Tom Howes Refining Forum

Tom Howes, DG EnergyEuropean Commission

Energy prices and the EU response

What was driving electricity prices 2008-2012?

Source: Eurostat. Includes taxes in the case of households; excludes VAT and other recoverable taxes in the case of industry but other industry exemptions are not included (not available) .

18.5%

30% 127%

36%7.5%

-3%17%

18%

2014 report …EU…

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EU electricity and gas prices compared with major trading partners

Electricity end-use prices for industry, 2012

Gas end-use prices for industry, 2012

Sources and notes: see p. 177 and 179 of SWD (2014) 20

..international..2014 report

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2014 June Energy Council: Member States requested follow-up report by 2016

Confirmed in Commission's 2015 Energy Union Strategy:Biennial reports

Initiative status: report to be adopted in 2Q 2016 • Discussions with Eurostat, Eurelectric, others on data issues (details,

quality, sources…) -> Commission (Eurostat) legislative proposal under discussion

• Ad hoc data gathering exercise with Member States• Sluggish economic growth/subdued demand; increased supplies (oil,

gas, LNG; lower commodity prices generally)

Update… ..since January 2014..

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1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 112008 2009 2010 2011 2012 2013 2014 2015

0

5

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GAS PRICES International wholesale gas prices: Convergence after

the storm

Henry Hub (US) NBP (UK) Japanese landed price

USD/mmbtu

Fukushima March2011

US gas revolution

International comparison of wholesale prices: EU versus US, Japan and Australia

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1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9

2010 2011 2012 2013 2014 2015

0 €/MWh

20 €/MWh

40 €/MWh

60 €/MWh

80 €/MWh

100 €/MWh

120 €/MWh

140 €/MWh

160 €/MWh

180 €/MWh

200 €/MWh

Japan Platts PEP US price Australia

ENERGY IMPORT BILL

72013 2014 2015

0

50

100

150

200

250

300

350

400

450

404

358

264293

271

181

9574 71

16 14 12

(Estimated)

TotalOilGasCoal

billi

on E

uros

-11 %

-7 %

-23 %

-26 %

-33 %

-4 %

• 2nd report on energy prices & costs Study started in October 2015

+econometric analysis of drivers detail on price components Electricity, gas petroleum products included more detail on sectors and households; EU & international

coverage Other Commission work under way (esp. on energy intensive

industries, with further work by DGs CLIMA and GROW) Feedback from stakeholders: Industry Conference, contacts

with institutional actors (Jan/Feb/March) Final report of study (end of March) Commission internal work on documents April-May Adoption Summer 2016

NEXT STEPS

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Sub-components

Different industry consumption bands

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Close up look at energy intensive industries