Although wholesale electricity rates have start dropping again, they still stand at around €85 per megawatt hour, roughly double the €40–50 seen in 2021, before Russia’s full-scale invasion of Ukraine. At certain points in 2024, prices even exceeded €90, explained Claude Simon, head of energy sales at Enovos.
According to Simon, when Russia curtailed gas deliveries in 2022, panic spread across the European energy market. He stated that, with around 40% of Europe’s gas supply previously coming from Russia, much of which was used for electricity generation in neighbouring countries, suppliers suddenly had to find alternatives. Simon clarified that the market has since stabilised, but that the cost of procuring replacement gas remains high. He stressed that consumers in Luxembourg were shielded from the full impact thanks to government intervention.
Simon noted that before the crisis, a household using 4,000kWh a year paid roughly €850 including taxes. State subsidies kept prices at that level until the end of 2024. With support reduced in 2025, annual costs rose to around €1,100.
For 2026, households can expect to pay about €990. The individual subsidy will disappear, but the government will instead assume part of the network usage fees: a contribution amounting to €150 million, which will also benefit businesses. As Simon pointed out, the government’s new contribution ensures that all customers now receive some form of support.
This support will lower the price of electricity from 33.9 cents to 30.1 cents per kilowatt-hour, and to 25.8 cents when factoring in the compensation mechanism for renewable energy. The announcement was made on Tuesday by Energy Minister Lex Delles.
Luxembourg produces a small share of its own electricity, but the vast majority is imported from Germany. Around 60% of that supply comes from renewable sources, with the rest generated mainly from gas and, to a lesser extent, coal. According to Simon, forecasting price trends remains difficult because renewable output fluctuates heavily depending on the weather, meaning fossil-fuel generation still needs to compensate for shortfalls.
Despite these uncertainties, Simon said that prices appear to be on a downward trend for the time being, although it remains impossible to give precise long-term predictions. He said that the broader market is still in flux, as Germany continues to phase out coal and nuclear power, while the share of wind and solar rises. This increases volatility unless supported by solutions such as large-scale battery storage, which itself requires major investment.
