ACM energy monitors: Filling target of gas storages has been met, high electricity prices during windless summer evenings
Summary
- As a result of geopolitical developments, the natural-gas price was very volatile in the month of June.
- On the electricity market, the prices in June were highly dependent on the weather.
- ACM monitors the developments on the energy markets and keeps a close watch on the prices of energy suppliers.
Over the past month, the filling rate of Dutch gas storages has gone up from 37 percent to 49 percent. This increase means that the filling target of 47 percent on July 1 was met. As a result of geopolitical developments, the natural-gas price was very volatile in June. On the wholesale market for electricity, the warm and windless summer evenings caused substantial price spikes. These are some of the findings in the various energy monitors of the Netherlands Authority for Consumers and Markets (ACM).
Wholesale market for natural gas
At the start of June, the wholesale price for natural gas was approximately 37 euros per MWh, which subsequently went up to over 42 euros per MWh, and later rapidly went down to 33 euros per MWh, which is currently still the approximate price. The volatile natural-gas price in June was, among other things, caused by the conflict between Israel and Iran and the subsequent threat of the closure of the Strait of Hormuz, which is a major shipping route for oil and liquefied natural gas (LNG). Closure of the Strait of Hormuz would, therefore, have consequences for the energy supply and energy prices across the world.
The timely filling of the gas storages is important for the security of the supply during the winter months, when demand for natural gas grows. Well-filled gas storages reduce the dependency on direct natural-gas import during price spikes. The price difference of natural gas between the summer and the winter has increased further, as a result of which it is more attractive for market participants to further fill the gas storages of their own accord. The supply of LNG to the Netherlands remained in full force in June, and is comparable to the record amount that was supplied in May.
Wholesale market for electricity
On the electricity market, the prices in June were highly dependent on the weather. A large supply of green power results in low to negative prices, whereas prices increase substantially with a lack of wind and solar power. Last month, substantial price spikes occurred, caused by a phenomenon called ‘Heißflaute’ (‘heat lull’). This phenomenon occurs as the sun sets during very warm, windless evenings, while demand for electricity remains high, for example, because of the use of air conditioning. On the evening of June 30, this resulted in the hourly price going up to almost 520 euros per MWh. Consumers with dynamic energy contracts can directly see these large price fluctuations on their energy bills. During the price spikes, they pay substantially higher prices for their power. By contrast, they can actually profit from periods with low or negative wholesale prices by consuming electricity during those periods.
Consumer prices
The number of households with dynamic contracts continues to grow at the expense of variable contracts. The number of households with fixed contracts remains stable. As with fixed and variable contracts, ACM sees differences in the ways that dynamic suppliers deal with power from households with solar panels. Some dynamic suppliers charge feed-in costs, whereas others do not, or even reward bonuses for it. Sometimes, suppliers may reward consumers in exchange for smart management of solar panels, whereby the supplier can, for example, remotely switch off the panels during the period that the price is negative. This means that there are options for households with solar panels, and that a thorough comparison between suppliers can pay off.
The Monitor on the consumer energy market revealed that the prices of variable contracts have remained stable compared with the previous month, while the prices for new fixed contracts went up one to three percent.
Significantly higher fees
ACM keeps a close watch on the prices of energy suppliers. ACM looks at, among other aspects, the price differences between suppliers and at the reasons behind those price differences. ACM’s Monitor on the consumer energy market reveals that the prices of the below contracts for households this month are significantly higher than comparable contracts from other suppliers.
| Supplier | Contract type |
| Pure Energie | Fixed 1 year – natural gas |
| Powerpeers | Fixed 1 year – natural gas |
| Kikker energie | Variable - electricity |
| Powerpeers | Variable - electricity |
| Energyhouse | Variable - electricity |
| Kikker Energie | Dynamic – natural gas and electricity |
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 ANWB Energie, EnergyZero, Tibber, Clean Energy, Groenpand, easyEnergy, Nieuwestroom, Energie VanOns, and Gewoon Energie. A model contract is a standard contract with a variable price that can typically be adjusted on January 1 and July 1. Every energy supplier is statutorily required to offer such a model contract, even suppliers that wish to offer dynamic contracts only. The fact that prices of these model contracts are significantly higher says nothing about other contracts offered by these suppliers.