ACM: Energy bills go up, households can save money with better contracts

The energy bills for households are likely to go up further over the next few years. This is one of the conclusions of the Netherlands Authority for Consumers and Markets (ACM) in a paper on the affordability of energy bills for households. This increase is caused by the large increase in transport costs, the expected blending requirement for green natural gas, and the introduction of the European emissions trading system ETS2. Households themselves also have control over the amounts on their energy bills. Switching to better contracts can pay off, with differences of up to 900 euros per year between the most affordable and most expensive contracts. ACM each month publishes the prices of all contracts on offer for electricity and natural gas in the Monitor on the consumer energy market. Starting this month, ACM will also publish an overview of contracts with significantly higher prices.

Manon Leijten, Member of the Board of ACM, adds: “Even though the energy costs are likely to go up over the next few years, consumers can save money by casting a critical eye over their energy contracts. The difference between the most affordable and most expensive contracts can be as much as 900 euros per year. ACM keeps a close watch on the prices of energy suppliers and, moving forward, will publish each month an overview of contracts with significantly higher prices. This will help consumers make well-informed decisions.”

Investments for the energy transition

In order to make sure that the Netherlands becomes less dependent on natural gas from abroad, as well as to make sure that the Netherlands reaches the climate goals, system operators have to make major investments in the electricity grids and natural-gas networks. These investments need to be paid for collectively by all companies and households through the transport tariffs. Previous calculations by ACM reveal that the transport costs for electricity for an average household will go up from approximately 250 euros per year today to 600-800 euros per year in 2050. As a result of the expected blending requirement for green natural gas and the introduction of the European emissions trading system ETS2, households over the next few years may pay approximately 14 euros per month more for the delivery of natural gas. It is still unknown when the blending requirement for green natural gas will come into effect.

The variable production costs for generating power using wind and solar energy are considerably lower than those for generation using natural gas. This has a mitigating effect on future energy bills. Another mitigating effect is the expectation that production and import capacity of liquid natural gas (LNG) will increase over the next few years, as a result of which natural-gas prices may go down. Natural gas is expected to continue to be needed over the next few years for covering periods when there is no wind or solar.

Significantly higher prices of energy contracts

ACM is the energy regulator in the Netherlands. ACM sets the prices for system operators, and enforces compliance with the rules regarding transparency and integrity of the wholesale markets for electricity and natural gas. In addition, ACM conducts oversight over the reasonableness of prices for electricity and natural gas for households and other small-scale users. Energy suppliers are allowed to pass on the costs they incur to their customers, and are also allowed to keep a little extra on top of that. ACM sees to it that this little extra is not too much. In its oversight over the prices of suppliers (external website) (in Dutch), ACM looks at, among other aspects, price differences between suppliers as well as the reasons behind these price differences. ACM’s Monitor on the consumer energy market reveals that the prices of the below contracts for households are significantly higher this month than comparable contracts of other energy suppliers.

_{Source: Monitoron the consumer energy market. This overview did not take into account any discounts and suchlike.}

ACM’s Monitor on the consumer energy market also reveals that several suppliers charge significantly higher prices for their model contracts. This is the case with Scholt Energy, ANWB Energie, Energy Zero, HalloStroom, Zonneplan, Slim met Energie, EasyEnergy, OpenSource Energie, Tibber, and Clean Energy. A model contract is a standard contract with a variable price. Every energy supplier is statutorily required to offer such a model contract, even suppliers that wish to offer dynamic contracts only.