Coal prices have undergone a similar trend. Despite a brief downturn following the global financial crisis in 2008, the price of thermal coal peaked and has since dropped significantly since the recession, standing at around 107 U.S. dollars per metric ton in 2018. Due to its importance in the electric power sector, rising coal prices are expected to drive electricity prices higher over the long-term. Residential electricity prices in the U.S. are projected to grow by another 1.2 percent by 2020, having already seen an increase every year since 2003.
While European natural gas prices are also on the rise, the price of U.S. natural gas is expected to see a further increase, rising above previous prices. Therefore, it is little surprising that natural gas end user prices are highest in European countries, including Sweden, Finland and Germany. Over the last decades, natural gas prices have experienced the least variability, in comparison to other fossil fuels. Regional differences in natural gas prices can be due to the different natural gas sources.
This overall upward trend in energy prices across the globe can be attributed to the rapid economic development - combined with the growing thirst for energy - of large nations such as China and India, as well as the consistently high energy use in industrialized nations. This development will strain the world’s ability to meet the yearly rise in energy demand, which is currently projected at some 1.6 percent a year until 2030, meaning that commodities such as oil and gas will become even more costly.
* real 2010 U.S. dollars (constant dollars, reflecting buying power relative to 2010)