Three years on: How Russia's invasion reshaped energy prices across Europe

Daftar Isi

Three years ago, on 24 February, Russia invaded Ukraine. The conflict is still going on and has had a big impact on energy prices, with the proportion of Russia's pipelined gas in EU imports dropping from over 40% in 2021 to around 8% in 2023, according to the European Council.

A major Russian military build-up and rising aggressive talk in 2021, indicating a planned attack on Ukraine, had already caused a big jump in energy commodity prices throughout the year. While European governments put in place various measures to soften the blow on households, household energy prices kept rising steadily throughout 2021 and jumped even further after the invasion.

Choosing a baseline for price comparisons is a tough job. To give you a better understanding of how price changes affect households, we're using multiple comparisons based on the Household Energy Price Index (HEPI), which is put together by Energie-Control Austria, MEKH, and VaasaETT.

The "Pre-Invasion One-Year Average" covers the 12 months from February 2021 to January 2022, while the "Three-Year Post-Invasion Average" spans from February 2022 to January 2025.

During the time before the invasion, the average cost of electricity for homes in the EU capital cities was 20.5 cents per kilowatt hour. This price went up to 26.5 cents per kilowatt hour after the invasion - a rise of 29.5%.

During this time, Amsterdam experienced the biggest jump, with electricity prices increasing by 76%, followed closely by Rome (74%) and Vilnius (64%).

"Mkts reliant on fossil fuels, like the Netherlands, experienced higher price volatility, highlighting the importance of energy diversification & regulatory frameworks for price stability," Ivana Rogulj, Wolfgang Eichhammer, and Stavros Spyridakos, senior experts at the Institute for European Energy and Climate Policy (IEECP), told Euronews Business.

Dr Yousef Alshammari, the President of the London College of Energy Economics, pointed out that natural gas makes up 45% of Italy's electricity mix, with renewables contributing no more than 30%.

Among the capitals of Europe's top five economies, London (47%) recorded the second-biggest increase after Rome. Paris (30%) was a bit above the EU average (29.5%), while Berlin (19%) had a slightly more modest growth.

The effect of the composition of electricity

In contrast, Madrid experienced a small drop (0.4%) in electricity prices between the time before the invasion and the time after.

Regarding why households in Spain have been significantly less affected by the surge in electricity prices, Rogulj, Eichhammer and Spyridakos said: "Spain's substantial wind, solar, and hydro capacity has reduced reliance on fossil fuels, limiting exposure to external price shocks."

"Spain's regulated electricity tariff (PVPC) helped balance price volatility by linking retail electricity prices to longer-term wholesale market averages, shielding consumers from extreme short-term price fluctuations", they said.

When non-EU cities are included, Oslo saw the biggest drop, with electricity prices dropping 10%, followed by Budapest, down 9%, and Bucharest, down 8%. These cities are the exceptions to the overall trend of rising electricity prices across Europe.

The changes are in euros, not local currencies, which may impact the results.

These results show that Western and Northern Europe saw the biggest jumps in electricity prices, while the Baltic and Eastern European capitals also had significant increases. On the other hand, Southern Europe experienced more modest price changes.

Experts from the IEECP, Rogulj, Eichhammer, and Spyridakos, said: "Countries in the Nordic region get a benefit from making electricity from renewable sources like hydropower, geothermal power, and wind, which helps them be less affected by big price swings in fossil fuels."

Electricity prices: Before the crisis compared to today

Comparing electricity prices back in early 2021 when the energy market was more stable and before the tensions between Russia and Ukraine escalated, to January 2025, shows a big rise. In January 2025, households in the capitals of EU countries paid 36% more for electricity than they did in January 2021.

When Kyiv is left out of the analysis, Amsterdam shows the biggest jump, with power prices going up by 89% over this four-year period. Significant rises were also seen in Vilnius (81%), Brussels (77%), and Bern (76%).

On the other hand, Budapest was the only capital where prices fell by 13%.

In the top five economies, London experienced the biggest jump, with electricity prices increasing by 66%, followed by Rome with a rise of 60% and Paris up by 45%.

If we compare January 2022 to January 2025, the average household electricity prices, including taxes, rose by only 3.4% across EU capital cities. In the EU, the biggest jump was seen in Vilnius, where prices soared by 53%, followed by Paris, which experienced a 34% increase.

In the Australian capital, prices rose by 69% over the same period.

Several cities have seen significant decreases in electricity costs over the past three years. Oslo recorded the largest decline at 25%, while London dropped by 21%, and Bucharest and Copenhagen both decreased by 20%.

High price instability in the post-invasion period

As shown in the graph below, electricity prices in the capitals of the top five economies varied greatly in response to Russia's invasion of Ukraine.

Over the past four years, Rome saw its electricity prices reach a record high, peaking at 68.7 cents per kilowatt-hour in October 2022, up from 43.7 cents per kilowatt-hour in July 2022.

Similarly, London's electricity prices reached a peak of 64.2 cents per kilowatt hour in August 2022, before falling to 39.5 cents per kilowatt hour the following month.

Sydney had the most stable prices over this period.

How have residential gas prices altered since the Russian invasion?

We only have fuel price data from October 2021 prior to the invasion, while the full dataset is available from January 2022 onwards. This means we can't calculate an average price before the invasion, but the available data still helps us understand price trends.

In October 2021, the average gas price for residential users in European city capitals was 8.5 cents per kilowatt-hour. By January 2022, it had already increased to 11.3 cents per kilowatt-hour, before reaching a record high of 16.5 cents per kilowatt-hour in September 2022, the highest level seen in the past three years.

As of January 2025, prices had dropped to 11.1 cents per kilowatt hour, a bit lower than they were in January 2022, but still a lot higher than they were before the invasion.

Stockholm had the highest average price for electricity over the three years following the invasion (February 2022 to January 2025) at 28.7 cents per kilowatt-hour, followed closely by Amsterdam at 21.6 cents per kilowatt-hour.

plays a vital part in this scenario.

Amsterdam bore the brunt of the sharp increase in gas prices in 2022.

In 2022, households in Amsterdam were the hardest hit by skyrocketing gas prices. That year, the average annual gas price in Amsterdam reached 31.0 cents per kilowatt hour, a lot higher than Stockholm's 23.9 cents per kilowatt hour, even though Stockholm led the way in the three-year average.

Rogulj, Eichhammer, and Spyridakos from the IEECP also blamed the spike in gas prices in the Netherlands on the shutdown of production at the Groningen gas field due to concerns about earthquakes.

Budapest (2.6 euro cents per kilowatt hour), Belgrade (4.1 euro cents per kilowatt hour), and Zagreb (4.7 euro cents per kilowatt hour) had the lowest average gas prices over three years.

In Prague, the three-year average petrol price was 110% higher than in October 2021, followed by Berlin (97%), Dublin (86%) and Amsterdam (77%), while the EU average was 37% higher.

Dr Cyril Stephanos from acatech, the National Academy of Science and Engineering, noted that Germany didn't have any operational LNG terminals at the time of Russia's invasion of Ukraine.

"Both Germany and Austria have been heavily reliant on Russian natural gas imports", he said.

These have been partially substituted by increased supplies from Norway and through the LNG market. "However, LNG imports tend to be more expensive than pipeline gas because of the extra costs of compression, transportation and decompression", he added.

IEECP experts also pointed out that looking for expensive alternatives resulted in significant price increases.

In comparison, Budapest (-26%) and Bucharest (-9%) experienced a decrease in gas prices from October 2021.

Despite recent price stabilisation, gas prices in EU capital cities were still 31% higher in January 2025 compared to October 2021. Warsaw had the biggest price jump (109%), followed by Lisbon (77%) and Berlin (72%).

Gas prices were as changeable as anything in 2022, with Amsterdam experiencing some pretty wild price swings. However, from 2023 onwards, prices became a lot more steady compared to 2022, particularly in Amsterdam and the top five European economies.

Dr. Alshammari explained that a range of measures taken across Europe have helped bring down natural gas prices. These measures include filling gas storage tanks to almost full capacity, securing alternative gas suppliers, implementing a price limit on Russian gas that still allows European countries to import gas, and adopting energy-saving measures to reduce energy usage.

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Professor Jan Osicka, Program Director of Energy Policy Studies at Masaryk University in the Czech Republic, reckons the EU has handled the crisis quite well.

"The solidarity mechanism has done its job, the internal market has kept working and hasn't been changed too much," he said.

However, Rogulj, Eichhammer, and Spyridakos stress that long-term price stability relies on the global supply dynamics and the accelerated integration of renewable energy, particularly in the gas sector.