On 9 September 2025, the EU adopted its 19th package of sanctions against Russia, banning gas imports. While dependence has fallen, Russia still supplies about 18–19% of EU gas. Replacing this share means turning to LNG from the U.S., Qatar, or Norway — at 30–50% higher cost due to liquefaction, shipping, and regasification. Households will face persistent pressure on energy bills, while industries risk losing competitiveness. Countries with renewables or nuclear, like France and Sweden, are better shielded; others remain vulnerable. The move strengthens Europe’s energy security but at the expense of higher short-term electricity prices.

The 19th package of EU sanctions against Russia, adopted on 19 September 2025, targets gas imports. Currently, about 18–19% of the EU’s gas imports (pipeline and LNG) still come from Russia. If this share is cut off, it will have to be replaced by supplies from other countries — at an estimated 30–50% higher cost due to liquefaction, shipping, and regasification.

Brussels,

Europe’s Energy Shock: Rising Prices in the Post-Russia Era

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By eEuropa

3 MINUTES READ

Imagine living in a city where the lights flicker, factories shut down occasionally, and your power bill doubles in a year. That was the reality across many parts of Europe from 2021-2023.

While debates often focus on geopolitics or renewables, the story of energy costs is first and foremost one of people and businesses. It’s about how Europe’s dependence on imported energy — from gas, oil, liquefied natural gas (LNG), and even electricity sources — inflates bills, squeezes industrial margins, and reshapes investment.

In this article, we walk you through the trends in electricity production, costs and prices in Europe over the 2020-2024 period; the way imports (especially from the U.S.) and rising gas and oil costs ripple through; and what this means for both households and companies.

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Shifts in Europe’s Electricity Production (2020-2024)

Energy mix evolution: In 2023, about 45.4% of EU electricity came from renewable energy sources, 31.7% from fossil fuels, and 22.8% from nuclear power. consilium.europa.eu Renewables (wind, solar, hydro, biomass, etc.) have been increasing steadily. Solar overtook coal in 2024 in terms of electricity generated. ember-energy.org+2ember-energy.org+2
Decline in fossil fuels: Use of coal and gas for electricity production has been declining, especially in 2023-2024, both because of climate policy and rising costs. ember-energy.org+1
Production trends: Solar and wind saw record new capacity in 2023, which fed into generation in 2024. Total electricity demand has been relatively flat or slightly declining in many countries, in part because of efficiency measures and, in some cases, reduced industrial activity.

Electricity Prices & Costs: Households vs Industry

Household (domestic) consumers:

Period	Average EU price including taxes (medium household: 2,500-5,000 kWh/year)
H1 2022	Sharp rise, reaching approx. €0.24 / kWh excluding taxes at peak in H2 2022. Including taxes, even higher.
H2 2023	Slight decline: ~€0.2226 / kWh excluding taxes.
H2 2024	€0.2151 / kWh excluding taxes €0.2872 / kWh including taxes/levies/ VAT.

H1 2022 = fist-half of 2022

Non-household (industrial / medium industrial) consumers:

Period	EU average for non-household consumer (consuming ~500-2,000 MWh) including non-recoverable taxes etc.
H1 2022	Peak: ~€0.1986 / kWh excluding taxes.
H2 2024	Decline: roughly €0.1558 / kWh excluding taxes; later in H2 2024 rising slightly to ~€0.1597 / kWh excluding taxes. Including all, ~€0.1899 / kWh.

National variation examples, late 2024:

For households in H2 2024, Germany had one of the highest prices (~€0.3943 / kWh), Denmark ~€0.3763, Ireland ~€0.3699, Belgium ~€0.3313.
Lowest household prices in H2 2024 in Hungary (~€0.1032), Bulgaria, Malta.
For industrial consumers, highest non-household prices in H2 2024 in Cyprus (~€0.2578 / kWh) and Ireland (~€0.2552); lowest in Finland, Sweden. EU average ~€0.1899 / kWh.

Profit Margins and Cost Pressures in the Energy Sector

Several reports indicate that although production costs have risen sharply (fuel costs, CO₂ emission costs, supply chain), profit margins for utilities in many EU countries also increased during and immediately after the crisis period, as higher wholesale prices more than offset cost increases.

For example, net profit margins for European utility companies rose from about 8.8% in H1 2023 to 11.4% in H1 2024. The faster drop in production costs (ex: fuel, weaker gas prices, improved renewable output) compared to revenues in some months contributed.

In France and Italy, studies found gross profit margins in electricity & gas supply sectors increasing: in France, median gross profit margin moved from ~19% pre-2020 to 25-27% in 2021-2022.

But margin pressures remain uneven: companies exposed to gas import price volatility, weaker regulatory protection, or less ability to pass costs on to customers have suffered more. Also, inflation and wage increases eat into nominal margin gains.B

The Role of Imported Energy Costs (Gas, Oil, LNG from USA) and Their Spillover

When Europe sources more LNG from the U.S. or elsewhere, additional cost components come in: liquefaction, transport over long distances, shipping risk, and regasification. These add a “premium” over local pipeline gas or closer sources.

Rising oil prices also feed directly and indirectly: directly in transportation, heating, and industrial fuel; indirectly through gas-pegged pricing (in some energy contracts) and via carbon pricing mechanisms.

The steep rises in gas prices in 2021-2022 were a major driver of electricity price peaks. As gas is often marginal electricity generator, gas cost spikes show up in wholesale electricity prices. That drives household and industrial bills, especially in countries relying heavily on gas for generation. The switch toward renewables and nuclear reduces exposure, but not immediately or evenly.

The Role of Imported Energy Costs (Gas, Oil, LNG from USA) and Their Spillover

Households: electricity bills surged; households in Germany, Denmark, Belgium bore burdens many times higher than those in Eastern or Southeastern EU. Taxes and levies amplified those rises. Many governments had to step in with subsidies or relief; as those measures taper off, many consumers still see high base costs.

Industry: energy is a major cost centre. Companies with high energy intensity (e.g. aluminum, chemicals, cement) saw squeezed margins; some reduced output. There’s also a risk of relocation or loss of competitiveness vs industries in places with cheaper energy (e.g. U.S., some Asian countries). When industrial electricity prices are nearly double those in other major manufacturing economies, investment decisions shift.

Competitive implications: Countries or companies with cheaper renewables, better grid infrastructure, and more local generation have an advantage. Energy import dependency, especially from more expensive sources, increases risk.

Outlook and Possible Mitigation

It is expected a continued growth in renewables (solar, wind, hydro) plus nuclear (in some EU countries) is expected to push down generation cost in the long term. 2024 saw EU’s power mix reach its greenest yet, with ~50% from renewables + ~24% nuclear in early 2024.

More stable long-term contracts for gas/LNG, investment in storage/grids, demand response, and efficiency can dampen price swings.

Regulatory measures (tax/levy adjustments), carbon pricing, and potentially “windfall profits” taxes are likely to play a larger role in balancing profits and costs. Some countries have already or are considering such policies.

Conclusion

From 2020 to 2024, Europe has experienced a transformation in electricity production, price structure, and industrial cost burden.

The shift toward cleaner generation has advanced, but energy import costs (especially gas, LNG, oil) and external shocks have had a deep impact.

For households and businesses, the challenge is not just weathering the storm but positioning for a more stable, affordable, and clean energy future.

The EU is moving fast on bold measures to reshape the energy sector — don’t be the last to know.

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