Key Factors Driving European Retail Energy Prices 2009 to 2013

Introduction

In recent years, wholesale energy prices have shown unprecedented volatility across all commodities and markets. Inevitably these factors have exerted a considerable impact on retail prices in both the B2B and B2C sectors. Going forward, utilities will need to contend with the impact of rising prices, as well as the transition away from regulated prices in many markets.

Scope

• Understanding of the key factors driving retail prices in European gas and electricity markets over the coming five years.
• Insight into the relative importance and magnitude of individual factors and their impact on retail price dynamics.
• Analysis of the pass-through between wholesale and retail mechanisms.
• An assessment of the impact of price-controls and related regulatory risk on Utilities' operations.

Highlights

The extent of price-liberalisation in gas and electricity retail markets is essentially a function of the government's political disposition. Current and future levels of European retail market liberalisation vary widely between states, creating different potentials for net margin.

The relationship between wholesale and retail prices is determined by an array of factors whose influence varies between markets. Whilst the precise relative importance of each factor changes between markets, end-user price regulation exerts particular pressure. This distorts the pass-through mechanisms between wholesale and retail markets.

Price regulations produces bottle necks, in which the utility runs at a reduced margin, or is subsidised. The pressing need for investment in Europe's energy infrastructure means that in time, utilities will have to be run profitably. the EU knows this and is exerting increasing pressure on certain states to desist from favouring incumbents.

Reasons to Purchase

• Understand wholesale-retail price dynamics and movements.
• Gain insight into the possible impact of individual price factors on the retail markets in Europe.
• Compare the relative importance of price-regulation in the coming years.

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