Nikkei and G7 Analysis of 8 Major Countries
Italy, the Most Expensive Country, Moves Away from 'Zero Nuclear Power'
"Price Differences Large Depending on Fossil Fuel Dependence"
Last year, South Korea's residential electricity rates were found to be the lowest among eight countries, including the Group of Seven (G7) major economies.
According to a report on the 17th by Japan's Nihon Keizai Shimbun (hereafter 'Nikkei'), Nikkei calculated the 2022 residential electricity rates for the G7 countries and South Korea based on data from the International Energy Agency (IEA).
The results showed that Italy had the highest residential electricity rates among the surveyed countries last year. Nikkei calculated the rates based on an average monthly electricity consumption of 260 kWh (kilowatt-hours), which is typical for Japanese households. Using this calculation, Italy's electricity rate was 13,083 yen (approximately 129,000 won, applying last year's average exchange rate of 100 yen = 985.24 won).
Italy has no nuclear power plants and relies on liquefied natural gas (LNG) thermal power for about half of its electricity production. As a result, it was hit hard by the surge in energy prices last year, causing rates to increase by 40% compared to 2021. The United Kingdom ranked second with 12,942 yen (about 128,000 won), a close margin behind Italy. The UK also depends on LNG for about 40% of its electricity generation. Germany ranked third with approximately 11,921 yen (about 117,000 won).
From fourth to seventh place were Japan (8,993 yen, about 89,000 won), France (7,425 yen, about 73,000 won), the United States (5,168 yen, about 51,000 won), and Canada (4,269 yen, about 42,000 won), respectively. Japan's electricity rates surged by 31% compared to 2021. The sharp rise in electricity rates in Japan, Italy, and the UK was due to the significant increase in international prices of LNG and coal, which are fuels for thermal power generation, following Russia's invasion of Ukraine.
In contrast, France, the United States, and Canada, which have lower dependence on fossil fuels, had relatively cheaper electricity rates than the three aforementioned countries. France generates about 70% of its electricity from nuclear power, the United States produces shale gas (natural gas developed and produced from shale formations rich in hydrocarbons), and Canada relies on hydropower for about 60% of its electricity generation, utilizing its terrain.
"South Korea's electricity rates are about 40% of Japan's level"
Nikkei reported that South Korea's electricity rate was 3,650 yen (about 36,000 won), the lowest among the eight countries. This is nearly 60% cheaper compared to Japan.
Regarding these results, Nikkei explained, "Although South Korea's dependence on fossil fuels is similar to Japan's, the major shareholder of Korea Electric Power Corporation, which is responsible for power supply, is the government. Therefore, political factors are involved, making it difficult to raise electricity rates."
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