Skip to content Menu IEA InfoIEA Info About Us Who we are Team Trustees Academic Advisory Council Fellows Nobel Prize Winning Economists IEA Award Winners What we do FAQs Our Supporters Contact Us Careers Jobs Economic Affairs Research Attitudes to Economic Growth Publications Economic Affairs Blog EA Magazine Shadow Monetary Policy Committee Peer Review Protocol Media Press Releases In The Media Media Enquiries Students Our Speakers International Initiative for African Trade and Prosperity Whetstone Freedom Fund Translations IEA Primers Donate Donate Now Corporate Partnerships Donate to IEA Projects Other Ways to Donate Legacy Gift Donate from USA Contact Us Events Upcoming Events Past Events Search for: Search Search for: Search IEA Info Home About Staff Jobs Contact Us We’re number one… in unaffordable electricity David Turver 7 October 2024 Uncategorized SUGGESTED previous Economics Marxism is back – but Marxists cannot shake off the Soviet legacy 3 October 2024 next Economic Theory Hayek and the Nobel Prize: 50 years on 9 October 2024 latest Uncategorized Never forgetting the absurdities of fascism 20 January 2026 Introduction Each year, the Government publishes international energy price comparisons. The data is sourced from the IEA and covers industrial and domestic gas and electricity prices. The latest data for 2023 was published a few weeks ago. The data covers 28 of the countries that are part of the IEA. The data for some countries, such as Italy and Japan, is patchy and charts containing so many lines are difficult to decipher, so the chart analysis focuses on France, Germany, UK, Korea and the USA as well as the median IEA price. The commentary does discuss other countries when appropriate. All prices quoted include taxes. Time to dig in to find out where the UK stands in the international league tables. International Industrial Gas Prices Starting with industrial gas prices (Table 5.7.1) as shown in Figure 1. Figure 1 – International Industrial Gas Prices (p per kWh) Gas prices for most of the world are at elevated levels and UK prices at 5.58p/kWh are some 7% below the IEA median. UK prices are about 17% lower than France and 10% less than Germany. The outlier in this analysis is the USA, with gas prices some five times lower than those in the UK. Canada’s industrial gas prices are even lower than the US and New Zealand’s prices are also very low. International Industrial Electricity Prices The international industrial electricity price comparison (Table 5.3.1) is shown in Figure 2. Figure 2 – International Industrial Electricity Prices (p per kWh) UK industrial electricity prices at 25.85p/kWh are the highest of the 28 countries covered by the IEA report. UK prices are some four times those in the US, 2.6 times those of Korea and 46% higher than the IEA median. Given that UK gas prices are below the IEA median and those of France and Germany it cannot be gas prices that are driving UK electricity prices so much higher than elsewhere. Canada, Norway, Finland, Sweden, New Zealand and Portugal all have industrial electricity prices less than 10p/kWh. We cannot hope to compete in traditional energy intensive industries or industries of the future like making batteries or AI with such extortionate electricity prices. International Domestic Gas Prices Domestic gas prices (Table 5.9.1) paint a similar picture to industrial gas prices as shown in Figure 3. Figure 3 – International Domestic Gas Prices (p per kWh) UK prices are at the IEA median of 10.17p/kWh, slightly above those in France and a bit below those in Germany. The price differential compared to the US is less pronounced, but domestic gas prices in the UK are still 2.5 times those in the US and roughly double those in Korea. International Domestic Electricity Prices Sadly, UK domestic electricity prices (Table 5.5.1) are even worse than industrial prices when compared to the IEA median, as seen in Figure 4. Figure 4 – International Domestic Electricity Prices (p per kWh) At 36.39p/kWh the UK has the highest domestic electricity prices in the IEA, some 80% above the median of 20.22p/kWh. UK prices are 2.8 times those of the US and 3.5 times prices in Korea. Prices in Germany are slightly lower than the UK, with France’s prices just above the IEA median at 20.57p/kWh. Conclusions What are we to make of all this? When it comes to gas prices, the UK is reasonably competitive compared to the IEA median. However, there are many countries with much lower industrial gas prices, notably the US and Korea. However, when we turn to electricity prices, the UK is woefully uncompetitive in both industrial and domestic markets with the highest prices among the 28 countries covered by the IEA. This level of price differential is an existential threat to the economy. Moreover, with gas prices around the median level, it cannot be gas that is driving the UK’s electricity prices well above those of international competitors. As discussed previously (here and here), it is the ~£11bn of renewables subsidies, £4.6bn of carbon taxes in the form of the Emissions Trading Scheme, £2.5bn of grid balancing costs and £1bn of capacity market costs that are driving electricity prices skywards. There is an extra £112bn of transmission network costs in the pipeline to connect remote, intermittent renewables to the grid that will continue to push up prices. Sadly, the Government has made a decarbonised grid by 2030 one of its five missions for Government. Pushing even more renewables on to the grid is bound to increase electricity costs even further, crushing our competitiveness. This is in direct contradiction to Labour’s number one mission of increasing economic growth. As discussed earlier, these two missions are incompatible; we cannot have top tier growth with the highest electricity prices in the developed world. Having the highest electricity prices in the world ought to trigger a national emergency response. The Government’s primary mission should be to cut energy prices because cheap energy is the key to unlocking growth. They should focus first on ending subsidies for renewables and cancelling any further auction rounds. This would stop the rot at source. Second, they should abolish the Emissions Trading Scheme to bring down the cost of gas-fired generation. The Government would then need to invest in new sources of gas supply by encouraging more North Sea drilling and lifting the moratorium on fracking. In the longer term, there should be a renewed focus on nuclear in the form of conventional reactors, small modular reactors (SMRs) and advanced reactors. These will need to be supplemented by gas-fired generation for the time being until nuclear is able to respond effectively to rapid changes in demand. We can but hope that reality dawns on the Government before the economy collapses under the weight of Net Zero. STOP THE PRESS: We’re going to have to wait a long time for reality to dawn because the Government announced on Friday plans to spend £22bn of our money on carbon capture and storage which will reduce efficiency and push up the costs of gas-fired electricity even further. Will the last person to leave Britain please blow out the candles, because there won’t be any lights left to switch off. – David Turver is a retired consultant and CIO who now writes on energy and Net Zero. – This article was originally published on David Turver’s Substack, Eigen Values. 2 thoughts on “We’re number one… in unaffordable electricity” Sven Becker Posted 30/12/2024 at 06:28 | Permalink Really appreciate the detailed breakdown on global electricity prices. It’s quite surprising to see the UK’s rates so high compared to countries like the USA and Canada. With such differences in prices, how are industries managing the costs? Also, found this site on international prices, https://world-prices.com; not sure how reliable the data is, but it might be worth a look. Simon (Information Analyst) Posted 06/01/2025 at 12:28 | Permalink Why does this article completely ignore the elephant in the room – UK electricity being bought from Germany and France who literally subsidise their markets with UK users. That is 42 billion during conservative rule and will be another 3 bilion each year onwards – That is the real cost. This isn’t a Labour issue – its a cross party problem. Comments are closed. SHARE Newsletter Signup The IEA is an educational charity and free market think tank. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. About the IEA Donate About Us Team What we do Privacy Policy Contact Us Donate Now Publications In The Media Press Release Media Enquiries Newsletter signup Keep in touch with the IEA Donate Like Follow Watch Follow Copyright © Institute of Economic Affairs | REGISTERED IN ENGLAND 755502, CHARITY NO. CC/235 351, LIMITED BY GUARANTEE  × We are using cookies to give you the best experience on our website. You can find out more about which cookies we are using or switch them off in settings. Accept Reject Settings Change cookie settings Close GDPR Cookie Settings Privacy Overview Necessary Analytics Privacy Policy Privacy Overview This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. Necessary Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings. Enable or Disable Cookies Enabled Disabled Show details Hide details Name Provider Purpose Expiration _cf_bm Cloudflare Identifies and blocks automated bot traffic to protect the website from abuse and attacks. 30 minutes cf_clearance Cloudflare Stores proof that a visitor passed a security or CAPTCHA check to access protected pages. 1 year AWSALBTG Amazon Web Services Load balancing cookie to ensure website stability and performance. 7 days AWSALBTGCORS Amazon Web Services Used by AWS to maintain user sessions and route traffic to the correct server. 7 days __stripe_mid Stripe Fraud prevention and secure payment processing. 1 year __stripe_sid Stripe Maintains payment session security and fraud protection. 30 minutes m Stripe Used for fraud detection and payment security. 2 years hmt_id hCaptcha Distinguishes human users from bots for website security. 1 year ab_experiment_sampled Substack Used to test different versions of site content. 1 year ab_testing_id Substack Identifies which version of the website a user sees. 1 year ajs_anonymous_id Substack Assigns an anonymous visitor ID used by Substack to recognise repeat visitors and track interactions with embedded newsletters. 1 year disable_experiments Substack Stores whether experimental features are enabled. Session disable_html_pixels Substack Controls tracking pixels inside embedded newsletters. Session NID Google Pay Used when processing Google Pay transactions and for fraud prevention. 6 months __cflb Cloudflare Maintains load-balancer routing to ensure requests go to the same backend server. 1 day moove_gdpr_popup Moove Storing cookie settings data. 30 days Analytics This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages. Keeping this cookie enabled helps us to improve our website. Enable or Disable Cookies Enabled Disabled Show details Hide details Name Provider Purpose Expiration _ga Google Analytics Distinguishes users for website usage statistics. 2 years _ga_CP6LKG5BM3 Google Analytics Stores session and interaction data for analytics reporting. 2 years Privacy Policy More information about our Privacy Policy Enable All Reject All Save Changes