Why are electricity prices rising so fast in Europe?
Businesses and consumers in Italy, Spain, UK and Greece were shocked this autumn with unseen sharp price increases for oil, gas and electricity. Seasonal price hikes are common for oil and gas during the peak demand months in winter. but why electricity?
As explained in a recent article published by swissinfo.ch, some European countries are still producing electricity by burning fossil fuel, mainly coal and gas. Italy is still producing about 50% of its electricity with gas and UK 40%! These countries are hit twice by the sudden raise of gas price, driving up the electricity price.
How about Switzerland? The country is not using gas to produce electricity, so the prices are pretty stable overall, with a forecast of +3% on average for 2022. However, most of the price increase stems from imported electricity needed in the winter months. This shows that Switzerland has to find a way to significantly increase its share of renewable electricity production in the next years.