On what does the significantly differentiated level of energy prices across countries currently depend?
What are the key determinants of the widely varying level of energy prices across countries?
It used to be that this variation in energy prices from country to country largely depended on, among other things, the content in the earth's crust of the various types of fossil energy resources. Today, in the era of the Fourth Technological Revolution, in developed and developing economies, the key factors determining the level of energy prices include, among others, the current and/or strategic energy policies under which specific types of energy are developed. In some countries it is still mainly supported systemically, i.e. financially by the state mainly the development of dirty combustion energy and in other countries the development of emission-free energy, green energy based on renewable and emission-free energy sources. Systemic state support consists of supporting specific types of energy sources through financial support from the state's public finance system. Due to the system of CO2 emission fees introduced in the European Union, in countries that continue to develop mainly dirty combustion energy, energy prices will rise rapidly in the coming years. In contrast, in countries where renewable energy sources, including wind and solar power, are being rapidly developed, it is when the sun shines and the wind blows that carbon-free energy has produced surplus energy and there have been negative prices. An example of a country where in recent years the government has continued to support the development of dirty combustion energy and block the development of renewable energy sources is the country where I operate. Currently, before the next parliamentary elections, the government has frozen the increase in energy prices through the created instrument of subsidies from the state finance system. However, in view of the fact that still more than 3/4 of electricity and even more thermal energy is produced from burning coal and lignite, it is likely that in the next few years the already one of the highest energy prices (in relation to the income level of citizens, compared to Europe) will continue to rise in Poland. As a result, energy market analysts forecast that Poland may see a large increase in energy prices in 2024. In Poland, per 1 kWh of electricity produced, there are 700-750 gr of CO2 emitted into the atmosphere. By contrast, in Europe the average of this CO2 emission is 3 times lower. High energy prices in Poland are due not to the war in Ukraine as the government lies in the media controlled by it, but to the fact that the current PIS government for 8 years has been blocking and slowing down the development of renewable and emission-free energy sources through which eclectic energy can be produced more cheaply and emission-free. Carbon-free energy production does not involve incurring additional punitive fees established in the European Union as incentive instruments for the smooth implementation of the green transition in the energy sector.
In view of the above, I address the following question to the esteemed community of scientists and researchers:
On what does the significantly different level of energy prices in different countries currently depend?
What are the key determinants of the significantly differentiated level of energy prices in different countries?
And what is your opinion on this topic?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Best wishes,
Dariusz Prokopowicz
The above text is entirely my own work written by me on the basis of my research.
In writing this text I did not use other sources or automatic text generation systems.
Copyright by Dariusz Prokopowicz
The variation in energy prices across countries depends on a complex interplay of factors that encompass both supply and demand dynamics, as well as geopolitical, economic, and environmental considerations. Firstly, the availability and accessibility of energy resources within a country are fundamental drivers. Nations with abundant reserves of fossil fuels or renewable energy sources tend to have lower energy prices due to domestic production capabilities. Additionally, energy infrastructure and transportation costs influence prices, as regions with well-developed networks may enjoy lower distribution expenses. Secondly, economic factors such as currency exchange rates, inflation rates, and income levels play a crucial role. Strong currencies and higher income levels can lead to increased energy consumption, potentially pushing prices higher. Conversely, government policies and subsidies can also significantly impact prices. Countries that heavily subsidize energy may have artificially low prices, while those with carbon taxes or environmental regulations may see higher costs. Finally, global energy markets, trade agreements, and geopolitical tensions can cause fluctuations in energy prices, making them subject to international supply and demand dynamics. As such, the variation in energy prices across countries is a complex result of numerous intertwined factors, making it a subject of ongoing economic and political analysis.
According to Energy prices and costs in Europe, the variation in energy prices across countries depends on several factors:
It’s also worth noting that the impact of high energy prices can vary across countries due to different regulations, policy responses, market structures, and contracting practices.
It depends on the availability of resources and capabilities necessary to provide energy, in addition to the presence of government support for the energy sector in some countries