ACM’s Monitor on the consumer energy market: today’s natural-gas is now close to the 2023 price-cap price

Over the past month, the price of natural gas on the Dutch wholesale market for natural gas (TTF) has increased from around 30 euros per MWh (before the Iran war) to 44 euros per MWh today, with a peak of 74 euros per MWh on March 19. The geopolitical situation causes prices to be highly volatile. Since the announcement of the ceasefire in the Middle East, natural-gas prices on the wholesale market have gone down, although they are still well above pre-war levels. The prices that households must pay follow the trends on the wholesale market. ACM’s Monitor on the consumer energy market reveals that the prices for natural gas with a fixed contract for one year went up 27 percent last month, to 1.57 euros per m3. The maximum natural-gas price of the price cap in 2023 was 1.45 euros per m3 (adjusted for inflation, this would be approximately 1.59 euros in 2026). If it signed a one-year contract in April, an average household that consumes 800 m3 of natural gas and 2,550 kWh of electricity would pay almost 400 euros more per year, compared with one-year contracts signed in March.

Over the past month, prices for variable contracts have remained more or less stable. That is because it takes longer for price increases to have an effect on variable contracts, and suppliers are required to announce price changes to existing variable contracts at least 30 days in advance. ACM expects that the prices for variable contracts that can be changed during the contract period will therefore go up in the coming month.

Of all households in the Netherlands, 33 percent have contracts with an initial contract period of more than one year, 21 percent have fixed contracts with an initial contract period of one year, 39 percent have variable contracts, and seven percent have dynamic contracts. Whether and when households will notice the price increases in their pocketbooks depends on the type of contract, the remaining contract period (if any), and the international developments that cause the high prices.

Overview of energy prices in recent years

The trend of the natural-gas price has been strongly influenced by the increase in taxes on natural gas, from 0.44 euros in 2022 to 0.73 euros per m3 in 2026. On the other hand, the taxes on electricity went down, following a one-time reduction in 2022 to 0.04 euros per kWh, from 0.15 euros in 2023 to 0.11 euros in 2026.

Saving energy (for example through home insulation, investments in sustainability measures, as well as through self-generation of electricity using solar panels) helps in lowering energy bills, as well as in making households less sensitive to price increases. Since the 2022/2023 energy crisis, households in the Netherlands have reduced their natural-gas consumptions by, on average, about one-third. In that period, the average electricity consumption remained relatively stable. In 2023/2024 (combined), the average purchasing power of households went up 4.2% compared with 2022.

Affordability for vulnerable households

Not all households are able to save energy (or save more energy), especially in the short term. The affordability of energy for vulnerable households has been under pressure for quite some time. The situation in the Middle East exacerbates this. That is why it is sensible that the Dutch cabinet has begun preparing targeted measures to prevent vulnerable households from getting in financial problems due to high energy prices. With targeted support for vulnerable households, the incentives for other households to insulate their homes and to save energy can remain in place. This is not the case with a general price-compensation measure, such as a price cap for all households. ACM has already worked out various policy options for tackling energy poverty in vulnerable households in 2024:

• ACM: fair competition is no guarantee for affordable energy for everyone | ACM

Manon Leijten, Member of the Board of ACM, explains: “ACM’s Monitor on the consumer energy market reveals that prices for natural gas and electricity have gone up over the past month. The group that is currently directly affected by high energy prices in their energy contracts is still relatively small. However, we don’t know how the conflict in the Middle East will develop, and how the prices will evolve over the next few months. The increased energy prices are already causing a great deal of uncertainty and concern. That’s why it’s good that the cabinet is exploring what targeted measures can be taken in order to prevent vulnerable households from dropping further below the poverty line.”

Contracts on offer

ACM’s Monitor on the consumer energy market reveals that consumers are currently able to choose from a wide range of different contracts. 27 suppliers are offering fixed contracts, 30 suppliers are offering variable contracts, and 30 suppliers are offering dynamic contracts. Last month, some suppliers temporarily stopped offering fixed contracts. ACM contacted these suppliers about this, and now sees that they are offering fixed contracts once again. Energy suppliers are also required to offer at least two types of model contracts: a model contract where the price can be adjusted four times a year, and a model contract with a fixed price for one year.

Trends on wholesale markets

ACM’s Monitor on the consumer energy market reveals that, initially, the price increases on the wholesale markets were mostly limited to natural gas with delivery within one year. Subsequently, prices for delivery periods after that also went up. This shows that market participants increasingly anticipate that the problems with the supply of liquefied natural gas from the Middle East will continue for a longer period of time. The high prices are not only caused by the closure of the Strait of Hormuz, but also by attacks on production facilities of liquefied natural gas in the Persian Gulf. It could take years for these production facilities to be fully rebuilt, so an end to the war and a reopening of the Strait of Hormuz does not mean that the supply of liquefied natural gas will be fully restored straight away. At the moment, market participants do not have any strong price incentives to fill the natural-gas storages. The supply of LNG to the Netherlands remains stable at the moment.

Monitor on fuel prices

Due to the unrest on the energy market, ACM has decided to expand its monitoring with a monitor on fuel prices that households and businesses pay at the pump. With this monitor, ACM keeps a close watch on market developments in the fuel chain, and, in that context, looks at retail prices and purchase prices. ACM expects to be able to publish its preliminary findings within three to four weeks.

Significantly higher prices for natural gas and electricity

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.

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 Tibber, EP Commodities, EnergyZero, Greenchoice, Zonneplan Energie and Vrijopnaam. A model contract is a standard contract that every energy supplier is statutorily required to offer. That is also the case with suppliers that wish to offer dynamic contracts only. The fact that prices of these model contracts are significantly higher says nothing about the prices of other contracts offered by these suppliers.

See also:

• 04-04-2024ACM: fair competition is no guarantee for affordable energy for everyone | ACM
• Monitor on the consumer energy market (in Dutch) (external website)
• Monitor on wholesale prices and the security of supply of natural gas (in Dutch) (external website)
• Monitor on wholesale prices electricity (in Dutch) (external website)