Dutch households that conclude an electricity contract in December save several hundred euros on an annual basis compared to households that concluded such a contract a year ago. The price of electricity has not been much lower in the past two years.
According to Martien Visser, professor of Energy Transition at Hanze University of Applied Sciences, the extremely high electricity prices of the past two years are now behind us. “The electricity price is always in line with the gas prices, and they have fallen enormously. You notice this not only at home, but also at the cash register, because producers passed on the high energy prices and that was part of the high inflation. Now inflation has fallen sharply,” says Visser.
Visser looks at the wholesale prices, which is the amount paid for electricity on the trading market. A year ago that was approximately 25 euro cents per kilowatt hour, now it is 10 cents per kilowatt hour. People who want to sign a new contract now will pay significantly less than those who did so in December 2021 or 2022, Visser explains. Energy expert Joris Kerkhof from comparison site Independer confirms this. “In March and April 2022, just after the outbreak of the war in Ukraine, there were not even contracts. The rates that new customers are now offered are much more attractive than in recent times.”
Independer also compares consumer prices, which also include VAT and energy tax. This is now an average of 30 cents per kilowatt hour, compared to 66 cents a year ago. At its peak in September last year, the electricity price was even 1 euro for a short time. That was an ‘extreme price spike’, experts say, due to panic on the gas market.
With a consumption of 3000 kWh you save ‘several hundreds of euros’ on an annual basis. But, says Visser: “Having the price of electricity does not mean halving your bill, because a large part of the bill consists of energy tax and the network rate.” For households with solar panels, the effect is ‘nil’ thanks to netting, says Visser. “If they generate just enough for their own consumption. It is even negative if they supply net electricity.”
The fact that we no longer have to pay the top price for energy is because the market has entered calmer waters, Visser explains. “In December 2021, even before the invasion of Ukraine, Russia supplied much less gas to Europe. Then came the war, culminating in the panic surrounding the blowing up of the Nordstream 1 gas pipeline in August 2022. Now the gas price is quite low and there is little demand, partly because it is not very cold.” But, Visser warns, although extreme prices will probably not occur again anytime soon, the situation is still ‘critical’. “Small deviations can have a big effect. For example, gas supplies are good now, but if it gets significantly colder, that will change and the price will increase again.”
By the way, Kerkhof emphasizes, some things will change as of January 1. For example, the gas tax increases considerably (from 59 cents per cubic meter to more than 70 cents), but the electricity tax decreases from 15 to 13 cents per kWh. In addition, the fixed amount that you receive annually in energy tax increases from 596.86 to 631.35 euros. The price ceiling will also expire in 2024. What that means for your monthly energy bill, you can read here.
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