after Russia invaded Ukraine in early 2022 Europe escaped the immediate energy shock better than many expected while prices did shoot up reserves didn't run out and most countries were able to find alternative fuel sources to cheap Russian gas however this winter prices have been rising steeply yet again and gas reserves are depleting at a much quicker rate than many expected so in this video we're going to be taking a look at why prices are rising again why this isn't great news for Eur Europe and how Europe may go about bringing down [Music] prices explore which
world leaders are winning and which are losing every week with our podcast the world leader leaderboard find it on the tood our podcast YouTube channel or in your favorite podcast app so let's get straight into it Energy prices well down since Russia's Invasion are still higher than pre 2022 levels in Germany wholesale electricity prices have averaged €1 138 per megawatt hour since March 2022 about 280% higher than between 2016 and 2019 this has led German consumers paying nearly four times more for electricity during this period meanwhile in France Italy and the Netherlands consumers saw prices
increased by over 200% while Poland faced 180% rise and Spain experienced a 103% rise in recent months Energy prices have been getting even higher still in November the average wholesale base power prices in these countries climbed to their highest levels in at least 20 months in Germany electricity prices soared to ,000 euros per megawatt hour in the beginning of December marking the highest price recorded in 18 years now while these numbers are still far below the 2022 Peak it still paints a worrying picture for Europe's energy landscape so what explains the recent uptick well many
countries and European media Outlets have pointed the finger at Germany Europe's largest economy and top manufacturer Germany which has experienced a prolonged period of Cloudy windless weather this autumn and winter so far has consequently seen a reduction in its Renewable Power I.E wind and solar output with lower renewable output Germany has had to tap into other electricity sources however this has been difficult for the country as it struggled to diversify its energy sources which before Russia invaded Ukraine relied heavily on cheap Russian gas the incumbent Coalition led by Chancellor Olaf Schultz phased out nuclear energy
and shut down its last nuclear power plant in 2023 Germany also doesn't produce much of its own natural gas and like much of the rest of Europe has been phasing out the burning of coal in line with the blocks green energy transition so instead of producing its own electricity Germany decid to import it from other European countries and in 2023 for the first time in 20 years Germany imported more electricity than it exported now in order to make this happen Germany has relied particularly hard on gas from Norway which last year accounted for 43% of
its gas Imports but as a result of this High German demand Energy prices in Norway have shot up reaching levels not seen since 2009 which are now six times higher than the European average another Nordic country that is also affected by these price hikes is Sweden the Swedish energy Minister recently explicitly blamed high prices on Germany's decision to close down its nuclear power plants and argued that if Germany was able to produce more electricity for the European network via nuclear power then prices would stay lower however Germany isn't the only culprit to blame for these
Rising prices and the way we see it there are at least two other reasons why firstly Europe is having a particularly cold winter much colder than the last two Winters since Russia's invasion of Ukraine and as a result European households have been heating their homes for longer than usual depleting European natural gas supplies well for most of the Year European gas storage has been higher than the average over the past 5 years over the last few weeks European gas supplies have fallen sharply by 15% and are currently filled at around 80% of their capacity now
while 80% capacity doesn't sound that bad and is definitely enough to last the winter energy consultancy icis predicts that by the end of March this figure May plummet to just 33% which raises concerns that Europe will struggle to replenish its gas reserves ready for next winter secondly Energy prices are projected to increase even further following the expiration of a gas Transit agreement between Ukraine and Russia for context this deal signed in 2019 allowed the Russian State Energy company gas prom to pump natural gas through Ukraine's vast network of pipelines into the EU and despite a
block wide commitment to end Reliance on Moscow by 2027 a handful of EU member States including Slovakia Hungary and Austria have continued to buy Russian gas through this route which in 2023 accounted for around 65% of their gas demand losing this Supply will now likely increase gas prices across Europe Slovakia's prime minister Robert fito has already stated that the country is facing a major gas crisis and mova has declared a 60-day state of emergency so to summarize all of that rapidly deing gas reserves looming Supply cuts from Moscow and Germany's insufficient energy production largely explains
why Energy prices have been rising now of course this isn't great news for Europe economically speaking the main worry here is inflation that's because we need energy for well virtually everything and if the cost of energy goes up then well the cost of basically everything else goes up too if Goods get more expensive then people can't buy as many things which basically makes them poorer and reduces domestic demand this is also pretty bad for European industry too which is already in trouble facing low demand production in many Key Energy intensive sectors like chemicals and steel
have tumbled to recorde lows plants are shutting down and factories are carrying out Mass layoffs in order to deal with Rising costs even putting the European economy aside politically speaking a new energy crisis will also undermine energy cooperation in Europe at the moment the eu's common energy market harmonizes prices across the continent so European States pay similar prices for their electricity this requires states to essentially share their energy resources which everyone's happy to do when there's plenty to go round but they're less keen on when supplies are limited like now for instance in July Germany
was accused by czechia of hoarding gas supplies meanwhile Norway is considering cutting shared energy links to Denmark and renegotiating its existing connections to Germany so if things get really bad over this winter it's possible that other EU States will simply refuse to share their electricity with one another for example fito has already threatened to cut electricity to Ukraine in retaliation after ke refused to renew its gas Transit deal with Russia but for now at least Europe has avoided a full-blown energy crisis mainly by increasing its Imports of liquefied natural gas mostly from the US but
also from Russia which exported a record amount of LNG to Europe in 2024 however LNG supplies are volatile largely because they're directly correlated to the global energy Market therefore Europe may need to invest more in its energy transition and further develop its nuclear capabilities which is both costly and contentious or they could end up signing deals with countries like aaban who could Supply the continent with more gas all of this could potentially make life more difficult for European leaders and shift European relationship with leaders from around the world we're heading into 2025 with a whole
new group of politicians Business Leaders and influential people the question is then who'll come out on top who is the world's most influential person that's what we're trying to find out with our official most influential person list which we need your help with so if you want to help us decide on who the most influential person in the entire world is then you can click the link in the description to cast your own ballot for your personal top 10 helping to shape the overall ranking and your vote is super important but voting closes on January
15th so do your Democratic Duty and cast your ballot for the world's most influential person also if you're wondering why we're doing this it's for the next issue of our magazine too long that's because our next issue will contain the entire list as well as fascinating articles about the top 25 those won't just be boring profiles about each of the people either there'll be interesting stories about who these people really are where their power truly resides and how they wield their influence if you want to re-order a copy of the magazine you can do so
by clicking the link in the description oh and if you pick up a premium copy of the magazine you'll also get access to our internal awards ceremony where the team will first learn and react to your votes live plus you'll also get to watch tldr team members sit down to discuss their own personal lists fight it out and try and agree for once you'll also get access to a behind the scenes podcast the bull and get your name printed in the thank you section of the magazine anyway to find out more cast your Vote or
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