ACM’s Monitor on the consumer energy market: prices slightly up, number of households with dynamic contracts continues to go up slightly
The prices for electricity and natural gas have slightly gone up this month. This has been one of the conclusions of the Monitor on the consumer energy market of the Netherlands Authority for Consumers and Markets (ACM). The monitor reveals that variable contracts have become, on average, 1.5 percent more expensive. Prices of fixed contracts went up, on average, 1 percent. This increase follows the trends and developments on the wholesale markets for electricity and natural gas. The prices of the various fixed, variable, and dynamic energy contracts vary tremendously. ACM’s monitor also reveals that the number of households with dynamic energy contracts continues to go up slightly. By now, over 5 percent of all households have contracts with dynamic prices.
With dynamic contracts, the prices for electricity and natural gas directly follow the prices on the wholesale markets. Unexpected market circumstances such as a sudden loss of supply of natural gas can directly lead to higher prices. If the supply of natural gas or electricity is high, prices can also easily go down. Customers with dynamic contracts are able to see one day in advance on a website or in an app what they need to pay for electricity and natural gas the next day. This price can vary per hour (for electricity) or per day (for natural gas). Dynamic contracts can be worthwhile for households that have sufficient financial buffers to absorb unexpected price increases, and that are able to adjust their energy consumption patterns, for example by charging an electric car or by temporarily switching off a heat pump.
In addition to the price that suppliers pay on the wholesale markets for natural gas and electricity, dynamic suppliers charge an amount of fixed costs and a surcharge per m3 of natural gas and per kWh of electricity. ACM’s monitor also reveals that there are substantial differences between the costs of different dynamic suppliers. For an average household with a consumption of 1,160 m3 of natural gas and 3,140 kWh of electricity, this difference can be as high as several hundreds of euros per year. As with fixed or variable contracts, customers with dynamic contracts must pay VAT and energy taxes. ACM finds it important that all energy suppliers are clear about what the total price is that customers must pay, so that customers are able to properly compare different contracts from different suppliers.
There are now 32 suppliers that offer consumers dynamic contracts. And there are more and more larger suppliers that offer dynamic contracts. The number of providers of dynamic contracts is likely to continue to grow because, under the new Dutch Energy Act, large suppliers will be required to offer dynamic contracts as well.