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]

Price comparison

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]

A comparative list of June 2009 prices for Europe may be found in the European Household Electricity Price Index.^[4]

The price also differs from the source of the electricity. In the U.S. in 2002, the cost of electricity by different sources is listed below: 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 from renewable sources depend highly on the source availability, reaching the so-called grid parity in parts of the world where even conventional power plants based on fossil fuel are costly enough (i.e. transportation costs of diesel to isolated communities). The varying costs involved in producing electricity leads to great variance in average electricity rates for residents of different states in the U.S. 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).^[5]

It is worth noting that the high cost of electricity in the Solomon Islands, as shown in the table below, is primarily a result of the use of imported diesel fuel as the main source of fuel for electricity generators.^[6]

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.

Global electricity price comparison

For comparison:

• 1 litre of gasoline/petrol contains 33 megajoules
• 1 US gallon of gasoline contains 120 megajoules
• 65 standard alkaline AA batteries contain 1 megajoule

Country/Territory	US cents/kWh	US cents/megajoule	Date	Source
American Samoa	7001383009999900000♠38.3 to 40.4	10.64 to 11.22		[7]
Argentina (Buenos Aires)	7000310000000000000♠3.1*	0.86	02006-01-01-00002006	[3][8]
Argentina (Concordia)	7001191300000000000♠19.13*	5.31	02013-06-14-0000Jun 14, 2013
Australia	7001308170000000000♠30.817 kW/h plus 91.755 cents per day service fee	6.11 to 11.06	02012-08-23-0000Aug 23, 2012	[9][10]
Bangladesh	7000295000000000000♠2.95 to 9.24		02014-03-13-0000Mar 13, 2014	[11]
Belgium	7001290800000000000♠29.08	8.08	02011-11-01-0000Nov 1, 2011	[12][13]
Bhutan	7000188000000000000♠1.88 to 4.40	0.52 to 1.22	02012-03-23-0000Mar 23, 2012	[14][15]
Bulgaria	7001133800000000000♠13.38 day (between 7:00-23:00 DST); 9.13 night	2.54 to 3.72	02014-10-29-0000Oct 29, 2014	[16][17][18]
Brazil	7001162000000000000♠16.20	4.5	02011-01-01-0000Jan 1, 2011	[19]
Cambodia	7001156300000000000♠15.63 to 21.00 in Phnom Penh	4.34 to 5.83	02014-02-28-0000Feb 28, 2014	[20][21]
Canada, Ontario	7001111700000000000♠11.17		02010-01-01-00002010	[22]
Canada, Ontario, Toronto	7000651990000000000♠6.52 to 11.69 depending on time of day plus transmission, delivery, and other charges of about 3.75/kWh	1.81 to 3.25	02014-02-09-0000Feb 9, 2014	[23]
Canada, Quebec	7000541000000000000♠5.41 for the first 30 kWh/day then 7.78 + 40.64/day for subscription fee		02012-01-01-00002012	[24]
China	7000750000000000000♠7.5 to 10.7		02012-05-17-0000May 17, 2012	[25]
Chile	7001231100000000000♠23.11		02011-01-01-0000Jan 1, 2011	[26][27]
Colombia (Bogota)	7001180500000000000♠18.05		02013-06-01-0000Jun 1, 2013	[28][29]
Cook Islands	7001346000000000000♠34.6 to 50.2			[7]
Croatia	7001175500000000000♠17.55		02008-07-01-0000Jul 1, 2008	[30]
Denmark	7001403800000000000♠40.38		02011-11-01-0000Nov 1, 2011	[12][13]
Dubai	7000626000000000000♠6.26 to 10.35 (plus 1.63 fuel surcharge)			[31][32]
Egypt	Priced into sections at a kWh/Month, subsidized * 7000109000000000000♠1.09 @ 0-50 kWh/M 7000211009999900000♠2.11 @ 51-100 kWh/M 7000233000000000000♠2.33 @ 0-200 kWh/M 7000349000000000000♠3.49 @ 201-350 kWh/M 7000495000000000000♠4.95 @ 351-650 kWh/M 7000873000000000000♠8.73 @ 651-1000 kWh/M 7001107700000000000♠10.77 @ 1000+ kWh/M		02014-07-17-0000Jul 17, 2014	[33] [34]
Ethiopia	7000670000000000000♠6.7 to 7.7*		02012-12-31-0000Dec 31, 2012	[35]
Fiji	7001120000000000000♠12 to 14.2			[7]
Finland	7001206509999900000♠20.65		02011-11-01-0000Nov 1, 2011	[12][13]
France	7001193900000000000♠19.39		02011-11-01-0000Nov 1, 2011	[12][13]
Germany	7001362500000000000♠36.25		02013-05-01-0000May 1, 2013	[12]
Romania	7001184009999900000♠18.40		02013-06-26-0000Jun 26, 2013	[36]
Guyana	7001268000000000000♠26.80		02012-04-01-0000Apr 1, 2012	[37]
Switzerland	7001250000000000000♠25.00		02014-01-06-0000Jan 6, 2014	[38]
Hungary	7001234400000000000♠23.44		02011-11-01-0000Nov 1, 2011	[12][13]
Hong Kong	7001120400000099999♠12.04 to 24.05		02013-01-01-0000Jan 1, 2013	[39][40]
India	6999100000000000000♠0.1 to 18 (Average 7)		02013-02-01-0000Feb 1, 2013	[41]
Indonesia	7000875000000000000♠8.75		02013-02-01-0000Feb 1, 2013	[42][43]
Iceland	7000900000000000000♠9 to 10		02012-06-01-0000Jun 1, 2012	[44][45]
Iran	7000200000000000000♠2 to 19		02011-07-01-0000Jul 1, 2011
Ireland	7001283600000000000♠28.36		02011-11-01-0000Nov 1, 2011	[12][13]
Israel	7001160000000000000♠16*		02013-06-01-0000Jun 1, 2013	[46]
Italy	7001283900000000000♠28.39		02011-11-01-0000Nov 1, 2011	[12][13]
Jamaica	7001447000000000000♠44.7		02013-12-04-0000Dec 4, 2013	[47][48]
Japan	7001200000000000000♠20 to 24		02009-12-31-0000Dec 31, 2009	[49][50]
Jordan	7000500000000000000♠5* to 33		02012-01-30-0000Jan 30, 2012	[51]
Kiribati	7001327000000000000♠32.7			[52]
Korea (South)	7000550000000000000♠5.50 to 52.2		02013-01-14-0000Jan 14, 2013	[53]
Kuwait	7000100000000000000♠1		01966-06-01-0000Jun 1, 1966	[54][55]
Laos	7001119500000000000♠11.95 for >150kWh, 4.86 for 26-150 kWh, 4.08 for 0-25 kWh		02014-02-28-0000Feb 28, 2014	[56][57]
Latvia	7001182500000000000♠18.25		02012-06-01-0000Jun 1, 2012	[58][59]
Lithuania	7001192700000000000♠19.27		02013-01-01-0000Jan 1, 2013	[60][61]
Macedonia	7000700000000000000♠7 to 10 industrial-14		02013-08-01-0000Aug 1, 2013	[62]
Malaysia	7000709000000000000♠7.09 to 14.76		02013-04-01-0000Apr 1, 2013	[63]
Marshall Islands	7001292000000000000♠29.2 to 36.5			[7]
Mexico	7001192800000000000♠19.28**		02012-08-22-0000Aug 22, 2012	[64][65]
Moldova	7001111100000000000♠11.11		02011-04-01-0000Apr 1, 2011	[66]
Myanmar	7000360000000000000♠3.6		02014-02-28-0000Feb 28, 2014
Nepal	7000720000000000000♠7.2 to 11.2		02012-07-16-0000Jul 16, 2012	[67]
Netherlands	7001288900000000000♠28.89		02011-11-01-0000Nov 1, 2011	[12][13]
New Caledonia	7001262000000000000♠26.2 to 62.7			[7]
New Zealand	7001191509999900000♠19.15		02012-04-19-0000Apr 19, 2012
Nicaragua	Priced into a sliding scale at a kWh/Month, * Residential T-0 7001100000000000000♠10 @ 0-25 kWh/M 7001210000000000000♠21 @ 26-50 kWh/M 7001220000000000000♠22 @ 51-100 kWh/M 7001290000000000000♠29 @ 101-150 kWh/M 7001270000000000000♠27 @ 151-500 kWh/M 7001430000000000000♠43 @ 501-1000 kWh/M 7001480000000000000♠48 @ 1000+ kWh/M		02014-09-01-0000Sep 1, 2014	[68]
Niue	7001443000000000000♠44.3			[52]
Nigeria	7000258000000000000♠2.58 to 16.55		02013-07-02-0000Jul 2, 2013	[69]
Norway	7001159000000000000♠15.9		02013-07-25-0000Jul 25, 2013
Pakistan	7000200000000000000♠2.00 to 15.070		02012-05-16-0000May 16, 2012	[70]
Palau	7001228300000099999♠22.83			[52]
Papua New Guinea	7001196000000000000♠19.6 to 38.8			[7]
Paraguay	7000800000000000000♠8		02011-01-01-00002011	[71]
Perú	7001104400000000000♠10.44		02007-01-01-00002007	[72][73]
Philippines	7001361300000000000♠36.13		02013-12-06-0000Dec 6, 2013	[74]
Portugal	7001252500000000000♠25.25		02011-11-01-0000Nov 1, 2011	[12][13]
Russia	7000240000000000000♠2.4 to 14		02013-10-02-0000Oct 2, 2013	[75]
Saudi Arabia	7000130000000000000♠1.3 for the first 2,000 kWh/month then to 6.9		02000-10-28-0000Oct 28, 2000	[76]
Serbia	7000393000000000000♠3.93 to 13.48****		02013-02-28-0000Feb 28, 2013	[77]
Singapore	7001252800000000000♠25.28		02014-09-30-0000Sep 30, 2014	[78]
Spain	7001227300000000000♠22.73		02012-07-01-0000Jul 1, 2012	[79]
Solomon Islands	7001880000000000000♠88 to 99			[80]
South Africa	7000800000000000000♠8 to 16		02015-01-01-0000Jan 1, 2015	[81]
Surinam	7000390000000000000♠3.90 to 4.84		02013-11-20-0000Nov 20, 2013	[82]
Sweden	7000833000000000000♠8.33		02015-02-03-0000Feb 3, 2015	[12]
Tahiti	7001250000000000000♠25 to 33.1			[7]
Taiwan	7000700000000000000♠7 to 17		02012-06-01-0000Jun 1, 2012	[83]
Thailand	7000600000000000000♠6 to 13		02013-07-01-0000July 1, 2013	[84]
Tonga	7001470000000000000♠47		02011-06-01-0000Jun 1, 2011	[7]
Turkey	7001125700000000000♠12.57 to 18.63		02014-02-04-0000Feb 4, 2014	[85]
Turks and Caicos Islands	7001489900000000000♠48.99		02013-10-24-0000Oct 24, 2013
Tuvalu	7001365509999900000♠36.55			[52]
Ukraine	7000260000000000000♠2.6 to 10.8		02014-01-01-00002014	[86][87]
United Kingdom	7001200000000000000♠20.0		02012-11-30-0000Nov 30, 2012	[12][13]
United States	7000800000000000000♠8 to 17 ; 37***		02012-09-01-0000Sep 1, 2012	[88][89]
United States Virgin Islands	7001489000000000000♠48.9 to 51.9		02014-10-01-0000Oct 1, 2014	[90]
Uruguay	7001170700000000000♠17.07 to 26.48		02014-02-11-0000Feb 11, 2014	[91]
Uzbekistan	7000495000000000000♠4.95		02011-01-01-00002011	[92]
Vanuatu	60 Cents per Kilowatt			[7]
Venezuela	7000310000000000000♠3.1 at Official exchange rate ( 6.3 Bs/US$) or 0.48 cents at unofficial exchange rate (40 Bs/US$)			[93]
Vietnam	7000620000000000000♠6.20 to 10.01		02011-01-01-00002011	[94]
Western Samoa	7001305000000000000♠30.5 to 34.7			[7]

* Denotes countries with government subsidized electricity tariffs.^[95][96][97]

** Mexico has subsidized electricity tariffs according consumption limits, more than 500kWh consumed bimonthly meet no subsidies. This tariff correspond to the most expensive.^[98]

*** Hawaii.

**** Prices don't include VAT (20%)

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.^{[99][100][101]}

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.^[102] 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.^[103]

Driving factors

In addition to the basic production cost of electricity, electricity prices are set by supply and demand.^[104] 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 modern world, transmission, production and consuming Electric 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 difficult to estimate, but it cause heat and vibration, malfunctioning and even meltdowns. Usually electric company monitors the situation at transmission level, and it is difficult to predict or model at consuming level. A spectrum of Compensation devices ^[105] mitigate at some level bad outcome, but a true improvements would be achieved only with real time Correction devices (old style switching type ^[106] modern low speed DSP driven ^[107] and near real-time ^[108]). Most modern devices reducing a wide range problems, while maintain short ROI and significant reduction of ground currents. Another reason to mitigate the problems is to lower cost of operation and generation of the electric energy, which commonly done by Electric Power Distribution companies in conjunction with a Generation companies. Power Quality out of unity would cause a serious erroneous responses from all kind of analog and digital equipment, where the response unpredictable.

Phase Balancing

Currently most common distribution network and generation of Electrical Power done with 3 phase structures, where special attention paid to the phase balancing and as results reduction of ground current. It is true to an Industrial or commercial network where is most power used in 3 phase machines, but light commercial and residential users would not have a real-time capabilities to do a phase balancing. Often this issues lead to unexpected equipment behavior or malfunctions and in most extreme cases could catch fire. For example, sensitive professions analog or digital recording equipment always need to be connected to well balanced and well grounded Power Networks. To determine and mitigate the cost of the unbalanced Electric Network, electric companies in most cases charge by demand or as separate category for heavy dis-balanced loads. There is a few simple techniques available for the balancing,^[109] but in dynamic world of demanding loads 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 around the year 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.^[110]

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.^[111] 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.^[112] 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.^[113]

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

External links

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