What heavy industry pays for electricity

Why industry pays a different price

A factory buys electricity on different terms from a household. It uses far more, often around the clock, and connects to the grid at a higher voltage, so it pays less per kilowatt-hour for the network. Many countries also exempt energy-intensive industry from some levies and taxes to keep it competitive with producers abroad. The price is built from the same three parts as a household bill, in different proportions.

The three parts are the energy itself with the supplier's margin, the network charges that pay for the grid, and the taxes and levies the state sets. The chart splits each country's price into those parts, so a gap between two countries can be traced to the wholesale market, to the grid or to policy. In the latest year in the data Germany's industrial price sits above those of France, Spain and Norway, and most of the gap is in network charges and in taxes and levies.

The figures come from Eurostat, which sorts industrial consumers into bands by how much electricity they use in a year and reports an average price for each band in each country. A large chemical plant with its own supply contract may pay well below its band's average, and a small workshop may pay more. The band lets countries be compared on equal terms, and a single company's bill depends on its own contract.

Norway sits at the low end. Around nine-tenths of its electricity comes from hydropower, which costs little to run because the water is free. For the household side of the same question, see Electricity Bill Breakdown; for the price that wind and solar earn when they sell, see Capture Price.