Various factors have led to the fact that in 2022 the price of electricity in the world is rising. In October of this year, the average escalation in the Euro zone (19 countries) showed 41.5% in its annual dataaccording to an OECD report.
The situation is repeated to a greater or lesser extent around the world, since the annual rate has climbed to double digits in a large number of countries, with few exceptions. This is reflected in the data that reveals that the countries gathered in the OECD have had increases of 28.1% in their annual rate.
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According to the International Energy Agency (IEA), the situation in Europe, especially, occurred after Russia’s invasion of Ukraine, which led to energy such as oil, gas or coal having high increases in their prices. As a consequence, the energy generated from thermal sources saw an escalation in its generation cost and, therefore, its sale.
Depending on the level of autonomy in generation, the situation in each country has been different. In the case of Germany, its high dependence on Russian gas that they stopped importing due to the sanctioning measures against the country.
Alejandro Lucio, director of Óptima Consultores and an expert in energy issues, explained that there is a factor prior to the situation of the conflict and that explains why the price of energy worldwide has had this behavior.
Due to the pandemic, consumption was reduced and with the restrictions on world trade, a drop in the production of goods was generated; however, the shock of the economic recovery led to a significant jump in consumption and the world industry could not adapt to this sudden demand. As a consequence, inflation began to rise.
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“Not only in Colombia are energy prices indexed to inflation. This is a model that is used practically all over the world.”, Lucio points out. In this way, energy had already begun an upward path related to tariff models.
Although Lucio clarifies that each market is different and all countries have different tariff methodologies, the truth is that this is a common factor in the economies.
To this was added that commodity prices also faced a sudden shock from sanctions on Russian gas. In this way, the situation in the nations varies depending on their particular situation in terms of inflation and dependence on energy sources from other places.
In the case of Colombia, Lucio recalls, indexation played a key role in the rise that has occurred, which explains why with the cutoff to October (see graph) energy has increased 19% compared to the data for 2021. That is why Despite the fact that the local matrix is mainly hydroelectric and the level of reservoirs is quite high (85.2% according to XM data), the price of generation remains high.
This has led the national government to seek contingency measures that lead to a normalization in the price of the kilowatt. In fact, the Ministry of Mines and Energy promoted the Pact for Tariff Justice, which sought to generate reductions between 4% and 9% in the price of this public service.
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Yet others Particular cases such as Spain stand out, since with a cutoff to the tenth month of the year, its annual data was one figure, reaching 8%.
Lucio comments that the Iberian country is connected to gas from Africa, with which Russian gas cuts have not had a major impact on their prices. Contrary to that of countries that have had to resort to importing liquefied natural gas (LNG) from countries like the United States.
In the case of Mexico, the government of Andrés Manuel López Obrador maintains a pricing policy that makes the rate stable for both residences and businesses and industry, so its increases have been minimal. According to OECD data, in this country the annual increase was 3.2%.
Daniela Morales Soler
