Electricity prices around the world – a historical analysis

Being a highly developed economy has never meant achieving development through high prices for electricity. The IEA's industrial price series^[1] shows that in the early 1980s, the entire G7-plus-Nordic group was clustered tightly between roughly $0.01 and $0.08 per kWh — cheap, abundant power was a shared feature of the developed world, not an exception.

High electricity prices in the Global North, compared to the historical average in the respective countries, are quite recent. Prices stayed clustered and low well into the 2000s. Only afterwards did the group fan out: the UK, Italy and Germany climbed steeply on the back of carbon levies, network charges, renewable surcharges and gas-price exposure, while Norway, Canada and Sweden stayed cheap thanks to hydro and nuclear baseload. This also has a direct correlation with cost-reflective tariffs that were introduced in European countries through the 2000s.

Interestingly, an analysis of historical data indicates that high electricity prices are also becoming more common today in developing economies. A World Bank survey of 38 Sub-Saharan African markets in 2014 found prices ranging from $0.02/kWh (Ethiopia, heavily subsidised) to $0.51/kWh (Liberia, an all-diesel grid), with a median of $0.17/kWh — well above Norway, Sweden or Canada. IEA data for the same period tells the same story for island economies: Barbados, Grenada and Haiti paid roughly 4–5x the developed-world average. Small, import-dependent grids relying on costly diesel, lacking economies of scale and carrying weak transmission networks deliver expensive power — not cheap power — to consumers with low ability to pay.

But cheap electricity in developed countries was not accidental — it was the result of deliberate choices made during decades of industrialisation. The next section traces exactly how low prices enabled the development of the Global North.
 

Bottom line: Historically, the Global North experienced its era of rapid development enabled by cheap electricity. While recent price spikes in developed nations stem from modern policy choices rather than development itself, many developing countries today face even higher rates. This raises a critical question — was low-cost power just a byproduct of the growth in the Global North, or was it the catalyst that made the development possible?