Energy market 3 May 2022 • 5 minutes
Rising energy prices: since the summer, the media have talked of nothing else. The impressive and unprecedented rises could threaten many Belgian households in the coming months, but also risk putting some suppliers out of business. To protect both themselves and consumers, some suppliers have decided to suspend contracts and promotional offers and have introduced various temporary solutions. An overview of the decisions taken by the different suppliers.
While 2020 saw extraordinarily low energy prices due to the coronavirus pandemic and its multiple lockdowns, the recovery in economic activity in 2021 clearly had a negative impact on the electricity and gas sector. It is of course partly because of the greater demand for energy that prices have risen.
But coronavirus is not the only culprit: the reduction of gas storage space in Europe is also thought to be a key factor. With 37% less storage space than in previous years, Europe is now regarded as an importer rather than an exporter of gas, and this exerts natural pressure on gas prices.
To this must be added rising costs of raw materials such as oil or coal which are essential for the production of grey energy, as well as the poor weather conditions in recent weeks, which have led to greater use of electricity and gas.
On the basis of the reference tariffs for September 2021, the CREG (the Commission for Electricity and Gas Regulation) has estimated the increase in annual bills between April 2021 and March 2022. The regulator estimates that the annual electricity bill of a typical household (with an annual consumption of 3,500 kWh per year) will increase by €115.82, while the gas bill for a typical household (with an annual consumption of 23,260 kWh) will increase by €597.92.
To offset this inflation, some suppliers have decided to introduce temporary changes to their deals and cancel promotions or certain contract types. These actions are aimed at protecting suppliers, because the first to feel the effects of the rising energy prices are the suppliers when they buy electricity and gas on the wholesale market. Let’s take a look at the changes introduced by the various suppliers in the market.
In order to prevent consumers from facing monthly instalment payments three times higher than average in the coming months, some suppliers have decided to temporarily stop marketing their fixed price deals. If prices fall in the next few months, this approach will also protect them against a potential loss of customers, given that all consumers are free to terminate their contract whenever they like, without a termination penalty, subject to at least 30 days’ notice.
Since October, the following suppliers have decided to discontinue their fixed price deals:
TotalEnergies initially decided to stop its fixed price contracts, but changed its mind on 5 October. It is therefore once again offering fixed rates for contracts lasting at least one year.
To protect themselves against cost inflation, some suppliers have temporarily stopped promotional offers both for new customers and for those on an existing contract.
In particular, the Liège-based supplier Mega ended reductions on its GROUP deal for all products with the same name on 20 September. Energy giant Luminus, meanwhile, deactivated promotional offers on the Essential, Optimal and Ecoflex residential contracts and on the Benefit, Partner and Ecoflex business contracts on 6 October.
Conversely, Eneco has decided to maintain its promotions and in some cases make them even more competitive. Since 9 October, the usual reductions offered on its Soleil & Vent Flex variable contract have been further improved for both individual and business contracts.
The best advice we can give you right now is to keep an eye on changes in energy prices, especially if your contract is about to expire. If you are in this situation, then in view of rising prices in the energy market the most prudent course is to sign up to a fixed price deal to avoid further price fluctuations.
If you aren’t much of a speculator and don’t keep track of changes in the market, we advise you to compare deals and suppliers. There are several tools you can use to do this:
Did you know? energyprice.be is the first online comparison tool to have been certified by the CREG. In other words, it is an impartial tool that provides precise, relevant and up-to-date information.
Do you need advice about your current contract or a possible change of supplier? You can contact our energy advisers free of charge on 0800 37 369 on Monday to Friday from 9 am to 6 pm.