Dutch households face high electricity prices

02/05/2006 14:00

In 2006, Dutch households pay more for electricity than households in other member states of the European Union (EU). Only people living in Italy and Denmark pay more for electricity. Recently, the Netherlands decided to abolish the MEP levy. Although this decision had a price-lowering effect of 1.5 eurocent per kWh, the Netherlands maintains its position in the top 3 of most expensive countries.

Large discrepancies within the EU

Electricity prices vary widely between the countries of the European Union. In Greece, the price is almost 3.5 times as low as in Denmark. Price discrepancies are also considerable between the countries which recently joined the EU and the candidate member states. Besides local market conditions and the way in which electricity is generated, price differences are caused by energy and environmental taxes and VAT.

Electricity price standard consumer (3,500 kWh), 1 January 2006 (euro/kWh)

Electricity price standard consumer (3,500 kWh), 1 January 2006 (euro/kWh)

High tax rates

The Netherlands is among the countries where the highest tax rates are imposed. Energy tax and VAT account for more than 40 percent of the electricity price; in Denmark for almost 60 percent. As yet, most of the countries which recently joined the EU do not impose energy taxes. This results in lower energy prices in these countries, where the average base price is also lower.

Share other taxes and VAT

Share other taxes and VAT

Hefty price increase in 2006

Last year, the price for electricity in a number of countries was raised considerably. This was mainly due to higher base prices. The price increase in the United Kingdom was more than 15 percent. Prices in the Netherlands were raised by more than 5 percent. This was largely caused by higher prices for natural gas and coal which are used to generate electricity. Norway and Belgium are the only countries where prices in 2006 are below the level of 2005.

Price change January 2005-January 2006

Price change January 2005-January 2006

Dutch electricity price exceeds inflation rate

The most substantial price increases for electricity since 2000 were recorded in Ireland, Sweden, Norway and the Netherlands. The price increase in the United Kingdom over the period 2000–2006 was fairly modest.
The price rise in the Netherlands by over 40 percent is higher than the consumer price index over this period (12.9 percent). Since 1 July 2004, the Dutch electricity market has been completely liberalised.

Price change January 2000-January 2006

Price change January 2000-January 2006

Henk Verduin