The cost of fossil fuels in the United States electric power industry varies depending on the source that is used. In general, fossil fuels cost about 3.12 U.S. dollars per million British thermal units (Btu) in 2023, ranging from 2.36 U.S. dollars per million Btu for coal to 16.53 U.S. dollars per million Btu for petroleum. Coal and petroleum costs Of the fossil fuels used for electric power generation, petroleum costs have been the most volatile, while coal costs have remained relatively stable in comparison. Average costs of petroleum, which includes various kinds of oil, fluctuated significantly over the period of consideration and reached a peak in 2022 during the energy crisis that hit the global fossil fuels market. Natural gas price Similar to coal, natural gas prices can vary based on the region. Being a large producer of domestic natural gas, the U.S. has notably lower prices compared to Europe and Japan. Due to greater natural gas production through hydraulic fracturing, prices in the U.S. have experienced an overall decline over the last decade or so, falling to 2.4 U.S. dollars per million Btu in 2020. However, natural gas markets around the world experienced price shocks in 2021 and 2022 as a result of the Russia-Ukraine war. In the United States, average natural gas costs for use in the electric power sector more than tripled in 2022.

All fuel prices experienced a decrease in prices between January and April 2025. The price index was also lower than at the same time in the previous year. Overall, prices have been notably less volatile throughout 2024 and 2025 when compared to 2021 and 2022.

As of 2017, fossil gas was the cheapest source of energy at ** U.S. dollars (USD) per megawatt hour (MWh). This price steadily increased, reaching ** USD/MWh as of 2023, making fossil gas the most expensive option for energy. While solar energy was priced at *** USD/MWh in 2017, the price is forecasted to reach ** USD/MWh in 2025, lowering again to ** USD/MWh by 2028.

United States Electric Generating Plant: Cost of Fossil Fuel Receipts (CR): Coal data was reported at 2.060 USD/MN BTU in Aug 2018. This stayed constant from the previous number of 2.060 USD/MN BTU for Jul 2018. United States Electric Generating Plant: Cost of Fossil Fuel Receipts (CR): Coal data is updated monthly, averaging 1.452 USD/MN BTU from Jan 1973 (Median) to Aug 2018, with 548 observations. The data reached an all-time high of 2.510 USD/MN BTU in Dec 2014 and a record low of 0.378 USD/MN BTU in Jan 1973. United States Electric Generating Plant: Cost of Fossil Fuel Receipts (CR): Coal data remains active status in CEIC and is reported by Energy Information Administration. The data is categorized under Global Database’s United States – Table US.RB067: Electricity Overview.

The extent to which fossil fuel prices paid by consumers do not reflect the fuels' full financial and social costs, expressed as an aggregate value for each fuel and economy.

Undercharging for fuels is disaggregated into explicit and implicit subsidies. Explicit subsidies measure the amount that the financial cost to supply a fuel (i.e., the supply cost) exceeds the price paid by the fuel user. Implicit subsidies measure the difference between a fuel's full social cost and the price paid by the fuel user, exclusive of any explicit subsidy. A fuel's full social cost includes both supply costs and negative externalities, which are costs imposed on society due to consuming the fuel and primarily include local air pollution, climate change, and broader externalities related to driving.

It should be noted that the concept of "subsidies" used here differs from the definition of subsidies in macroeconomic statistics.

For further details, please refer to https://climatedata.imf.org/datasets/d48cfd2124954fb0900cef95f2db2724_0/about

In 2023, coal was by far the cheapest fossil fuel in terms of weight, with the price per metric ton amounting to 210.26 British pounds. By comparison, gas oil was the most expensive fossil fuel by weight, with the price per metric ton amounting to 1,100 British pounds.

Portugal Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Total: Natural Gas data was reported at 169.126 USD mn in 2022. This records an increase from the previous number of 16.836 USD mn for 2021. Portugal Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Total: Natural Gas data is updated yearly, averaging 13.082 USD mn from Dec 2010 (Median) to 2022, with 13 observations. The data reached an all-time high of 169.126 USD mn in 2022 and a record low of 0.044 USD mn in 2013. Portugal Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Total: Natural Gas data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Portugal – Table PT.OECD.ESG: Environmental: Fossil Fuel Support by Sector: OECD Member: Annual.

According to Cognitive Market Research, the global Fossil Fuel Fired Water Heater market size will be USD 6915.2 million in 2024. It will expand at a compound annual growth rate (CAGR) of 4.60% from 2024 to 2031. North America held the major market share for more than 40% of the global revenue with a market size of USD 2766.08 million in 2024 and will grow at a compound annual growth rate (CAGR) of 2.8% from 2024 to 2031. Europe accounted for a market share of over 30% of the global revenue with a market size of USD 2074.56 million. Asia Pacific held a market share of around 23% of the global revenue with a market size of USD 1590.50 million in 2024 and will grow at a compound annual growth rate (CAGR) of 6.6% from 2024 to 2031. Latin America had a market share of more than 5% of the global revenue with a market size of USD 345.76 million in 2024 and will grow at a compound annual growth rate (CAGR) of 4.0% from 2024 to 2031. Middle East and Africa had a market share of around 2% of the global revenue and was estimated at a market size of USD 138.30 million in 2024 and will grow at a compound annual growth rate (CAGR) of 4.3% from 2024 to 2031. Natural Gas held the highest Fossil Fuel Fired Water Heater market revenue share in 2024. Market Dynamics of Fossil Fuel-Fired Water Heater Market Key Drivers for Fossil Fuel-Fired Water Heater Market Increasing demand for energy efficiency to propel market growth Regulations requiring minimum energy efficiency criteria for water heaters encourage manufacturers to innovate and create more efficient fossil fuel-powered devices. This encourages research and development in the sector, resulting in the introduction of sophisticated technologies that enhance efficiency and reduce consumption. Energy efficiency standards drive up demand for high-efficiency fossil fuel-fired water heaters. Consumers and companies are more inclined to purchase items that meet energy efficiency standards, resulting in greater sales and market growth for manufacturers that provide efficient models. High-efficiency fossil fuel-fired water heaters not only save energy but also provide long-term cost benefits to users. Energy-efficient versions can reduce energy costs by using less fuel, making them more appealing to consumers looking for cost-effective heating alternatives. Rising demand for the commercial sector to propel market growth The commercial sector, which includes hotels, restaurants, hospitals, schools, and manufacturing facilities, has a high need for hot water for a variety of uses, including sanitation, cooking, cleaning, and space heating. Fossil fuel-fired water heaters, noted for their large capacity and quick heating capabilities, are ideal for meeting these demands. Commercial businesses require a continuous and dependable supply of hot water to run their activities. Fossil fuel-powered water heaters are renowned for their dependability, providing continuous hot water delivery even during high-demand periods. Their rapid recovery periods and huge capacity make them ideal for commercial applications. Many commercial buildings already have natural gas infrastructure in place, making fossil fuel-powered water heaters an easy option for retrofitting or updating existing systems. The interoperability with existing infrastructure lowers installation costs and time, making it an appealing alternative for commercial building owners and operators. Restraint Factor for the Fossil Fuel-Fired Water Heater Market Shifting costs of fuel to hinder the growth of the fossil fuel-fired water heater market Fluctuating fuel costs create unpredictability in operational expenditures for homeowners and companies who use fossil fuel-fired water heaters. This unpredictability can make it difficult for customers to adequately budget for their energy bills, discouraging them from investing in fossil fuel-fired heating systems. During periods of high fuel costs, fossil fuel-fired water heaters may lose competitiveness against alternative heating technologies such as electric heat pumps or solar water heaters. Consumers may choose more cost-effective or renewable energy sources to offset the effects of shifting fuel costs. Fluctuating fuel costs might cause changes in consumer behavior toward energy conservation and efficiency. Consumers may prioritize energy-saving measures and investments in more efficient heating technology to offset the impact of fuel price volatility, lowering demand for fossil-fueled wat...

United States US: Fossil Fuel Support by Sector: Residential: USD: 2021 Price: Direct Transfer: End Use Electricity data was reported at 0.000 USD mn in 2021. This stayed constant from the previous number of 0.000 USD mn for 2020. United States US: Fossil Fuel Support by Sector: Residential: USD: 2021 Price: Direct Transfer: End Use Electricity data is updated yearly, averaging 0.308 USD mn from Sep 2010 (Median) to 2021, with 12 observations. The data reached an all-time high of 1.042 USD mn in 2013 and a record low of 0.000 USD mn in 2021. United States US: Fossil Fuel Support by Sector: Residential: USD: 2021 Price: Direct Transfer: End Use Electricity data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s United States – Table US.OECD.ESG: Environmental: Fossil Fuel Support by Sector: OECD Member: Annual.

The extent to which fossil fuel prices paid by consumers do not reflect the fuels' full financial and social costs, expressed as an aggregate value for each fuel and economy. Undercharging for fuels is disaggregated into explicit and implicit subsidies. Explicit subsidies measure the amount that the financial cost to supply a fuel (i.e., the supply cost) exceeds the price paid by the fuel user. Implicit subsidies measure the difference between a fuel's full social cost and the price paid by the fuel user, exclusive of any explicit subsidy. A fuel's full social cost includes both supply costs and negative externalities, which are costs imposed on society due to consuming the fuel and primarily include local air pollution, climate change, and broader externalities related to driving. It should be noted that the concept of "subsidies" used here differs from the definition of subsidies in macroeconomic statistics. For further details, please refer to https://climatedata.imf.org/datasets/d48cfd2124954fb0900cef95f2db2724_0/about

Mexico MX: Fossil Fuel Support by Sector: Electricity Generation: USD: 2021 Price: Direct Transfer: Coal data was reported at 0.000 USD mn in 2021. This stayed constant from the previous number of 0.000 USD mn for 2020. Mexico MX: Fossil Fuel Support by Sector: Electricity Generation: USD: 2021 Price: Direct Transfer: Coal data is updated yearly, averaging 0.000 USD mn from Dec 2010 (Median) to 2021, with 12 observations. The data reached an all-time high of 0.000 USD mn in 2021 and a record low of 0.000 USD mn in 2021. Mexico MX: Fossil Fuel Support by Sector: Electricity Generation: USD: 2021 Price: Direct Transfer: Coal data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Mexico – Table MX.OECD.ESG: Environmental: Fossil Fuel Support by Sector: OECD Member: Annual.

United States US: Fossil Fuel Support by Sector: Other: USD: 2021 Price: Tax Expenditure: Coal data was reported at 124.787 USD mn in 2021. This records an increase from the previous number of 121.397 USD mn for 2020. United States US: Fossil Fuel Support by Sector: Other: USD: 2021 Price: Tax Expenditure: Coal data is updated yearly, averaging 152.102 USD mn from Sep 2010 (Median) to 2021, with 12 observations. The data reached an all-time high of 156.616 USD mn in 2018 and a record low of 108.316 USD mn in 2014. United States US: Fossil Fuel Support by Sector: Other: USD: 2021 Price: Tax Expenditure: Coal data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s United States – Table US.OECD.ESG: Environmental: Fossil Fuel Support by Sector: OECD Member: Annual.

United States' electricity producers paid about 2.75 U.S. dollars per million British thermal unit for natural gas in 2024. Meanwhile, coal power plant operators paid an average of 2.48 U.S. dollars. In the last decade, the price of natural gas used for electricity generation has seen a net decrease, followed by a considerable rise in 2022. Coal, on the other hand, has consistently been among the cheapest fuel types used in the power sector. Natural gas prices and the influence of oil demand As it is often produced alongside oil, prices for natural gas are shaped by overall market developments of the oil and gas industry. When an overproduction of oil led to the oil glut between 2015 and 2016, natural gas prices fell notably. The same circumstance could be observed in 2020 when a fall in oil demand brought many benchmarks such as WTI and Brent to historic lows and also resulted in the Henry Hub price falling to a 21-year low. Apart from petroleum, which is an expensive and inefficient means of power production, fossil fuel costs for electricity generation have declined since 2022. Shift away from conventional energy sources Although renewable technologies were once thought to be very expensive, greater investments have quickly rendered their levelized cost of energy generation on par with fossil fuels, especially when deployed on a utility-scale. The aging coal fleet is a prime example of the increasing necessity to switch to carbon neutral technologies. Older coal plants are dealing with increasing maintenance costs as well as environmental regulations forcing the installation of pollution controls.

United States Fossil Fuel Support by Sector: Residential: USD: 2022 Price: Direct Transfer: Coal data was reported at 0.000 USD mn in 2022. This stayed constant from the previous number of 0.000 USD mn for 2021. United States Fossil Fuel Support by Sector: Residential: USD: 2022 Price: Direct Transfer: Coal data is updated yearly, averaging 0.000 USD mn from Sep 2010 (Median) to 2022, with 13 observations. The data reached an all-time high of 0.000 USD mn in 2022 and a record low of 0.000 USD mn in 2022. United States Fossil Fuel Support by Sector: Residential: USD: 2022 Price: Direct Transfer: Coal data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s United States – Table US.OECD.ESG: Environmental: Fossil Fuel Support by Sector: OECD Member: Annual.

Discussion:

Using two well-known renewable energy transition case studies, potential transformations in the competitive landscape that are typically overlooked in policy design have been identified. Germany’s energy transition journey exemplifies the complexities arising from trying to achieve local industry development targets and high penetration targets, simultaneously, within a tight timeframe. With hindsight, we can say that policy has overlooked the potential competitive pressures that could have arisen from global suppliers, inhibiting the achievement of local goals. Additionally, the German experience demonstrates how underestimating future cost reductions in the supported renewable technology can result in transmuting a reasonable financial incentive to a profligate one, and consequently causing political controversy while trying to agree on policy amendments. Scenario planning and asking ‘what-if’ questions are routes to mitigating the associated uncertainty. Equivalently, policies can be designed with flexibility attached to them to adapt for potential changing market conditions In the US, regardless of the numerous federal and state policy instruments that were devised to support wind energy penetration, the natural gas value chain continued to improve its competitiveness in both the production of fuel and conversion to electric power – the supply cost curve moved downwards, even in the face of flat or growing demand levels. These improvements, which were not competitive reactions to wind industry growth, changed the landscape for all power generating technologies. We can imagine that this progress will continue, even assuming policy driven support for a new technology does not eat into the market share of the incumbent. It will therefore take longer than originally imagined by policy makers for the new entrant to become cost competitive in its own right. The high reliance of wind energy development on incentives for more than 20 years since the introduction of the wind PTC is an example. However, if the new entrant secures so great a penetration that demand for the incumbent begins to decline in absolute terms, the incumbent will move further down the supply curve to a lower marginal cost. This additional consequence of competition will further prolong the need for policy support for the new entrant. The scale and duration of financial commitments by governments are undoubtedly an important aspect of any policy, and the case studies tell us that policy suppleness with respect to the finances can prevent creating political controversy at later stages of policy implementation. Two characteristics of a supple policy are of particular importance; the first is concerned with the ability to reduce or cease financial support dedicated to a specific technology if the technology costs fall for whatever reason. The German case-study (i.e. second blind-spot) reflects the value of this option in the face of technology costs falling faster than anticipated. In the alternative case of renewable technology costs not falling as fast as those of incumbent fossil fuel supply chains, the danger is different. If the aim of policies supporting renewable energy is achieved – absolute reductions in consumption of fossil fuels – an economy may suffer higher energy prices than its competitors relying on fossil fuels. Renewables are only competitive with conventional fuels when their full cycle costs are comparable to the costs rather than the current market prices of fossil fuels. The continuing excess costs of renewables can only be borne by one of three stakeholders: investors (and their lenders), consumers, and taxpayers. There is no magical fourth source of funding. These higher energy costs are locked in once the capacity is installed, because of the high capital, low operating costs of wind and solar electricity. Furthermore, unless investors are coerced, there is a maximum contribution they will make based on their rate of return requirements. This leaves the balance to be shared between taxpayers and consumers, either directly or indirectly.It is not hard to imagine that governments seeking to bolster their economies will succumb to the temptation to reduce the costs of support to their transition strategies. This may cause investors relying upon incentives to fill the cost gap in their economic comparisons of conventional and renewable energy to hold back or require levels of commitment that are politically difficult to provide. At least in the current economic climate, energy prices and taxes appear to exert more influence on an electorate, and thus their political leaders, than an appetite for a clean energy transition.

The potential financial losses to governments stemming from investor-state dispute settlements (ISDS) over cancelled fossil fuel projects could amount to hundreds of billions of U.S. dollars. For example, Mozambique could be forced to pay up to 31 billion U.S. dollars if existing oil and gas projects in that country were blocked by the government. As countries move away from fossil fuel dependence, cancellations of existing oil, gas, and coal projects could lead to great financial burdens on countries should developers decide to sue their governments.

Austria Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Total: Natural Gas data was reported at 0.000 USD mn in 2022. This stayed constant from the previous number of 0.000 USD mn for 2021. Austria Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Total: Natural Gas data is updated yearly, averaging 0.000 USD mn from Dec 2010 (Median) to 2022, with 13 observations. The data reached an all-time high of 0.000 USD mn in 2022 and a record low of 0.000 USD mn in 2022. Austria Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Total: Natural Gas data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Austria – Table AT.OECD.ESG: Environmental: Fossil Fuel Support by Sector: OECD Member: Annual.

Human health costs associated with the air pollution as a result of the combustion fossil fuels represented around 6.6 percent of China's gross domestic product (GDP) as of February 2020. Human health impacts due to air pollution can include lower respiratory infections, diabetes, and other chronic respiratory diseases.

Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Direct Transfer: Natural Gas data was reported at 0.000 USD mn in 2022. This stayed constant from the previous number of 0.000 USD mn for 2021. Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Direct Transfer: Natural Gas data is updated yearly, averaging 0.000 USD mn from Dec 2010 (Median) to 2022, with 13 observations. The data reached an all-time high of 0.000 USD mn in 2022 and a record low of 0.000 USD mn in 2022. Fossil Fuel Support by Sector: Electricity Generation: USD: 2022 Price: Direct Transfer: Natural Gas data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Mexico – Table MX.OECD.ESG: Environmental: Fossil Fuel Support by Sector: OECD Member: Annual.