[diatone]

Chiming in as Australian with no context on European situation. AFAICT the key drivers of cost inflation are to do with reconfiguring the electric grid to transfer power efficiently and reliably from plants that produce renewable energy. However, the grid is set up to do so from non-renewable sources. And you want to do it while smoothly operating the network. This is extremely hard. Doing so quickly therefore elevates prices. That’s the rationale I could imagine being the case in EU markets.

[phicoh]

It's not that simple. For example, in the The Netherlands, the use of electricity was stable for a long time. Mostly because all kinds of equipment (light bulbs, etc) got more efficient.

Grid operators predicted that with the energy transition, demand would rise, but politics wanted to keep prices low and limited investments.

So now, there is a big problem in the entire country connecting companies or new residential areas to the grid independent of how electricity is generated.

At the same time, the government is extremely forward looking and builds massive interconnection points on the North-Sea. Not a bad idea in the long run, but in the short run it does make electricity from wind on sea more expensive.

That said, the biggest hit to EU countries is that cheap natural gas disappeared. Coal is not cheap and extremely polluting. Natural gas was cheap for a while. Until it wasn't.

[tpm]

The European situation is a bit more complicated. It was very well known for a long time that Russia is a ticking time bomb in our backyard yet we made ourselves nearly dependent on their energy supplies and now combined with the push for renewables (which in my opinion is the right thing to do) we have a crisis. Now there are also lot of countries in the EU with different priorities, so while in theory we could build long-range HVDC connections across borders, it is very hard to do.