Electricity pricing

Electricity pricing (sometimes referred to as electricity tariff or the price of electricity) varies widely from country to country, and may vary significantly from locality to locality within a particular country. There are many reasons that account for these differences in price. The price of power generation depends largely on the type and market price of the fuel used, government subsidies, government and industry regulation, and even local weather patterns.

Basis of electricity rates

Electricity prices vary between countries and can even vary within a single region or distribution network of the same country. In standard regulated monopoly markets, electricity rates typically vary for residential, commercial, and industrial customers. Prices for any single class of electricity customer can also vary by time-of-day or by the capacity or nature of the supply circuit (e.g., 5 kW, 12 kW, 18 kW, 24 kW are typical in some of the large developed countries); for industrial customers, single-phase vs. 3-phase, etc. If a specific market allows real-time dynamic pricing, a more recent option in limited markets to date typically following the introduction of electronic metering, prices can even vary between times of low and high electricity network demand.

The actual electricity rate (cost per unit of electricity) that a customer pays can often be heavily dependent on customer charges, particularly for small customers (e.g. residential users).^[1]

The cost also differs by the source of the electricity. In the U.S. in 2002, the typical cost of electricity from different sources is around: Coal: 1-4 cents; Gas: 2.3-5.0 cents; Oil: 6-8 cents; Wind: 5-7 cents; Nuclear: 6-7 cents; Solar: 25-50 cents. However, electricity costs vary greatly. Renewable sources reach grid parity in parts of the world where conventional power plants based on fossil fuel are costly enough (e.g. transportation costs of diesel to isolated communities). The varying costs involved in producing electricity lead to great variance in average electricity rates for residents of different states in the U.S.

In many countries the tariff is considerably lower for high electricity users compared to electricity savers. In Finland the low electricity users in househouilds may pay ca 30% fixed price.

Price comparison

Electricity price statistics Europe 2014^[2]

The table below shows simple comparison of current electricity tariffs in industrialised countries and territories around the world, expressed in US dollars. Whilst useful for comparing world electricity prices at a glance it does not take into account a number of significant factors including fluctuating international exchange rates, a country's individual purchasing power parity, government electricity subsidies or retail discounts that are often available in deregulated electricity markets.^[3]

For example, in 2012, Hawaii residents had the highest average residential electricity rate in the United States (37.34¢/kWh), while Louisiana residents had the lowest average residential electricity costs (8.37¢/kWh). Even in the contiguous United States the gap is significant, with New York residents having the highest average residential electricity rates in the lower 48 U.S. states (17.62¢/kWh).^[4]

A comparative list of June 2009 prices for Europe may be found in the European Household Electricity Price Index.^[5]

Global electricity price comparison

For comparison:

• 1 cubic metre of methane contains about 38 MJ LHV of energy or about 10.5 kWh
• 1 litre of gasoline/petrol contains 33 megajoules or about 9,2 kWh
• 1 US gallon of gasoline contains 120 megajoules or about 33,3 kWh
• 70 standard alkaline AA batteries contain 1 megajoule or about 280 Wh

Country/Territory	US cents/kWh	US cents/megajoule	Date	Source
American Samoa	38.3 to 40.4	10.64 to 11.22		[6]
Argentina (Buenos Aires)	3.1^[a]	0.86	2006	[3][7]
Argentina (Concordia)	19.13^[a]	5.31	Jun 14, 2013
Electricity sector in Australia	varies by state anywhere from 15-22 per kWh mans a service fee of 70 cents a day	6.11 to 11.06	Aug 23, 2012	[8][9]
Electricity sector in Bahrain	0.79 to 4.23 (0.79 for first 3000 kWh; 2.38 for 3001-5000 kWh and 4.23 for every additional kWh. Exchange rate used from BHD to USD is 0.378)		Aug 19, 2015	[10]
Electricity sector in Bangladesh	2.95 to 9.24		Mar 13, 2014	[11]
Electricity sector in Belgium	29.08	8.08	Nov 1, 2011	[12][13]
Electricity sector in Bhutan	1.88 to 4.40	0.52 to 1.22	Mar 23, 2012	[14][15]
Electricity sector in Bulgaria	13.38 day (between 7:00-23:00 DST); 9.13 night	2.54 to 3.72	Oct 29, 2014	[16][17][18]
Electricity sector in Brazil	16.20	4.5	Jan 1, 2011	[19]
Electricity sector in Cambodia	15.63 to 21.00 in Phnom Penh	4.34 to 5.83	Feb 28, 2014	[20][21]
Canada, Ontario	14.6		2015	[22]
Electricity sector in Canada, Ontario, Toronto	6.52 to 11.69 depending on time of day plus transmission, delivery, and other charges of about 3.75 per kWh	1.81 to 3.25	Feb 9, 2014	[23]
Canada, Quebec	5.41 for the first 30 kWh/day then 7.78 + 40.64/day for subscription fee		2012	[24]
Electricity sector in China	7.5 to 10.7		May 17, 2012	[25]
Electricity sector in Chile	23.11		Jan 1, 2011	[26][27]
Electricity sector in Colombia (Bogota)	18.05		Jun 1, 2013	[28][29]
Electricity sector in Cook Islands	34.6 to 50.2			[6]
Electricity sector in Croatia	17.55		Jul 1, 2008	[30]
Electricity sector in Denmark	33		May 1, 2015	[12][13]
Electricity sector in United Arab Emirates	6.26 to 10.35 (plus 1.63 fuel surcharge)			[31][32]
Electricity sector in Egypt	Priced into sections at a kWh/Month, subsidized^[a] 1.06 @ 0-50 kWh/M 2.05 @ 51-100 kWh/M 2.26 @ 0-200 kWh/M 3.39 @ 201-350 kWh/M 4.8 @ 351-650 kWh/M 8.48 @ 651-1000 kWh/M 10.46 @ 1000+ kWh/M		Jul 17, 2014	[33] [34]
Electricity sector in Ethiopia	6.7 to 7.7^[a]		Dec 31, 2012	[35]
Electricity sector in Fiji	12 to 14.2			[6]
Electricity sector in Finland	20.65		Nov 1, 2011	[12][13]
Electricity sector in France	19.39		Nov 1, 2011	[12][13]
Electricity sector in Germany	32.04		Feb 1, 2015	[36]
Electricity sector in Romania	18.40		Jun 26, 2013	[37]
Electricity sector in Guyana	26.80		Apr 1, 2012	[38]
Electricity sector in Switzerland	25.00		Jan 6, 2014	[39]
Electricity sector in Hungary	23.44		Nov 1, 2011	[12][13]
Electricity sector in Hong Kong	12.04 to 24.05		Jan 1, 2013	[40][41]
Electricity sector in India	0.1 to 18 (Average 7)		Feb 1, 2013	[42]
Electricity sector in Indonesia	11		Jul 21, 2015	[43]
Electricity sector in Iceland	5.54		Nov 8, 2015	[44]
Electricity sector in Iran	2 to 19		Jul 1, 2011
Electricity sector in Iraq	Residential pricing per kWh used, subsidized^[a] 2.5 @ 0-500 kWh/M 4.17 @ 501-1000 kWh/M 7.5 @ 1001-1500 kWh/M 11.67 @ 1501-2000 kWh/M 14.17 @ 2001-3000 kWh/M 16.67 @ 3001-4000 kWh/M 18.75 @ > 4001 kWh/M		Apr 8, 2015	[45]
Electricity sector in Ireland	28.36		Nov 1, 2011	[12][13]
Electricity sector in Israel	16^[a]		Jun 1, 2013	[46]
Electricity sector in Italy	28.39		Nov 1, 2011	[12][13]
Electricity sector in Jamaica	44.7		Dec 4, 2013	[47][48]
Electricity sector in Japan	20 to 24		Dec 31, 2009	[49][50]
Electricity sector in Jordan	5^[a] to 33		Jan 30, 2012	[51]
Electricity sector in Kiribati	32.7			[52]
Electricity sector in South Korea	Priced into a sliding scale at a kWh/Month, residential service (low-voltage)^[a] 5.1 @ 0-100 kWh/M 10.5 @ 101-200 kWh/M 15.7 @ 201-300 kWh/M 23.5 @ 301-400 kWh/M 34.9 @ 401-500 kWh/M 59.3 @ 501- kWh/M		Jan 14, 2013	[53]
Electricity sector in Kuwait	0.3 to 3		Jan 1, 2016	[54]
Electricity sector in Laos	11.95 for >150kWh, 4.86 for 26-150 kWh, 4.08 for 0-25 kWh		Feb 28, 2014	[55][56]
Electricity sector in Latvia	18.25		Jun 1, 2012	[57][58]
Electricity sector in Lithuania	14		Jan 1, 2015	[59][60]
Macedonia	7 to 10 industrial-14		Aug 1, 2013	[61]
Electricity sector in Malaysia	7.09 to 14.76		Apr 1, 2013	[62]
Electricity sector in Marshall Islands	32.6 to 41.6			[63]
Electricity sector in Mexico	19.28^[b]		Aug 22, 2012	[64][65]
Electricity sector in Moldova	11.11		Apr 1, 2011	[66]
Myanmar	3.6		Feb 28, 2014
Electricity sector in Nepal	7.2 to 11.2		Jul 16, 2012	[67]
Electricity sector in Netherlands	28.89		Nov 1, 2011	[12][13]
Electricity sector in New Caledonia	26.2 to 62.7			[6]
Electricity sector in New Zealand	19.15		Apr 19, 2012
Electricity sector in Nicaragua	Priced into a sliding scale at a kWh/Month,^[a] Residential T-0 10 @ 0-25 kWh/M 21 @ 26-50 kWh/M 22 @ 51-100 kWh/M 29 @ 101-150 kWh/M 27 @ 151-500 kWh/M 43 @ 501-1000 kWh/M 48 @ 1000+ kWh/M		Sep 1, 2014	[68]
Electricity sector in Niue	44.3			[52]
Electricity sector in Nigeria	2.58 to 16.55		Jul 2, 2013	[69]
Electricity sector in Norway	15.9		Jul 25, 2013
Electricity sector in Pakistan	2.00 to 15.070		May 16, 2012	[70]
Electricity sector in Palau	22.83			[52]
Electricity sector in Papua New Guinea	19.6 to 38.8			[6]
Electricity sector in Paraguay	8		2011	[71]
Electricity sector in Perú	10.44		2007	[72][73]
Electricity sector in Philippines	18.22		October 7, 2015	[74]
Electricity sector in Portugal	25.25		Nov 1, 2011	[12][13]
Electricity sector in Russia	2.4 to 14		Oct 2, 2013	[75]
Electricity sector in Saudi Arabia	1 to 7 (from the first 2,000 kWh/month to more than 10,000 kWh/month)		Sep 9, 2015	[76]
Electricity sector in Serbia	3.93 to 13.48^[d]		Feb 28, 2013	[77]
Electricity sector in Singapore	25.28		Sep 30, 2014	[78]
Electricity sector in Spain	15		May 1, 2015	[79]
Electricity sector in Sri Lanka	Priced into sections at a kWh/Month, subsidized^[a] 1.91 @ 0-30 kWh/M 3.71 @ 31-60 kWh/M 6.01 @ 0-60 kWh/M 7.66 @ 61-90 kWh/M 21.25 @ 91-120 kWh/M 24.51 @ 121-181 kWh/M 34.47 @ 180+ kWh/M		Sep 16, 2014	[80]
Electricity sector in Solomon Islands	88 to 99			[81]
Electricity sector in South Africa	13		Sep 29, 2015	[82][83]
Electricity sector in Surinam	3.90 to 4.84		Nov 20, 2013	[84]
Electricity sector in Sweden	8.33		Feb 3, 2015	[12]
Electricity sector in Tahiti	25 to 33.1			[6]
Electricity sector in Taiwan	7 to 17		Jun 1, 2012	[85]
Electricity sector in Thailand	6 to 13		July 1, 2013	[86]
Electricity sector in Tonga	47		Jun 1, 2011	[6]
Electricity sector in Trinidad and Tobago	4		July 8, 2015	[87]
Electricity sector in Turkey	13		Jul 1, 2015	[88]
Electricity sector in Turks and Caicos Islands	35.39		March 16, 2016	[89]
Electricity sector in Tuvalu	36.55			[52]
Electricity sector in Ukraine	2.6 to 10.8		2014	[90][91]
Electricity sector in United Kingdom	22		May 1, 2015	[12][92]
Electricity sector in United States	8 to 17 ; 37^[c] 43^[c]		Sep 1, 2012	[93][94]
Electricity sector in United States Virgin Islands	48.9 to 51.9		Oct 1, 2014	[95]
Electricity sector in Uruguay	17.07 to 26.48		Feb 11, 2014	[96]
Electricity sector in Uzbekistan	4.95		2011	[97]
Electricity sector in Vanuatu	60			[6]
Electricity sector in Venezuela	3.1 at Official exchange rate ( 6.3 Bs/US$) or 0.48 cents at unofficial exchange rate (40 Bs/US$)			[98]
Electricity sector in Vietnam	6.20 to 10.01		2011	[99]
Electricity sector in Western Samoa	30.5 to 34.7			[6]

^a Denotes countries with government subsidized electricity tariffs.^{[100][101][102]}

^b Mexico has subsidized electricity tariffs according consumption limits, more than 500kWh consumed bimonthly meet no subsidies. This tariff correspond to the most expensive. Only 1% of Mexico's population pays this tariff. ^[103]

^c Hawaii.

^d Prices don't include VAT (20%)

^e San Diego, California high-tier

The U.S. Energy Information Administration (EIA) also publishes an incomplete list of international energy prices, while the International Energy Agency (IEA) provides a thorough, quarterly review for purchase.

Forecasting

Electricity price forecasting is simply the process of using mathematical models to predict what electricity prices will be in the future.

Forecasting methodology

The simplest model for day ahead forecasting is to ask each generation source to bid on blocks of generation and choose the cheapest bids. If not enough bids are submitted, the price is increased. If too many bids are submitted the price can reach zero or become negative. The offer price includes the generation cost as well as the transmission cost along with any profit. Power can also be sold or purchased from adjoining power pools.^{[104][105][106]}

Wind power and solar power, being non-dispatchable, is normally taken before any other bids, and at a pre-determined rate for each supplier. Any excess is sold to another grid operator, or stored, using pumped-storage hydroelectricity, or in the worst case, curtailed.^[107] The HVDC Cross-Channel line between England and France is bidirectional, but is normally used to capacity to purchase power from France. Allocation is done by bidding.^[108]

Driving factors

In addition to the basic production cost of electricity, electricity prices are set by supply and demand.^[109] Everything from salmon migration to forest fires can affect current and future power prices. However, when forecasting those prices there are some fundamental drivers that are the most likely to be considered.

Power quality

In the modern world, transmission, production and consuming electrical power associated with excessive Total Harmonic Distortions (THD) and not unity Power Factor (PF) would be costly for owners. Cost of PF and THD impact is difficult to estimate, but it causes heat and vibration, malfunctioning, and even meltdowns. Usually the electric company monitors the situation at the transmission level, and it is difficult to predict or model at the consuming level. A spectrum of Compensation devices ^[110] mitigate at some level any bad outcomes, but true improvements would be achieved only with real-time Correction devices (old style switching type ^[111] modern low-speed DSP driven ^[112] and near real-time ^[113]). Most modern devices reduce a wide range of problems, while maintaining short ROI and significant reduction of ground currents. Another reason to mitigate the problems is to reduce cost for the operation and generation of the electrical energy, which is commonly done by Electric Power Distribution companies in conjunction with generation companies. Power Quality out of unity would cause serious erroneous responses from many kinds of analog and digital equipment, where the response could be unpredictable.

Phase balancing

Currently most common distribution network and generation of electrical power is done with 3 phase structures, with special attention paid to the phase balancing and resulting reduction of ground current. It is true for industrial or commercial networks where most power is used in 3 phase machines, but light commercial and residential users would not have real-time capabilities to do phase balancing. Often this issue leads to unexpected equipment behavior or malfunctions and in extreme cases fires. For example, sensitive professional analogue or digital recording equipment always needs to be connected to well balanced and grounded power networks. To determine and mitigate the cost of the unbalanced electricity network, electric companies in most cases charge by demand or as separate category for heavy unbalanced loads. There are a few simple techniques available for balancing,^[114] but in the dynamic world of demanding loads, it would be difficult to do it without fast computing and real-time modeling.

Weather driven demand

Studies show that generally demand for electricity is driven largely by temperature. Heating demand in the winter and cooling demand (air conditioners) in the summer are what primarily drive the seasonal peaks in most regions. Heating degree days and cooling degree days help measure energy consumption by referencing the outdoor temperature above and below 65 degrees Fahrenheit, a commonly accepted baseline.^[115]

Hydropower availability

Snowpack, streamflows, seasonality, salmon, etc. all affect the amount of water that can flow through a dam at any given time. Forecasting these variables allows one to predict the available potential energy for a dam for a given period.^[116] Some regions such as the Pacific Northwest get a large percentage of their generation from hydro-electric dams.

Power plant and transmission outages

Whether planned or unplanned, outages affect the total amount of power that is available to the grid.

Fuel prices

The fuel used to generate electricity at a power plant is the primary cost incurred by electrical generation companies. Particularly, coal, as a fuel for baseload plants and more important, to a degree, natural gas for peaking plants affect power prices.^[117] This will change as more renewable energy is used, when the capital cost will be the primary cost, as renewable energy (other than biomass and biofuel) has no fuel cost.

Economic health

During times of economic hardship, many factories will cut back their production due to a reduction of consumer demand and therefore reduce production-related electrical demand.^[118]

See also

• Cost of electricity by source
• Energy price
• Feed-in tariff
• Stranded costs
• Levelised energy cost
• Electricity market
• Electricity liberalization
• Demand response
• Spark spread

References

1. J. M. Pearce and Paul J. Harris, "Reducing greenhouse gas emissions by inducing energy conservation and distributed generation from elimination of electric utility customer charges", Energy Policy, 35, pp. 6514-6525, 2007. Open access available
2. Strom-Report: Electricity prices in Europe
3. "Los precios de la energía, desiguales en el país y lejos de los valores regionales" [Energy prices unequal in the country and much lower in the capital] (in Spanish). LA NACION. November 20, 2006. Retrieved March 30, 2012.
4. "Electricity Rates and Usage in the United States". Electricity Local. Retrieved 2014-03-25.
5. European Household Electricity Price Index for Europe (HEPI), Who is paying the most, who is paying the least and where are prices heading in Europe?, June 2009
6. [Pacific power association]
8. ,,Lumo Energy
9. http://www.lumoenergy.com.au/cms/images/pdf/20130701_PFS_SA_Elec_BusinessOptions.pdf
10. "Ministry of Water and electricity". BERC, MoW&E. 2015. Retrieved Aug 19, 2015.
11. "The Bangladesh Energy Regulatory Commission" (PDF). BERC, Govt. of Bangladesh. March 2014. Retrieved Aug 12, 2014.
12. EEP
13. Domestic EU Electricity Prices
14. BPC
15. BPC Electricity Tariffs
16. DKER
17. EVN
18. Invest Bulgaria
19. ANEEL
20. Electricity Authority of Cambodia
21. "Report on Power Sector of the Kingdom of Cambodia 2013 Edition" (PDF). Electricity Authority of Cambodia. 2013. Retrieved February 28, 2013.
22. p.93
23. THES
25. http://english.sz.gov.cn/ln/201205/t20120517_1914423.htm
26. Chilectra
27. "Energy Supply Pricing for Clients Subject to Price Regulation" (PDF). Chilectra. Jan 1, 2011. Retrieved Feb 10, 2011.
28. CODENSA
29. "TARIFAS DE ENERGÍA ELÉCTRICA ($/kWh) REGULADAS POR LA COMISIÓN DE REGULACIÓN DE ENERGÍAY GAS (CREG) JULIO DE 2013" (PDF). Codensa. Jun 1, 2013. Retrieved Jun 30, 2013.
30. HEP
31. DEWA
33. EgyptERA
35. http://www.sudantribune.com/spip.php?article45028
38. GPL
40. HEC
41. CLP Power
42. "Tariff & duty of electricity supply in India" (PDF). CEA, Govt. of India. March 2014. Retrieved Aug 12, 2014.
43. Tariff-Adjusment-Juni-2015.pdf
44. "Verðskrár". www.or.is. Retrieved 2015-11-08.
46. http://www.iec.co.il/HomeClients/Pages/TariffsAndAccounts.aspx
51. ERC
53. KEPCO
54. Kuwait Ministry of Electricity & Water
55. Electricite Du Laos
56. "Electricity Tariff As Updated 3/2012 TO 12/2017". Electricite Du Laos. March 2012. Retrieved Feb 28, 2014.
57. Latvenergo
58. Latvenergo
59. Lesto
60. Lesto
61. ERC
62. TNB
63. http://mecrmi.net/tariffs.htm
64. CFE
65. "CFE 2012".
66. RUF
67. NEA
68. INE
69. NaijaTechGuide
70. LESCOFESCO
71. ANDE
72. PTL
73. Pliegos tarifarios de Lima-OSINERGMIN/GART
75. Irkutskenergo,Mosenergosbyt
76. Saudi Electricity Company
79. Iberdrola,energy.eu
81. [SIEA new tariffs residential/business fuel price adjusted]
82. Eskom
83. "Electricity prices: South Africa vs the world". Retrieved 2015-09-29.
84. NEVBS N.V. EnergieBedrijven Suriname
86. BOI
88. TEDAS
90. Electricity prices for individuals - Kyivenergo
91. Electricity prices for corporate consumers - Kyivenergo
92. EP
93. EIA
94. Electric Power Monthly Average Retail Price of Electricity pg. 106
95. WAPA
96. UTE
97. Stroyka.uz
98. [CORPOELECT]
99. Reuters
100. http://www.bloomberg.com/news/2011-11-10/argentina-doubles-power-prices-for-companies-to-stem-widening-budget-gap.html
101. http://online.wsj.com/article/BT-CO-20120725-721044.html
102. http://uk.reuters.com/article/2012/07/18/uk-israel-electric-idUKBRE86H0IT20120718?feedType=RSS&feedName=GCA-GoogleNewsUK
103. http://app.cfe.gob.mx/Aplicaciones/CCFE/Tarifas/Tarifas/Tarifas_casa.asp?Tarifa=domesticas2003&anio=2012
104. ISO NE
105. NY ISO
106. ERCOT
107. Wind Power and Electricity Markets
108. IFA Overview
109. The power market - how does it work
115. Robert Carver. "What Does It Take to Heat a New Room?". American Statistical Association. Retrieved 2010-02-14.
116. "More Reliable Forecasts for Water Flows Can Reduce Price of Electricity". Body of Knowledge on Infrastructure Regulation. January 19, 2010. Retrieved 2010-01-24.
117. "Annual Energy Outlook Early Release Overview". U.S. Energy Information Administration. Retrieved 2010-01-24.
118. "Demand Forecasting for Electricity" (PDF). Body of Knowledge on Infrastructure Regulation. Retrieved 2010-01-24.

External links

• JCM Contour Map
• Electricity Price Forecasting
• Electricity Price Comparison Service UK