A few weeks ago we published an article in which we provided more information about the energy cap that came into effect on January 1 of this year. Today, Budget Energie (a Dutch energy company and one of our partners), has made history by becoming the first energy company to lower its prices below the government’s energy cap. This means that new customers can immediately benefit from cheaper electricity and gas prices and that’s good news for expats!
The reason for the drop in gas prices is due to several factors. Firstly, the ongoing COVID-19 pandemic has led to a decrease in global demand for energy, resulting in lower prices. Additionally, the increased use of renewable energy sources such as wind and solar power has also contributed to the decrease in prices. The decrease in gas prices is also due to the mild winter weather which led to less demand for natural gas for heating.
The decrease in gas prices is significant, as it has fallen below 60 euros per megawatt hour, the lowest level since September 2021 and more than five times lower than at the peak last summer. As Budget Energie adjusts its rates once a month, this is now beneficial for customers. However, this approach also means that customers may encounter price peaks more quickly if prices rise in the future.
New customers can use the new rates immediately, while existing customers will receive the lower rates in March. Budget Energie will buy energy earlier for these customers. Additionally, customers must be informed 30 days before a rate change. This approach has its advantages and disadvantages. The advantage is that the customers can benefit from the lower prices immediately and the disadvantage is that they may be affected by the price peaks more quickly if the prices rise in the future.
The decrease in energy prices is not only beneficial for the customers but also for the government. The government has a price cap in place to protect consumers from high energy costs. If the energy prices are lower than the government’s price cap, it saves the government a lot of money. If prices go up again, the price cap could potentially cost billions of euros. The government has promised to reimburse the difference between the market price and the price cap if the energy prices exceed the price cap.
However, it is important to note that the decrease in energy prices is not a long-term solution. The prices of fossil fuels such as oil and gas are subject to fluctuation and are likely to increase in the future. Additionally, the increasing use of renewable energy sources such as wind and solar power may also lead to an increase in energy prices. Therefore, it is important for the government to implement policies that encourage the use of renewable energy sources and energy efficiency measures.
In conclusion, Budget Energies decision to lower its prices below the government’s energy cap is a positive step towards providing consumers with more affordable energy prices. However, it is important for the government to implement policies that encourage the use of renewable energy sources and energy efficiency measures to ensure long-term sustainability and affordability of energy prices. It is not yet known whether other energy companies will follow Budget energie.
Check our page about utilities for more information about the Dutch energy market.
