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Average Electricity Pricing

Average Electricity Pricing

Over the years, world has adopted different patterns of producing and consuming energy. Producing electrical energy is accompanied by many different sources of energy. Examining the data country wise and fuel wise will create a better understanding of electricity pricing.

Due to the economic crunch, the year 2012 experienced decrease in the growth of energy consumption worldwide. Increasing prices and efficient use of energy by the users was the foremost reason for this decline. The same way, it should also be noted that world energy market has adopted various diverse sources of supplying energy from time to time.

Countries like Brazil, Russia, China, US, the EU, Japan and India had below average growth in consumption of all forms of fossil energy. Whereas, on the supply side, US had recorded largest production of oil and natural gas in the world because of its shale revolution. UAE, Qatar and Saudi Arabia were also prominent in oil production and Libya also recovered its production extensively from previous year. Despite all these facts, oil prices rose sharply.

China, being the biggest consumer of coal, consuming half of the world’s coal, could not help in increasing the growth rate of fossil fuel. The only fossil fuel which accelerated in 2012 was Natural Gas. It turned out to be the cheapest raw material for power production in North America replacing coal. Hydroelectric and renewable energy were also relatively low priced globally in comparison to coal. Coal was more frequently used for power generation in Europe than gas as it was expensive there. On the other hand, Asia adopted use of LNG tankers.

In Japan fossil fuel imports rose as the nuclear power output fell by almost 90% because of the incident of Fukushima. In response to this, global nuclear power output declined enormously.

WORLD CONSUMPTION (IN MILLION TONNES OIL EQUIVALENT)

World’s 10 year average of energy consumption is 2.6% but in 2012 it was only 1.8% well below the average. In US, the decline is 2.8% which led to the overall decline in OECD countries by 1.2%. In non OECD countries energy consumption grew by 4.2% which is also below the 10 year average of 5.3%. Generally consumption growth reduced especially in case of fossil fuel and nuclear power except in Africa. Although the consumption of oil increased which is 33.1% of global energy consumption but consecutively for the 13th year, its market share had reduced.

This year interesting developments have been revealed in the world of electricity. Changes in prices can be associated with several factors like geopolitics, fluctuating oil rates and fragile economy.

In Europe, Italy and Portugal, there was an increase in electricity rates by 18% and 12.1% respectively. Whereas, rest of the countries reported slashed prices for electricity.

In South Africa, rising trend has been observed in electricity prices. In 2012, 23.1% rise has been reported and according to analysts, this increasing trend will continue for a number of years to come.

US and Canada reported decline in electricity rates, of which Canada, though registered a little increase by 1.4%. was still on the lowest side. Whereas in US, prices declined consecutively the third time.

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