The rise and fall of energy prices are sometimes a bit like a roller coaster. There are nerve-racking climbs, then dizzying descents, and little jolts from one peak to the next. Between April and September 2020, if you remember, we experienced one of these sharp falls. It was all over the media: electricity and (in particular) natural gas prices had reached new lows. The cause was clearly attributable to the Covid-19 health crisis, but not only that. The mild temperatures over two successive winters combined with sunshine and favourable winds also played a role.
However, the situation does not seem as rosy for our wallets at the start of 2021. Since the end of 2020, gas prices have risen again, and electricity prices have kept pace. How will this inflation affect your finances? What can you do to minimize the effects? To help you take stock, Energyprice.be has analysed the changes in energy prices over the past six months.
Between the end of August 2020 and the end of February 2021, natural gas prices rose by an average of 46% in Belgium*. This meant that the average annual gas bill in Belgium increased from €825 to €1,207.
In addition, when we look at the breakdown by Region, we can see that the proportions are fairly similar, ranging between 40% and 54%:
Despite this alarming increase over the past six months, it is important to put these events into context. Natural gas prices had already fallen significantly in 2019, and this fall only worsened in 2020. So, today’s prices are simply a return to the levels before the health crisis. As proof, compared with February 2020, the gas price has only increased by 15% (in other words, €157). This change over 12 months is still significant, but it is also much less than the change over six months.
After the huge variation in the gas price, this “small” rise in the electricity price is almost a breath of fresh air. Belgian households are seeing only a 12%* rise in their annual electricity bills, with the average bill rising from €814 to €908 between the end of August 2020 and the end of February 2021.
If we examine the breakdown by Region, we soon realize that it is in Brussels and Wallonia that the increase is most noticeable:
As you will see, the electricity market is currently more stable than the gas market. If you look at the change over a year (compared with February 2020), the average annual bill in Belgium has even seen a slight fall of -0.46%. Households in Brussels, in particular, can feel reassured. Even though their prices have seen the strongest inflation in absolute value and in percentage terms, their annual bills remain lower than those of their fellow countrymen in Wallonia and Flanders.
The big question now is whether this rise will be maintained, and, if so, for how long. That will depend on a number of factors, and there appears to be no clear trend for the time being.
For gas, it might be assumed that the cold spell this year will have affected our consumption in terms of heating. As a result, it would not be surprising if prices stayed at a fairly high level for a while. However, there is no guarantee that this will still be the case in a few months.
For electricity, the role of renewable energies is becoming increasingly important. But, given that they rely on the weather conditions, trying to predict trends accurately would be pointless, especially since, in Belgium, the phasing-out of nuclear is bound to have an effect on electricity prices in the long term.
Whether prices are rising or falling, one thing is certain: the only way to pay less for your energy over time is to compare your gas and electricity rates regularly. This is especially true if you have not switched contract for several years, as energy contracts that are more than a year old are sometimes renewed under unfavourable terms (see our article on dormant contracts). However, in the current climate, it is best to avoid paying more than the market average!
Fortunately, today, it is very easy to check your prices and switch contract.
Act now to limit the effects of the price rises on your energy bill, and find a new, cheaper contract!