An assessment of supply-side and demand-side policies in EU-28 household electricity prices

The increase seen in household electricity prices in the European Union over recent years was strongly influenced by the regulation component. This paper focuses on an empirical assessment of both supply-side and demand-side policies in the European Union over the period 2000-2015. More specifically, on the supply side, it analyses renewable energy support policies and the electricity industry liberalisation process and, on the demand side, energy taxes, thus contributing to the debate on the effect of these factors on household electricity prices. Using pooled Ordinary Least Square clustered at country level and regarding solar photovoltaic energy support policies, the results suggest that both the costs of quota obligation systems and the electricity sector liberalisation process have raised household electricity prices. Energy taxes, however, do not have a significant influence on such prices. Based on these results, recommendations are proposed for policy-makers. © 2020, Aalborg University press. All rights reserved.