ACM’s Monitor on the consumer energy market: natural-gas price at its highest level in over three years, electricity has also become more expensive
Summary
- The natural-gas price on the wholesale market went up substantially last month.
- The increasing natural-gas prices also push up prices on the electricity market.
- ACM recommends consumers to check whether their energy contracts still meet their needs before the start of the heating season.
The natural-gas price on the wholesale market went up substantially last month. While the price was around 58 euros per MWh in early August, it currently stands at approximately 80 euros per MWh. As such, the natural-gas price has reached its highest level in over three years, and is more than twice as high as it had been before the war in Iran broke out. The price on the wholesale market for the supply of natural gas in several months from now is high, too. This means that traders do not expect prices to go down quickly in the foreseeable future. The increasing natural-gas prices also push up prices on the electricity market. Electricity prices for supply in 2027 are now more than 60 percent higher than before the war. These are some of the conclusions of the Monitor on the consumer energy market of the Netherlands Authority for Consumers and Markets (ACM).
The prices that households must pay follow the rates on the wholesale market. ACM’s Monitor on the consumer energy market reveals that the prices for fixed natural-gas contracts on offer went up approximately four percent last month. As such, the consumer price for new contracts is now at its highest level of the past three years. Since a large share of electricity is generated in natural-gas-fired power plants, the price of electricity rises along with the price of natural gas. The prices for fixed electricity contracts have gone up approximately 1.5 percent compared with last month.
Manon Leijten, Member of the Board of ACM, explains: “Many households will turn their heating back on in October, and will therefore start consuming more natural gas again. That’s why September is traditionally a good month to check whether your energy contract still best suits your personal situation. Due to the relatively low filling rates, the uncertainties on the international markets, and the volatile natural-gas prices, it’s even more important that you do so this year.”
The filling rate of natural-gas storages
The Dutch natural-gas storages are currently filled to 52 percent. This is significantly lower than on the same date last year, when the filling rate was 69 percent. The European natural-gas storages are, on average, filled to 68 percent. This is also significantly lower than last year, when the average filling rate was 77 percent.
Check your energy contract
The Monitor on the consumer energy market reveals that a wide range of different contracts is available. What type of contract suits best depends on personal situations and preferences. With fixed contracts, rates are fixed for an agreed-upon time period. This provides certainty about the rates, but consumers do not benefit from any price drops on the market during that time period. With variable contracts, rates usually change four times a year, and can go up and down. With dynamic contracts, rates follow prices on the wholesale market, and vary every fifteen minutes or every day. As a result, consumers immediately bear the risk of sudden price increases, but they also benefit immediately when energy prices are low, for example, when a lot of electricity is available from solar panels or wind turbines.
Financial oversight over energy suppliers
Energy suppliers must purchase the natural gas and electricity they have sold to households and businesses with fixed or variable contracts for the duration of the contract. ACM monitors this, and also uses stress tests to check whether energy suppliers are able to absorb sudden price shocks. ACM tightened this oversight at the start of the war in Iran. Checks revealed that the turmoil on the energy markets had not yet led to financial problems for energy suppliers.
In these checks, ACM assessed the liquidity position and purchasing strategy of suppliers to see whether they are able to withstand periods of financial stress, and thereby continue to fulfill their obligations to consumers and businesses with small connections. As these checks are a snapshot, ACM will conduct new checks on all suppliers at the start of the heating season in October. If ACM has any concerns about a supplier’s financial position or identifies any shortcomings, it will conduct further investigations into this, and can take enforcement action where necessary. ACM’s tightened oversight reduces the likelihood of suppliers facing problems due to sudden price shocks on the energy market. However, oversight can never completely prevent financial problems for suppliers.
Significantly higher rates
ACM keeps a close watch on the prices of energy suppliers. As part of this oversight, ACM looks at, among other aspects, price differences between suppliers as well as the reasons for these differences. ACM’s Monitor on the consumer energy market reveals that the prices of certain contracts for households this month are significantly higher than comparable contracts from other suppliers.
| Supplier | Contract type |
| Van Helder | Fixed natural gas for one year |
| Ventum | Variable electricity |
ACM’s Monitor on the consumer energy market also reveals that ANWB energie charges significantly higher prices for their model contracts. A model contract is a standard contract that every energy supplier is statutorily required to offer, including suppliers that wish to offer only dynamic contracts. The fact that prices of these model contracts are significantly higher says nothing about the prices of other contracts offered by these suppliers.
