How much do you pay annually for your electricity or gas? Do you think you could get a better price? If the answer is no, there’s a 50% chance that you have taken out one of the 10 most expensive energy contracts on the market.


Summary:


In January 2021, the CREG published its report on the portfolio of supplier products. This highlighted an astonishing statistic: across the country, almost 50% of households have one of the 10 most expensive energy contracts on the market.

But why do so many Belgian consumers choose these onerous contracts? Is it really a choice or is it, in fact, a lack of knowledge about the energy market? Let’s analyse the situation.

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Five suppliers hold sway in Belgium… and not necessarily the cheapest ones

Whether you’re in the north, the south, or the centre of the country, it is the same suppliers (or almost the same) that dominate the market: ENGIE (formerly Electrabel), Luminus, Lampiris, Eneco and Essent (recently absorbed by Luminus). One thing is certain: you know them all, by name at least. However, did you know that, on average, these suppliers do not offer the cheapest price plans? This can easily be seen by looking these graphs published by the CREG. The size of the circles represents the market share of a supplier, while the figure in the centre indicates the weighted average price of its products.


Wallonia

Flanders

Brussels


It can be seen at a glance that the suppliers with the largest market share are also the most expensive! Essent, Luminus and Eneco, in particular, are predominant in the regions in which they are present.

Astonishing fact: the most expensive products dominate the market

Although the five main suppliers do have some reasonably-priced contracts in their product portfolios, they mainly offer a large number of expensive products. These are the products that steal the limelight, cornering almost 50% of the market for both electricity and gas.

So, for electricity, 2.23 million Belgian households have the 10 most expensive contracts. For natural gas, 1.19 million households are affected.

Electricity – market share for the 10 most expensive products

As a percentageIn terms of number of households
Wallonia57%821,392
Flanders45%1,177,387
Brussels*49%235,946

Natural gas – market share for the 10 most expensive products

As a percentageIn terms of number of households
Wallonia55%312,230
Flanders40%713,434
Brussels*50%166,174

*Note: given the limited size of the Brussels market, the CREG study only looked at the five most expensive products (and the five cheapest) in this Region. In Wallonia and in Flanders, the study covers the 10 most expensive products (and the 10 cheapest).

Fewer than one in ten households choose the cheapest contracts.

By comparison, only 5% to 8% of Belgian households opt for one of the 10 cheapest energy contracts (268,000 households for electricity and 172,000 households for gas).


Electricity – market share for the 10 cheapest products

As a percentageIn terms of number of households
Wallonia5%70,106
Flanders6%168,284
Brussels*6%29,856

Natural gas – market share for the 10 cheapest products

As a percentageIn terms of number of households
Wallonia7%39,869
Flanders6%105,979
Brussels*8%25,961

In the affordable product arena, the supplier Mega appears to be wiping the floor with its competitors. In the three Regions, for both gas and electricity, one of the Mega products is almost always the least expensive alternative on the market. It is only really in Flanders that Essent manages to offer a more competitive gas contract than the Mega product.

However, it’s worth remembering that the CREG study does not take into account the temporary promotions that suppliers offer to their new customers. It is not uncommon to see even cheaper promotional deals from one of the “big 5” or from another, smaller supplier. To find out whether Mega really is the cheapest supplier at any given time, you need to use a price comparison site that takes account of these promotions.

Which energy supplier suits you best? Find it out with a simulation!

Potential savings could be as high as €1,194

Where there is a disparity between energy contract prices, this means that there are potentially significant savings to be made for consumers who have an expensive contract. Here are the annual savings that a household in each Region could achieve by choosing the cheapest contract.

Potential savings for electricity:

  • In Wallonia: €330 (minimum €240 for 350,000 households)
  • In Flanders: €340 (minimum €240 for 600,000 households)
  • In Brussels: €329 (minimum €230 for 200,000 households)

Potential savings for gas:

  • In Wallonia: €864 (minimum €300 for 350,000 households)
  • In Flanders: €824 (minimum €390 for 60,000 households)
  • In Brussels: €824 (minimum €320 for 175,000 households)

As a result, a Walloon consumer who has the most expensive gas and electricity contracts could save €1,194 by changing contract!

Note that you do not necessarily need to change supplier to enjoy significant savings. Sometimes, changing contract with the same supplier is all you need to do to enjoy much cheaper rates.

How can the behaviour of Belgian consumers be explained?

With such significant savings possible, the question is: why are there so many Belgian consumers on such unfavourable energy contracts? One answer is undoubtedly a lack of knowledge about the energy market. But that’s not the only factor: the suppliers are also partly to blame.

1. Dormant extension contracts

Year after year, the CREG continues its crusade against dormant extension contracts. Although consumers are becoming increasingly active, the number of dormant contracts in circulation remains high: in 2020, there were 470,000 contracts of this type.

As a reminder, these relate to contracts that are automatically renewed for products that are no longer actively offered by the supplier. They are often more expensive than the market average.

These products clearly lack transparency, since they do not appear among the supplier’s “official” deals. Often, consumers will agree to renew such contracts because they are not aware that they are more expensive than the active products. For this reason, the CREG feels that these dormant contracts should be withdrawn permanently.

In addition, households could save a considerable sum each year by choosing a different contract. For electricity, for example, consumers in Wallonia could save €320, those in Flanders €324, and those in Brussels €314. For gas, the total possible savings in the three regions is the same: €824!

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2. Lack of knowledge about the energy market: ill-informed consumers?

The liberalization of the energy sector is slowly approaching its 15th anniversary. However, many Belgian households still have limited knowledge of the liberalized market and the benefits they could derive from it. Some are even worried about the idea of changing contract as they think the administrative process is complicated. In reality, this is not the case. Remember that measures were implemented several years ago to make it as easy as possible for consumers to change contract:

Cancellation procedures are no longer necessary.

To change your contract, you simply need to sign up for a new one, then provide your meter reading when the change takes place. That’s all there is to it. For everything else, it’s the energy suppliers who have to collaborate behind the scenes to complete the administrative paperwork.

You can change contract at any time, without a termination fee.

It makes no difference whether you have signed a one-year contract or a three-year contract. You are free to change contract or supplier whenever you like.

You can check your rates at any time using your Region’s comparison site.

All suppliers must mention on their bills that you can compare your prices using the comparison tool provided by one of the country’s regulators (CREG, CWaPE, VREG or Brugel). This means that you can check the up-to-date rates offered by the energy suppliers at any time.

To take account of promotions as well and switch contracts immediately, you can also use an approved comparison site, such as Energyprice.be.

>> Compare prices

3. Belgian consumers are loyal

In many cases, it is not so much the lack of market knowledge that is the problem, but rather the fear of the unknown. Belgian consumers tend to be loyal by nature. They do not like changing their habits and they are wary of the unknown. Is the new energy supplier reliable? Why should I change supplier when I’m satisfied with the one I have? These are all barriers to change that are imposed by the consumers themselves. However, with more than €800 of potential savings to be made, is it still worth remaining loyal to a supplier? And is their high price justified or justifiable?

4. A question not only of price but also of quality of service

For many consumers, the choice of energy supplier is based on the quality of customer service or the little extras they can enjoy (boiler maintenance, smart thermostat, etc.). Others prefer to choose a cooperative, so that they can remain true to their societal values.

>> Find out about all the green suppliers in Belgium

Lastly, it’s useful to note that the cheapest contracts often have certain restrictions. The customer service tends to be reduced to the bare minimum, for instance.

As a result, many households do not make the lowest price their top priority. They have qualitative criteria, and are willing to pay a bit more to take advantage of these. For this reason, it is essential that price comparison sites include these types of criteria as well. Energyprice.be totally understands this and so allows you to adjust your comparison according to specific qualitative criteria: choice of billing, choice of pricing, green energy supply, and many other options besides.

>> Compare prices based on my criteria

What are the solutions for households?

The CREG recommends implementing a series of initiatives, such as:

  • Withdrawing dormant contracts;
  • Including a QR code in the supplier communications so that customers can access the terms of their contract with a simple scan;
  • Actions at local level so that consumers are better informed about their energy contracts.

1. Wake up and compare

In addition to this, customer awareness is also needed. In this regard, the first thing you need to do is to be aware of your situation: are you paying more for your gas or electricity than the market average, and why? The CREG tool CREG Scan is ideal for this. When you choose your contract from the list of products, you will instantly see how your price compares with the cheapest and the most expensive products of the same type.

2. Find a more suitable deal

Next, you need to review your rate to see if it is actually very high. Given your requirements, is it sensible to keep this contract? Are there other contracts with more favourable terms, either with other suppliers or with your current supplier? To find out, it’s best to use a comparison site that takes account of supplier promotions, such as Energyprice.be. You can then refine your comparison based on other criteria, such as the type of price (fixed or variable) or the preferred payment method (direct debit or bank transfer).

>> Read also: Energyprice.be and CREG Scan: two essential tools to help you choose the best energy contract

3. Switch contract to stop unnecessary expenditure

It’s then up to you to decide whether you want to switch contract right away on the price comparison site! It’s quite natural to take your time to decide whether to change contract. However, if you want to stop paying unnecessary costs without further ado, don’t let the situation drag on before taking the plunge!

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What if you don’t feel sufficiently well-informed to take these steps by yourself? Our advisers are here to help you! Call us free on 0800 37 369 and our team will help you review your energy budget so that you can optimise it!

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Source: CREG

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