Hari Seldon’s psychohistory could predict the fate of empires across millennia. Energy prices should be simpler. Yet economists still struggle to explain why a German factory pays three times what an American one does for the same kilowatt-hour.

A kilowatt-hour is a kilowatt-hour. Same physics. Same laws of thermodynamics. But the price of power varies wildly across major economies—shaped by geology, policy, history, and political choices made decades ago.

Some nations breathe easy. Others are slowly suffocating.

The price spread

The numbers are stark.

In 2024, industrial electricity prices in the EU reached approximately €0.20 per kWh, compared to €0.08 in China and €0.075 in the US. German industrial electricity prices sat around $0.19 per kWh—more than double the American rate.

Within Europe, the spread is equally dramatic. Companies in Ireland paid the highest prices at 25.6 cents per kWh, followed by Cyprus at 24.5 cents. The lowest prices were recorded in Finland at 9.3 cents, Sweden at 9.4 cents, and Denmark at 9.8 cents. Germany, at 23.3 cents per kWh, sat about 25% above the EU average. France came in at 17.1 cents—almost 27% below average.

For residential consumers, the gap widens further. UK electricity prices were higher than all but three EU states—Germany, Denmark, and Ireland—in the second half of 2024.

Same electrons. Vastly different bills.

China: the factory floor’s friend

China’s electricity prices are not set by markets. They are set by the state.

Beijing treats cheap power as industrial policy. Manufacturing competitiveness depends on it. The grid runs predominantly on domestic coal—cheap, abundant, requiring no foreign currency or vulnerable supply chains.

Prices are kept artificially low for industry, with state-owned utilities absorbing costs that would be passed to consumers elsewhere. Cross-subsidies flow in directions that serve policy goals, not profit margins.

China’s electricity prices run at roughly half the American level—and a fraction of European rates. The result: Chinese factories enjoy electricity costs that European competitors can only dream of.

India: subsidies and cross-subsidies

India’s prices look cheap on paper. The reality is messier.

Electricity is politically sacred. Subsidised power wins votes. Many states offer free or near-free electricity to farmers and rural households—funded by higher tariffs on commercial and industrial users.

The system leaks. Theft and non-payment are endemic. Distribution companies bleed losses. Infrastructure investment lags.

Coal provides around 70% of generation, keeping input costs low. But the pricing structure reflects politics as much as economics.

USA: the shale dividend

America struck lucky.

The shale revolution flooded the market with cheap natural gas. Henry Hub gas averaged about $2 per million BTU in 2024, compared with $11 in Europe and nearly $12 in Asia. That is a fivefold price advantage over European competitors.

About 35% of all US primary energy now comes from natural gas. Gas-fired power plants set the marginal price across much of the country. Unlike Europe, the US is a net energy exporter. It does not panic when global gas prices spike.

The shale revolution has created an environment where producers can turn a profit at historically low prices. Abundant reserves—estimated at nearly 4,000 trillion cubic feet of technically recoverable gas, more than a century of supply at current demand—underpin this advantage.

Regional variation matters. Texas, with its deregulated market and abundant wind, offers some of the cheapest power in the developed world. California, with aggressive renewable mandates and grid constraints, charges significantly more.

On average, American industry enjoys a substantial cost advantage over European and Asian competitors. This is not policy genius. It is geology.

France: the nuclear bet that paid off

France made a choice in the 1970s. After the oil shocks, it went all-in on nuclear.

In 2024, nuclear provided 67% of France’s power mix, generating 361.7 TWh. Hydropower had its highest production since 2013 at 74.7 TWh. The plants are old, sometimes creaky, but largely paid off. Fuel costs are minimal.

CO2-free power generation—nuclear and renewables—accounted for 95% of the power mix, resulting in a record low carbon intensity of just 21 grams of CO2 per kWh. For comparison, Germany’s figure is around 380 grams.

French industrial electricity prices sit almost 27% below the EU average. France exports power to its neighbours when their grids strain.

The nuclear bet was controversial. It now looks prescient.

Germany: the Energiewende hangover

Germany made a different choice. Several, in fact.

The Energiewende—the energy transition—poured hundreds of billions into renewables. Wind and solar now generate over half of Germany’s electricity on good days.

But Germany also shut down its nuclear plants. All of them. The last closed in April 2023.

And Germany hooked itself on Russian pipeline gas. That dependency shattered in 2022.

The result is an electricity price crisis. Production in energy-intensive industrial branches has declined almost continuously since early 2022. Industrial output for energy-intensive goods in 2025 remains roughly 17% lower than pre-2022 levels.

Four out of ten industrial companies are now considering reducing or relocating production outside Germany due to the energy situation. Among companies with more than 500 employees, more than half are contemplating this. The tendency is particularly strong among companies with high electricity costs: 25% were considering relocation in 2022, rising to 38% in 2023 and 45% in 2024.

BASF, one of Germany’s biggest individual gas consumers, announced it would cut up to 2,600 jobs worldwide due to cost pressure from the energy crisis, with the majority of positions axed in Germany. Production is moving to Belgium, the US, and Asia.

Germany’s new government plans to introduce an industrial electricity price of 5 cents per kWh for energy-intensive industries from January 2026—the current price sits around 14 cents. Whether this comes too late remains to be seen.

The levies, taxes, and policy costs layered onto German electricity bills now exceed the cost of generation itself. Ideology has a price.

UK: marginal pricing and policy costs

Britain’s grid is cleaner than it was a decade ago. Coal is nearly gone. Offshore wind is booming. But prices remain stubbornly high.

The culprit is partly structural. Britain uses marginal pricing—the most expensive plant needed to meet demand sets the price for all generation. Gas was the marginal source, determining the price 98% of the time in 2021.

Even if only 10% of supply comes from gas, it sets the price for 100% of the market. When gas prices spiked in 2022, so did electricity bills, even though much of the supply came from cheaper wind and nuclear.

In 2024, the wholesale price made up 32% of the typical annual household electricity bill. In 2022, during the peak of the gas crisis, this figure was 68%.

Policy costs add another layer. Subsidies for renewables, legacy nuclear support contracts, and social levies all land on consumer bills.

Britain generates plenty of cheap electrons. It just charges as if it doesn’t.

Japan: island constraints

Japan is an island nation with minimal domestic energy resources. It imports nearly everything—LNG, coal, oil.

Before Fukushima, nuclear provided around 30% of generation. After the disaster, most reactors shut down. Japan suspended operations at all 48 remaining nuclear reactors by 2013 and relied almost exclusively on imported natural gas to replace the lost generation.

LNG consumption in the electric power sector jumped from 5.8 billion cubic feet per day in 2010 to 7.8 billion cubic feet per day by 2012—a 35% increase in just two years.

Restarts have been slow. As of late 2023, only 11 gigawatts of Japan’s nuclear capacity had returned to service. Public opposition remains fierce. The grid cannot easily interconnect with neighbours—there is no European-style continental network to lean on.

Compared with other developed nations, electricity in Japan is relatively expensive, and since the loss of nuclear power after Fukushima, the cost has risen significantly.

What drives the differences

Pull back and the patterns emerge.

Countries with cheap domestic fuel—whether American shale, Chinese coal, or French uranium—enjoy lower prices. Those dependent on imports pay a premium, plus a geopolitical risk surcharge.

Market structure matters. Regulated systems can suppress prices through cross-subsidies and state intervention. Liberalised markets expose consumers to volatility—and to the true cost of policy choices.

Policy decisions compound over decades. Germany’s nuclear exit, France’s nuclear build-out, Britain’s dash for gas in the 1990s—all of these shape today’s bills.

Geography is destiny. Islands and isolated grids cannot arbitrage across borders. Continental networks provide resilience.

Why it matters

Electricity prices are not abstract. They are competitive advantage—or competitive death.

Energy-intensive industries migrate toward cheap power. Aluminium smelters, data centres, chemical plants—they go where the electrons are affordable.

Germany is losing industrial capacity. The United States is gaining it. China is defending its manufacturing base with every tool available, cheap power chief among them.

For policymakers, the lesson is uncomfortable. Energy transitions have costs. Those costs land somewhere—on consumers, on industry, on competitiveness. Pretending otherwise does not make it so.

The kilowatt-hour remains the same everywhere. The price of that kilowatt-hour tells you everything about a nation’s choices, constraints, and future.