01
Procurement / energy price
The price of each kilowatt hour delivered.
Driven by fuel prices, CO₂ costs and the balance of supply and demand on the power markets.
Energy costs
European energy costs compared: what they mean for your power bill
In industry, electricity is no longer just an overhead. It is a key competitive factor. Anyone manufacturing in Europe today often starts at a structural disadvantage on power prices compared with competitors in the US or China, and that disadvantage is measurable.
Industrial power prices 2024 (relative)
Industrial power prices compared, 2024.
Problem
Europe pays far more for industrial electricity
Recent analyses show:
+100%
EU vs USA
For energy-intensive industries in the EU, average electricity prices in 2024 were roughly double the US level.
+50%
EU vs China
Around 50% above the prices paid by comparable industrial sites in China.
+65%
EU vs 2019
Compared with 2019, electricity prices for these companies in Europe are still around 65% higher, although they have eased somewhat since the extremes of 2022.
European companies still face electricity prices around twice as high as in the US. The Draghi report for the European Commission even puts the gap at two to three times.
What this means for you: even if you buy your energy professionally, as a European industrial site you carry a price premium that competitors in other regions do not.
Breakdown
What really drives your power bill
At their core, your electricity costs come down to three components.
02
Grid fees
Charges for using the transmission and distribution grids.
They cover the costs of grid expansion, maintenance and system services (for example redispatch, which reschedules power plants when renewable feed-in is high).
03
Taxes, levies and surcharges
For example electricity tax, concession fees and various surcharges.
Together with grid fees and generation costs, one of the three main components of the electricity price.
The reality for many manufacturers: procurement can be optimised through good contracts. Grid fees and capacity charges become a blind spot, and that is exactly where flexible load control and batteries come in.
Capacity charge
Grid fees and capacity charges: load peaks drive costs
Grid fees for electricity typically consist of two parts:
- an energy charge (€/kWh) for the volume of electricity drawn and
- a capacity charge (€/kW) for the highest power drawn (annual peak demand).
The capacity charge is especially critical for industrial companies, because short load peaks can drive your costs for an entire year.
Real project examples (medium voltage)
Customer 1
Regional grid operator, southern Germany
+64% in 2 years
2022
€131.30/kW
2024
€215.60/kW
Customer 2
Manufacturer, NRW
+64% in 2 years
2022
€94.60/kW
2024
€155.00/kW
Figures from real grid operator price sheets, not from model calculations.
The underlying pattern is clear: grid fees are rising, and capacity charges in particular are quietly eroding margins at many sites.
Volatility
Steady consumption, volatile prices: why inflexibility is expensive
The core problem at many industrial sites is simple:
- Production runs at a fairly constant level. Shifts, lines and processes can only be rescheduled to a limited extent.
- Market electricity prices, by contrast, fluctuate sharply over the course of the day, across the week and between seasons.
- At the same time, load peaks occur when several machines start up at once or loads overlap unfavourably.
Wholesale prices in the European power system have eased somewhat since the crisis, but they remain well above earlier years and are still volatile.
What this means for you in practice:
Rising grid fees and capacity charges squeeze margins
The necessary grid expansion and system services feed into grid fees that vary widely from region to region. Companies with high power peaks pay disproportionately more.
Power price spikes hit with no buffer
In hours with little feed-in (for example little wind or sun) or high demand, wholesale prices rise sharply. Without flexibility in consumption or storage, you buy power exactly when it is most expensive.
A lack of demand flexibility weakens competitiveness
Sites that make their load more flexible, shave peaks or shift consumption to other times can lower their specific energy costs. Those that do not use these levers carry permanently higher electricity costs per tonne of product, in a market where competitors in other regions already pay less.
Diagnosis
How to tell you have an electricity cost problem
Typical signs we see again and again in our projects:
- Electricity is one of your top 10 cost items in production.
- Your grid fees and capacity charges have risen significantly in recent years, even though your energy consumption has grown only moderately.
- Your load profile shows a few short peaks that set your annual peak demand.
- Most of your production runs at times when electricity prices are statistically higher (weekdays, daytime).
- You have several sites but no consolidated view of load peaks, grid fees and specific electricity costs per tonne of product.
If several of these apply, there is a high chance that your electricity costs today are higher than they need to be, and that your site is exposed to further cost increases, however good your current supply contract looks.
Next step
Our suggested next step
Instead of talking about excessive energy prices in the abstract, we make the issue concrete. In a free site analysis for your sites, we show you
- how your electricity costs split across procurement, grid fees and capacity charges,
- what role individual load peaks play in your annual costs,
- and what realistic savings potential load flexibility and batteries can deliver.
On this basis, you decide for yourself whether a battery is the right lever for your site, with reliable figures instead of marketing promises.
Contact
Check the battery potential
of your site
We assess it using your operating and consumption data.
