.7), Greece (1.92), France (2.17) and the Netherlands together with Lithuania (both 2.26).

 

Source and more detailed information: Eurostat (link to the document).