Europe will get stung this year with the biggest energy bill in a decade as hyperinflation in natural gas and power prices hits homes and factories across the continent, according to Citigroup Inc., Report informs referring to Bloomberg.
Using current forward prices, the region’s total primary energy bill will come in at about $1 trillion, the bank said in a report. While previous peaks were largely driven by surging oil prices, this time it’s about the cost of heating and powering everything from homes to transport and big industrial plants that will help reduce carbon emissions.
Europe is deep in an energy crunch with the lowest gas stocks for at least a decade. Benchmark prices for the fuel surged more than 250% last year, and tensions between the west and top supplier Russia are making traders the most jittery they have been for years. Lower wind speeds have also curbed output of renewable energy that the green revolution is built around.
Gas represents about 25% of Europe’s energy needs, compared with about 10% in Asia, Citigroup said. Because of importance as a power-plant fuel, surging gas prices feed into electricity rates too.
In the fall of 2021, an energy crisis erupted in Europe, after spot gas prices began to skyrocket, exceeding $1,000 per 1,000 cubic meters.
Gas futures prices in Europe fell by more than 3% and dropped below $ 1,000 per 1,000 cubic meters.