Saturday 03 December 2022

What is the energy price cap? And how to keep your bill low

Photo: Depositphotos.com

The Dutch government is planning to introduce a price cap on energy bills to offset the surge in prices. But what does the price cap mean for individual households? And more importantly, what else can you do to keep your bill as low as possible?

Although the details still have to be finalised, and MPs want the plan to be made broader, the energy price cap basically means:

  • A maximum price for electricity of €0.70 per kilowatt-hour (kWh) up to a certain limit, probably 2,400 kWh per year
  • A maximum price for gas of € 1.50 per cubic metre up to 1,200 m3 per year.

The indicated price levels are flexible and may be adjusted at a later stage, depending on the wholesale prices for energy.

The price cap will come into effect in November 2022 and is guaranteed until the end of 2023. Full details about how the energy price cap works can be found here.

Who will the price cap apply to?

The price cap applies to all private homes, both rental and owner-occupied – and may be extended to cover schools and small firms, if the cabinet agrees.

However, it is important to point out that the price cap only applies to the average household consumption and if you use more gas and electricity, you will pay the market price that is set within your energy contract.

So, how much are you likely to end up paying?

‘That depends tremendously on your year power consumption,’ says Koen Kuijper of Energievergelijk.nl. ‘The average household will have a maximum monthly energy bill of €294, which is still a lot of money, but cheaper than it could have been.’

However, the limits that are built into the price cap mean that a lot of homes will still have to pay market prices for a large part of their usage. People living in large houses, or ones which are badly insulated, and people who have a heat pump which is driven by electricity are among those who will still face very high bills.

MPs have voted to change this, and widen the criteria so that people with heat pumps, for example, are not penalised. But that has not yet been decided.

How do I minimise my energy bill?

Energievergelijk.nl, a website to compare energy providers (in Dutch: energie vergelijken), has some ideas to cut down on your gas and electricity usage.

Some of them require lifestyle changes – who wants to shower for a couple of minutes rather than take a bath? –  but they will help you save money.

Balance your energy consumption
Newly built houses have zero or almost no gas consumption and use a heat pump or city heating systems. Nor are they connected to the gas grid.

But, and however crazy this may sound, if you have moved away from gas yourself, you could save money by going back to it – at least for cooking – if possible. This will lower your electricity usage and help you profit more from the price cap.

Lower your gas usage

Are you using much more than 1,200 m3 of gas per year? Then you can take some simple steps to cut down. A few things could do the trick, like:

  • Switching to a solar water heater
  • Using radiator foil behind all all your radiators
  • Closing seams and cracks around and in your house
  • Replace your central heating boiler if it is old and inefficient
  • Having your central heating system serviced
  • Turning off radiators in rooms you are not using

And extra tip for people working at home: use infrared heating in your home office. It makes no sense to heat the entire space since you are sitting at a desk most of the time.

Switch to another energy provider

The final thing you can do is to change your contract, by switching to another energy supplier.

Gas and electricity prices vary significantly. If your fixed-price contract is ended, there is a big chance that your current tariff exceeds some of the tariffs offered online. Make sure you check the variable electricity and gas prices in your current contract and compare these to the prices on offer.

Compare Dutch energy providers here

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