What is the cheapest electricity in the world? Electricity prices by country
By Celia Topping Tuesday 16 February 2021
The price of a pint, and the cost of our electricity. Probably the 2 most complained about commodities in the United Kingdom! It’s true, these two essentials never seem to go down in price. But although we like to complain, we are far from being the worst-off in the world – or even in Europe. Beer may well be cheaper in Germany – but it might give you a little schadenfreude1 to know that the Germans pay a lot more than us for their power!
Read on, to find out how the UK compares with Europe – and also globally – for electricity prices. Plus learn a few other interesting bits ‘n bobs about the world’s electricity use.
Electricity prices around the world in $/kWh
UK electricity prices fluctuate throughout the year, and even between regions. But it might surprise you to see how wildly different electricity costs are on a global scale – as shown by the graph below, which outlines the average domestic electricity prices in 16 countries.
This graph was created with data from www.globalpetrolprices.com
Who has the most expensive electricity in the world?
Until fairly recently, Denmark held the top spot as the country with the most expensive electricity in the world. But in 2012, German electricity prices rose sharply following the Fukushima nuclear disaster – which the German government reacted to by swiftly closing down many of its nuclear power stations. Prices have continued to rise as the country moves away from fossil fuels and atomic energy, to greener, more sustainable renewables.
In fact, grid fees and the renewable surcharge make up nearly half of Germany’s total electricity prices3. This tax is to pay for the country’s expansion into renewable energies like wind, solar, hydro and biomass. It may be costly on the taxpayer, but since 2017, over a third of the electricity produced in Germany has come from renewable sources. Pretty impressive.
Taxation is also the reason costs are so high for Denmark, with the second most expensive electricity. Their taxes are actually a whopping 56%4. Prices may be high – but the Danish supply is also ranked as one of the best in the world. And their green energy plan is ambitious and far-reaching. At the moment, 50% of Danish electricity is powered by wind – and by 2050, they aim to have their entire energy system powered by renewables.
Who has the cheapest electricity in the world?
It’s not surprising that Qatar, the richest country in the world, has some of the cheapest electricity. This Middle Eastern country has vast amounts of crude oil and natural gas. It currently delivers about 13% of the global supply! Plus, Qatar is a net exporter of energy5, meaning it exports more energy than it imports.
India also has inexpensive electricity, at 0.08 dollars per kWh. That’s chiefly because since the industrial revolution, energy has formed the backbone of India’s economy. And according to Indian billionaire businessman Gautam Shantilal Adani, with renewable energy booming and costs falling sharply, “India will be the least expensive producer of renewable energy,” in the world. So watch out Qatar!
What factors affect electricity prices around the world?
Global electricity prices are affected by a number of different factors. We’ve seen why prices are high in Germany and low in Qatar, but generally, things that affect prices include:
Availability of natural resources
Government policies and taxes
Networking and supplier operating costs
The national energy mix
Supply and demand
Which countries have free electricity?
Now wouldn’t that be nice?! Although free nationwide electricity isn’t currently a thing, one country had it until quite recently! It may be hard to believe, but from 1993 to 2019, Turkmenistan – a gas-rich, ex-Soviet, Central Asian nation – enjoyed free gas, electricity and water. That was until President Gurbanguly Berdymukhamedov put an end to the free-for-all6.
Which countries don’t have electricity?
While much of the world is struggling to keep their energy use within international targets, some countries have the opposite problem. Africa is home to almost a fifth of the global population, living in 54 countries, but uses less than 4% of the world’s electricity. Although the north of the continent enjoys near-100% access, more than half of the sub-Saharan population have none. That’s 600 million people living without electricity7. It’s a shocking statistic for the 21st century.
To find out more about what OVO’s charity arm, the OVO Foundation, is doing to create green, clean solar power to rural communities in Kenya, take a look at our website.
European electricity prices
On a global scale, Europeans pay a premium for their electricity. This is because power is taxed heavily across the continent. Take a look at the graph below – you’ll see the UK sits somewhere in the middle for electricity costs, at 26 cents per kWh. We may complain – but it could be a lot worse!
This graph was created with data from www.globalpetrolprices.com
UK electricity prices
With the April 2021 price cap, the average electricity bill will soon become £640. That’s an increase of 5% compared to the April 2020 cap, and it’s been driven by retail price increases over last year, as well as the impact of Covid.
What is the cheapest source of electricity?
According to the International Energy Agency’s World Energy Outlook 2020, solar power is the cheapest source of electricity in history. Discover the advantages and disadvantages of solar power, and find out if you could install panels at home, in our comprehensive guide.
How can I reduce my electricity bill?
Here at OVO, we’re all about trying to reduce your bills and cut your carbon footprint, for a healthier environment. Here are some handy articles that might help you:
To find out if you could be paying less for your electricity, while reducing your carbon footprint, check out what we offer at OVO:
100% renewable electricity as standard8
A tree planted9 in your name every single year you are with us
3-5% Interest Rewards10 when your account is in credit
An award-winning smart meter experience (Uswitch 2020)
A £50 gift card every time an OVO member introduces a friend to us
A 5-star rating by over 25,000 of our members
Sources and references:
8 The renewable electricity we sell is backed by renewable certificates (Renewable Energy Guarantee of Origin certificates (REGOs)). See here for details on REGO certificates and how these work.
9 Each year, OVO plants 1 tree for every member in partnership with the Woodland Trust. Trees absorb carbon dioxide from the atmosphere, so tree-planting helps to slow down climate change.
10 Interest Rewards are paid on credit balances of customers paying by monthly Direct Debit. It is calculated at 3% in your first year, 4% in your second year and 5% in your third year (and every year thereafter) if you pay by Direct Debit. Interest Rewards are paid monthly based on the number of days you’re in credit and the amount left in your account after you’ve paid your bill. Full terms apply