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EU Energy Price Surge is driving up electricity and gas costs, inflation, and cost of living across the EU, prompting tax cuts, price caps, subsidies, and household support measures in France, Italy, Spain, and Germany.

Key Points

A surge in EU gas and electricity costs driving inflation and prompting government subsidies, tax cuts, and price caps.

✅ Low-income EU households now spend 50-70 percent more on energy.

✅ Governments deploy tax cuts, price caps, and direct subsidies.

✅ Gas-dependent power markets drive electricity price spikes.

Higher energy prices, including for natural gas, are pushing up electricity prices and the cost of living for households across the EU, prompting governments to cut taxes and provide financial support to the tune of several billion euros.

In the United Kingdom, households are bracing for high winter energy bills this season.

A series of reports published by Cambridge Econometrics in October and November 2022 found that households in EU countries are spending much more on energy than in 2020 and that governments are spending billions of euros to help consumers pay bills and cut taxes.

In France, for example, the poorest households now spend roughly one-third more on energy than in 2020. Between August 2020 and August 2022, household energy prices increased by 37 percent, while overall inflation increased by 9.2 percent.

“We estimate that the increase in household energy prices make an average French household €410 worse off in 2022 compared to 2020, mostly due to higher gas prices,” said the report.

In response to rising energy prices, the French government has adopted price caps and support measures forecast to cost over €71 billion, equivalent to 2.9 percent of French GDP, according to the U.K.-based consultancy.

In Italy, fossil fuels alone were responsible for roughly 30 percent of the country’s annual rate of inflation during spring 2022, according to Cambridge Econometrics. Unlike in other European countries, retail electricity prices have outpaced other energy prices in Italy and were 112 percent higher in July 2022 than in August 2020, the report found. Over the same time period, retail petrol prices were up 14 percent, diesel up 22 percent, and natural gas up 42 percent.

We estimate that households in the lowest-income quintile now spend about 50 percent more on energy than in 2020.

“We estimate that before government support, an average Italian household will be spending around €1,400 more on energy and fuel bills this year than in 2020,” the report said. “Low-income households are worse affected by the increasing energy prices: we estimate that households in the lowest-income quintile now spend about 50 percent more on energy than in 2020.”

Electricity production in Italy is dominated by natural gas, which has also led to a spike in wholesale electricity prices. In 2010, natural gas accounted for 50 percent of all electricity production. The share of natural gas fell to 33 percent in 2014, but then rose again, reaching 48 percent in 2021, and 56 percent in the first half of 2022, according to the report, as gas filled the gap of record low hydro power production in 2022.

In Spain, where electricity prices have seen extreme spikes, low-income households are now spending an estimated 70% more on energy than in 2020, according to Cambridge Econometrics.

Low-income squeeze
In Spain, low-income households are now spending an estimated 70% more on energy than in 2020, according to Cambridge Econometrics. It noted that the Spanish government has intervened heavily in energy markets by cutting taxes, introducing cash transfers for households, and capping the price of natural gas for power generators. The latter has led to lower electricity prices than in many other EU countries.

These support measures are forecast to cost the Spanish government over €35 billion, equivalent to nearly 3 percent of Spain’s GDP. Yet consumers will still feel the burden of higher costs of living, and rolling back electricity prices may prove difficult in the near term.

In March, electricity prices alone were responsible for 45 percent of year-on-year inflation in Spain but prices have since fallen as a result of government intervention, Cambridge Econometrics said. Between May and July, fossil fuels prices accounted for 19-25 percent of the overall inflation rate, and electricity prices for 16 percent.

Support measures
Rising inflation is also a real challenge in Germany, Europe’s largest economy, where German power prices have surged this year, adding pressure. Also there, higher gas prices are to blame.

“We estimate that the increase in energy prices currently make an average household €735 worse off in 2022 compared to 2020, mostly due to higher gas prices,” Cambridge Econometrics said, in a report focused on Germany.

The German government has introduced a number of support measures in order to help households, businesses and industry to pay energy bills, amid rising heating and electricity costs for consumers, including price caps that are expected to take effect in March next year. Moreover, households’ energy bills for December this year will be paid by the state. According to the report, these interventions will mitigate the impact of higher prices “to some extent”, but the aid measures are forecast to cost the government nearly 5 percent of GDP.

Fossil-fuel effect
In addition to gas, higher coal prices have also pushed up inflation in some countries, and U.S. electricity prices have reached multi-decade highs as inflation endures.

In Poland, which is heavily dependent on coal for electricity generation, fossil fuels accounted for roughly 40 percent of Poland’s overall year-on-year inflation rate in June 2022, which stood at over 14 percent, the consultancy said.

The price of household coal, which is widely used in heating Polish homes, increased by 157 percent between August 2021 and August 2022.

Higher energy prices in Poland are partly due to Polish and EU sanctions against Russian gas and coal. Other drivers are the weakening of the Polish zloty against the U.S. dollar and the euro, and the uptick in global demand after COVID-19 lockdowns, said Cambridge Econometrics.

Electricity prices have risen at a much slower pace than energy for transport and heating, with an annualized increase of 5.1 percent.

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Ottawa Hydro Substation Heritage Designation highlights Hydro Ottawa's 1920s architecture, Art Deco facades, and municipal utility history, protecting key voltage-reduction sites in Glebe, Carling-Merivale, Holland, King Edward, and Old Ottawa South.

Key Points

A city plan to protect Hydro Ottawa's 1920s substations for architecture, utility role, and civic electrical heritage.

✅ Protects five operating voltage-reduction sites citywide

✅ Recognizes Art Deco and early 20th century utility architecture

✅ Allows emergency demolition to ensure grid safety

The city of Ottawa is looking to designate five hydro substations built nearly a century ago as heritage structures, a move intended to protect the architectural history of Ottawa's earliest forays into the electricity business, even as Ottawa electricity consumption has shifted in recent years.

All five buildings are still used by Hydro Ottawa to reduce the voltage coming from transmission lines before the electricity is transmitted to homes and businesses, and when severe weather causes outages, Sudbury Hydro crews work to reconnect service across communities.

Electricity came to Ottawa in 1882 when two carbon lamps were installed on LeBreton Flats, heritage planner Anne Fitzpatrick told the city's built heritage subcommittee on Tuesday. It became a lucrative business, and soon a privately owned monopoly that drew public scrutiny similar to debates over retroactive charges in neighboring jurisdictions.

In 1905, city council held a special meeting to buy the electrical company, which led to a dramatic drop in electricity rates for residents, a contrast with recent discussions about peak hydro rates for self-isolating customers.

The substations are now owned by Hydro Ottawa, which agreed to the heritage designations on the condition it not be prevented from emergency demolitions if it needs to address incidents such as damaging storms in Ontario while it works to "preserve public safety and the continuity of critical hydro electrical services."

Built in 1922, the substation at the intersection of Glebe and Bronson avenues was the first to be built by the new municipal electrical department, long before modern battery storage projects became commonplace on Ontario's grid.

The largest of the substations being protected dates back to 1929 and is found at the corner of Carling Avenue and Merivale Road. It was built to accommodate a growing population in areas west of downtown including Hintonburg and Mechanicsville.

The substation on Holland Avenue near the Queensway is different from the others because it was built in 1924 to serve the Ottawa Electric Railway Company. The streetcar company operated from 1891 to 1959, and urban electrical infrastructure can face failures such as the Hydro-Québec manhole fire that left thousands without power.

This substation on King Edward Avenue was built in 1931 and designed by architect William Beattie, who also designed York Street Public School in Lowertown and the substation on Carling Avenue. 

The last substation to be built in a 'bold and decorative style' is at 39 Riverdale Ave. in Old Ottawa South, according to city staff. It was designed in an Art Deco style by prominent architect J. Albert Ewart, who was also behind the Civic Hospital and nearby Southminster Church on Bank Street.

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California Blackouts expose grid reliability risks as PG&E deenergizes lines during high winds. Mandated solar and wind displace dispatchable natural gas, straining ISO load balancing, transmission maintenance, and battery storage planning amid escalating wildfire liability.

Key Points

California grid shutoffs stem from wildfire risk, renewables, and deferred transmission maintenance under mandates.

✅ PG&E deenergizes lines to reduce wildfire ignition during high winds.

✅ Mandated solar and wind displace dispatchable gas, raising balancing costs.

✅ Storage, reliability pricing, and grid upgrades are needed to stabilize supply.

California is again facing widespread blackouts this season. Politicians are scrambling to assign blame to Pacific Gas & Electric (PG&E) a heavily regulated utility that can only do what the politically appointed regulators say it can do. In recent years this has meant building a bunch of solar and wind projects, while decommissioning reliable sources of power and scrimping on power line maintenance and upgrades.

The blackouts are connected with the legal liability from old and improperly maintained power lines being blamed for sparking fires—in hopes that deenergizing the grid during high winds reduces the likelihood of fires. 

How did the land of Silicon Valley and Hollywood come to have developing world electricity?

California’s Democratic majority, from Gov. Gavin Newsom to the solidly progressive legislature, to the regulators they appoint, have demanded huge increases in renewable energy. Renewable electricity targets have been pushed up, and policymakers are weighing a revamp of electricity rates to clean the grid, with the state expected to reach a goal of 33% of its power from renewable sources, mostly solar and wind, by next year, and 60% of its electricity from renewables by 2030.

In 2018, 31% of the electricity Californians purchased at the retail level came from approved renewables. But when rooftop solar is added to the mix, about 34% of California’s electricity came from renewables in 2018. Solar photovoltaic (PV) systems installed “behind-the-meter” (BTM) displace utility-supplied generation, but still affect the grid at large, as electricity must be generated at the moment it is consumed. PV installations in California grew 20% from 2017 to 2018, benefiting from the state’s Self-Generation Incentive Program that offers hefty rebates through 2025, as well as a 30% federal tax credit.

Increasingly large amounts of periodic, renewable power comes at a price—the more there is, the more difficult it is to keep the power grid stable and energized. Since electricity must be consumed the instant it is generated, and because wind and solar produce what they will whenever they do, the rest of the grid’s power producers—mostly natural gas plants—have to make up any differences between supply and immediate demand. This load balancing is vital, because without it, the grid will crash and widespread blackouts will ensue.

California often produces a surplus of mandated solar and wind power, generated for 5 to 8 cents per kilowatt hour. This power displaces dispatchable power from natural gas, coal and nuclear plants, resulting in reliable power plants spending less time online and driving up electricity prices as the plants operate for fewer hours of the day. Subsidized and mandated solar power, along with a law passed in California in 2006 (SB 1638) that bans the renewal of coal-fired power contracts, has placed enormous economic pressure on the Western region’s coal power plants—among them, the nation’s largest, Navajo Generating Station. As these plants go off line, the Western power grid will become increasingly unstable. Eventually, the states that share their electric power in the Western Interconnect may have to act to either subsidize dispatchable power or place a value on reliability—something that was taken for granted in the growth of the America’s electrical system and its regulatory scheme.

California law regarding electricity explicitly states that “a violation of the Public Utilities Act is a crime” and that it is “…the intent of the Legislature to provide for the evolution of the ISO (California’s Independent System Operator—the entity that manages California’s grid) into a regional organization to promote the development of regional electricity transmission markets in the western states.” In other words, California expects to dictate how the Western grid operates.

One last note as to what drives much of California’s energy policy: politics. California State Senator Kevin de León (the author served with him in the State Assembly) drafted SB 350, the Clean Energy and Pollution Reduction Act. It became law in 2015. Sen. de León followed up with SB 100 in 2018, signed into law weeks before the 2018 election. SB 100 increased California’s renewable portfolio standard to 60% by 2030 and further requires all the state’s electricity to come from carbon-free sources by 2045, a capstone of the state’s climate policies that factor into the blackout debate.  

Sen. de León used his environmental credentials to burnish his run for the U.S. Senate against Sen. Dianne Feinstein, eventually capturing the endorsements of the California Democratic Party and billionaire environmentalist Tom Steyer, now running for president. Feinstein and de León advanced to the general in California’s jungle primary, where Feinstein won reelection 54.2% to 45.8%.

De León may have lost his race for the U.S. Senate, but his legacy will live on in increasingly unaffordable electricity and blackouts, not only in California, but in the rest of the Western United States—unless federal or state regulators begin to place a value on reliability. This could be done by requiring utility scale renewable power providers to guarantee dispatchable power, as policymakers try to avert a looming shortage of firm capacity, either through purchase agreements with thermal power plants or through the installation of giant and costly battery farms or other energy storage means.

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CER Interactive Electricity Bill Tool compares provincial electricity prices, fees, taxes, and usage. Explore household appliance costs, hydroelectric generation, and consumption trends across Canada with interactive calculators and a province-by-province breakdown.

Key Points

An online CER report with calculators comparing electricity prices, fees, and usage to explain household energy costs.

✅ Province-by-province bill, price, and consumption comparison

✅ Calculator for appliance and electronics energy costs

✅ Explains fees, taxes, regulation, and generation sources

Canadians have a new way to assess their electricity bill in a new, interactive online report released by the Canada Energy Regulator (CER).

The report titled What is in a residential electricity bill? features a province-to-province comparison of electricity bills, generation and consumption. It also explains electricity prices across the country, including how Calgary electricity prices have changed, allowing people to understand why costs vary depending on location, fees, regulation and taxes.  

Learn how fees and usage impacts your electricity bill in new online CER tool
Interactive tools allow people to calculate the cost of household appliances and electronic use for each province and territory, and to understand how Ontario rate increases may affect monthly bills. For example, an individual can use the tools to find out that leaving a TV on for 24-hours in Quebec costs $5.25 per month, while that same TV on for a whole day would cost $12.29 per month in Saskatchewan, $20.49 per month in the Northwest Territories, and $15.30 per month in Nova Scotia.

How Canadians use energy varies as much as how provinces and territories produce it, especially in regions like Nunavut where unique conditions influence costs. Millions of Canadians rely on electricity to power their household appliances, charge their electronics, and heat their homes. Provinces with abundant hydro-electric resources like Quebec, B.C., Manitoba, and Newfoundland and Labrador use electricity for home heating and tend to consume the most electricity.

By gathering data from various sources, this report is the first Canadian publication that features interactive tools to allow for a province-by-province comparison of electricity bills while highlighting different elements within an electricity bill, a helpful context as Canada faces a critical supply crunch in the years ahead.

The CER monitors energy markets and assesses Canadian energy requirements and trends, including clean electricity regulations developments that shape pricing. This report is part of a portfolio of publications on energy supply, demand and infrastructure that the CER publishes regularly as part of its ongoing market monitoring.

"No matter where you go in the country, Canadians want to know how much they pay for power and why, especially amid price spikes in Alberta this year," says lead author Colette Craig. "This innovative, interactive report really explains electricity bills to help everyone understand electricity pricing and consumption across Canada."

Quick Facts

• Quebec ranks first in electricity consumption per capita at 21.0 MW.h, followed by Saskatchewan at 20.0 MW.h, Newfoundland and Labrador at 19.3 MW.h.
• About 95% of Quebec's electricity is produced from hydroelectricity.
• Provinces that use electricity for home heating tend to consume the most electricity.
• Canada's largest consuming sector for electricity was industrial at 238 TW.h. The residential and commercial sectors consumed 168 TW.h and 126 TW.h, respectively.
• In 2018, Canada produced 647.7 terawatt hours (TW.h) of electricity. More than half of the electricity in Canada (61%) is generated from hydro sources. The remainder is produced from a variety of sources, such as fossil fuels (natural gas and petroleum), nuclear, wind, coal, biomass, solar.
• Canada is a net exporter of electricity. In 2019, net exports to the U.S. electricity market totaled 47.0 TW.h.
• The total value of Canada's electricity exports was $2.5 billion Canadian dollars and the value of imports was $0.6 billion Canadian dollars, resulting in 2019 net exports of $1.9 billion.
• All regions in Canada are reflected in this report but it does not include data that reflects the COVID-19 lockdown and its effects on residential electricity bills.
   

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Yukon Renewable Energy Funding backs wind turbines, grid-scale battery storage, and transmission line upgrades, cutting diesel dependence, lowering greenhouse gas emissions, and strengthening Yukon Energy's isolated grid for remote communities, local jobs, and future growth.

Key Points

Federal support for Yukon projects adding wind, battery storage, and grid upgrades to cut diesel use and emissions.

✅ Three 100 kW wind turbines will power Destruction Bay.

✅ 8 MW battery storage smooths peaks and reduces diesel.

✅ Mayo-McQuesten 138 kV line upgrade boosts reliability.

Kluane First Nation in Yukon will receive a total of $3.1 million in funding from the federal government to install and operate wind turbines that will help reduce the community’s diesel reliance.

According to a release, the community will integrate three 100-kilowatt turbines in Destruction Bay, Yukon, providing a renewable energy source for their local power grid that will reduce greenhouse gas emissions and create local jobs in the community.

A $2-million investment from Natural Resources Canada came from the Clean Energy for Rural and Remote Communities Program, part of the Government of Canada’s Investing in Canada infrastructure plan, which supports green energy solutions across jurisdictions. Crown-Indigenous Relations’ and Northern Affairs Canada also contributed a $1.1-million investment from the Northern REACHE Program.

Also, the Government of Canada announced more than $39.2 million in funding for two Yukon Energy projects that will increase the reliability of Yukon’s electrical grid, including exploration of a potential connection to the B.C. grid to bolster resiliency, and help build the robust energy system needed to support future growth. The investment comes from the government’s Green Infrastructure Stream (GIS) of the Investing in Canada infrastructure plan.

Project 1: Grid-scale battery storage

The federal government is investing $16.5 million in Yukon Energy’s construction of a new battery storage system in Yukon. Once completed, the 8 MW battery will be the largest grid-connected battery in the North, and one of the largest in Canada, alongside major Ontario battery projects underway.

The new battery is a critical investment in Yukon Energy’s ability to meet growing demands for power and securing Yukon’s energy future. As an isolated grid, one of the largest challenges Yukon Energy faces is meeting peak demands for power during winter months, as electrification grows with EV adoption in the N.W.T. and beyond.

When complete, the new system will store excess electricity generated during off-peak periods, complementing emerging vehicle-to-grid integration approaches, and provide Yukoners with access to more power during peak periods. This new energy storage system will create a more reliable power supply and help reduce the territory’s reliance on diesel fuel. Over the 20-year life of project, the new battery is expected to reduce carbon emissions in Yukon by more than 20,000 tonnes.

A location for the new battery energy storage system has not been identified. Yukon Energy will begin permitting of the project in 2020 with construction targeted to be complete by mid-2023.

Project 2: Replacing and upgrading the Mayo to McQuesten Transmission Line

Yukon Energy has received $22.7 million in federal funding to proceed with Stage 1 of the Stewart to Keno City Transmission Project – replacing and upgrading the 65 year-old transmission line between Mayo and McQuesten. The project also includes the addition of system protection equipment at the Stewart Crossing South substation. The Yukon government, through the Yukon Development Corporation, has already provided $3.5 million towards planning for the project.

Replacing the Mayo to McQuesten transmission line is critical to Yukon Energy’s ability to deliver safe and reliable electricity to customers in the Mayo and Keno regions, mirroring broader regional transmission initiatives that enhance grid resilience, and to support economic growth in Yukon. The transmission line has reached end-of-life and become increasingly unreliable for customers in the area.

The First Nation of Na-Cho Nyak Dun has expressed their support of this project. The project has also been approved by the Yukon Environmental and Socio-Economic Assessment Board.

Yukon Energy will begin replacing and upgrading the 31 km transmission line between Mayo and McQuesten in 2020. Construction is expected to be complete in late 2020. When finished, the new 138 kV transmission line will provide more reliable electricity to customers in the Mayo and Keno regions and be equipped to support industrial growth and development in the area, including the Victoria Gold Mine, with renewable power from the Yukon grid.

Planning work for the remainder of the Stewart to Keno City Transmission Project has been completed. Yukon Energy continues to explore funding opportunities that are needed to proceed with other stages of the project.

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Ontario Utilities Hurricane Irma Aid mobilizes Hydro One and Toronto Hydro crews to Tampa Bay, Florida, restoring power outages with bucket trucks, lineworkers, and mutual aid alongside Florida Power & Light after catastrophic damage.

Key Points

Mutual aid sending Hydro One and Toronto Hydro crews to Florida to restore power after Hurricane Irma.

✅ 205 workers, 52 bucket trucks, 30 support vehicles deployed

✅ Crews assist Tampa Bay under FPL mutual aid agreements

✅ Weeks-long restoration projected after catastrophic outages

Hurricane Irma has left nearly 7 million homes in the southern United States without power and two Ontario hydro utility companies are sending teams to help out as part of Canadian power crews responding to the disaster.

Toronto Hydro is sending 30 staffers to aid in the restoration efforts in Tampa Bay while Hydro One said Sunday night that it would send 175 employees after receiving a request from Florida Power and Light.

“I've been on other storms down in the states and they are pretty happy to see you especially when they find out you're from Canada,” Dean Edwards, one of the Hydro One employees heading to Florida, told CTV Toronto.

Most of the employees are expected to cross the border on Monday afternoon and arrive Wednesday.

Among the crews, Hydro One says it will send 150 lines and forestry staff, as well as 25 supporting resources, including mechanics, to help. Crews will bring 52 bucket trucks to Florida, as well as 30 other vehicles, reflecting their Ontario storm restoration experience with large-scale deployments, and pieces of equipment to transport and replace poles.

Hurricane Irma has claimed at least 45 lives in the Caribbean and United States thus far. Officials estimate that restoring power to Florida will take weeks to bring power back online.

“I’m sure a lot of people wish they could go down and help, fortunately our job is geared towards that so we're going to go down there to do our best and represent Canada,” said Blair Clarke, who’s making his first trip over the border.

Hydro One has reciprocal arrangements with other North American utilities to help with significant power outages, and its employees have provided COVID-19 support in Ontario as part of broader emergency efforts. All the costs are covered by the utility receiving the help.

In the past, the utility has sent crews to Massachusetts, Michigan, Florida, Ohio, Vermont, Washington, DC, and the Carolinas, while Sudbury Hydro crews have worked to reconnect service after storms at home as well. In 2012, 225 Hydro One employees travelled to Long Island, N.Y., to help out with Hurricane Sandy.

“This is what our guys and gals do,” Natalie Poole-Moffat, vice president of Corporate Affairs for Hydro One, told CP24. “They’re fabulous at it and we’re really proud of the work they do.”

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