In many European countries, railways are the biggest single consumer of electricity as 80% of train kilometers are run on electric energy, a growing portion of which comes from renewable sources. Railways are therefore heavily impacted by the ongoing energy price hike.
According to a CER survey on electricity prices, railway companies are paying up to 420€ per megawatt-hour (MWh) in 2022. On average the electricity price has at least tripled compared to 2021, with several countries experiencing a more than 10-fold increase. Railway companies currently struggle to plan for 2023 as many energy contracts need to be re-negotiated and the price is now forecast in some cases to exceed 500€/MWh. As a result, rail costs continue to increase significantly.
Therefore CER puts forward several concrete proposals to all EU Ministers. Firstly, and as identified by the International Energy Agency, railways must be included in a strategic toolkit for saving energy. Member States should pursue a holistic approach in introducing demand reduction targets and promote the energy-efficiency-first principle in prioritizing the sector for energy consumption.
CER Executive Director Alberto Mazzola said: “It would be paradoxical if no measures are taken to protect railways from skyrocketing electricity prices. All efforts made by the sector to abandon fossil fuels would vanish and traffic would shift to more polluting modes of transport as diesel prices are subject to a much lower increase. On this basis, railways as an energy-efficient, ever more sustainable mode of transport must be protected with adequate energy at affordable prices through a lower price cap”.
The European Commission's proposal on capping the price of low-cost electricity such as wind, solar, and nuclear is a good step, but the €180/MWh ceiling is considerably higher than the electricity price before the crisis. The price cap should therefore be lowered. Finally, Member States should take into consideration rail’s high exposure in the electricity market when allocating the surplus revenues resulting from the application of the cap.