understand the soaring gas and electricity prices in 6 questions

In recent months, gas prices have been increasing. Yes unions and consumers are worried As for the impact of this price increase on the bill, several questions remain open as to this price hike. We have tried to answer them.

1. Why are prices increasing?

To fully understand the rise in prices, we must first take stock of the economic context, both in Belgium and abroad.

Stéphane Bocqué, director of communication at the Belgian Federation of Electricity and Gas Companies (FEBEG), explained this morning on La Première “that it is not a a specifically Belgian phenomenon, but rather a phenomenon of global inflation at the energy level. ” In question, a “Very significant post-Covid economic recovery in the world, which is increasing energy consumption everywhere”.

“All energies (gas, oil, coal), he explains, are on the rise, and so are commodities. This is due to the economic recovery but also to great competition between continents to appropriate energy reserves and, among other things, gas. Asia is particularly gas-hungry at the moment. ”

The increased demand from Asia has led to a decrease in the supply of natural gas to Europe and hence to the rise in prices, according to a note of the Belgian Commission for Electricity and Gas Regulation (CREG).

More generally, the demand for gas in Europe is higher compared to other years, while the “storage levels remain below usual levels”, further details the CREG. Also add that summer is the time for maintenance work on gas installations and that a few incidents have occurred: now the gas supply is decreasing.

A final factor also comes into play: “Ultimately, the coal will disappear of the energy mix and will be replaced by gas, which is significantly less carbon-intensive. Everyone is simultaneously throwing themselves on gas, and this leads to very significant price inflation “, adds Stéphane Bocqué.

When it comes to electricity, post-Covid recovery plays a role. In addition to this, the regulator also emphasizes “a low production of electricity from wind power in recent months due to weather conditions, various maintenance work at the power plants and an increase in the production of electricity from natural gas and coal in a context of increase in gas, coal and CO2 prices. “

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2. What impact on the Belgian bill?

At the Belgian level, it is the cost of living that has increased: in August, inflation was at levels 2.73% for the month of August, a price increase that Belgium has not experienced for ten years. The price of natural gas has increased by nearly 50% compared to 2020, as has that of electricity (+ 17%) and fuel (+ 15%)..

However, the CREG once again points out, the price displayed on our invoices is made up of several elements: the cost of energy, transport and distribution costs, taxes or various levies. The surge in prices is only impacting this “cost of energy” component. This part represents about 30% of an electricity bill and almost 50% of a natural gas bill.

Concretely, the regulator has calculated that an average household will spend 1000 euros per year on electricity and 1600 euros per year on gas and these prices could increase further. According to an example of calculation carried out within our editorial staff, the gas and electricity bill between September 2020 and September 2021 increases by 657 euros for a household made up of two children and two adults.

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Jérémy Wolf, operational director of Wikipower, which offers group purchases of energy and sustainable solutions, believes “that we have never known such high prices on the markets”. Its cost forecasts compared to September 2020 are more pessimistic: “We have an increase of around 800 euros for a household that consumes gas and electricity, with average consumption which is perhaps a little lower than the standards recommended by the CREG, but which are still quite high. a household that consumes 3,500 kilowatt-hours of electricity and 17,500 kilowatt-hours of gas, there is going to be an increase of 800 euros annually on its bill. “

3. Where does the natural gas used in Belgium come from?

It will be understood: the price of energy depends on international and Belgian economic factors. When we look beyond our borders, things change. For example, Russia has just completed its Nord Stream 2 gas pipeline. Would she have turned off the tap to appear a bit like the great savior with this pipeline?

“It must be emphasized that Russia is one supplier to Europe among others. An important supplier, of course, but there are other aspects as well, Stéphane Bocqué nuance. For example, in Norway, there are platforms that are in maintenance operation, and which says maintenance, says no production, and therefore a reduction in supply to Europe. All of these are creating a kind of perfect storm on the gas industry in Europe and around the world. “

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Nevertheless, enlighten the CREG, the natural gas used in Belgium only arrives to a lesser extent from Russia and Great Britain. “Natural gas is mainly imported from Norway, the Netherlands and Qatar”, details the regulator. In its liquefied form, it notably passes through Zeebrugge and comes from Qatar.

Buying in international markets, suppliers “have relatively little influence on the evolution of these prices”, adds Stéphane Bocqué.

4. Is there a risk of a shortage as winter approaches?

Between soaring prices and hard on gas, many fear shortages, as winter approaches. However, according to Stéphane Bocqué, gas cuts would be “unpublished”.

“I don’t have a crystal ball, but the storage levels are currently around 60% at the European level, whereas they should be at 80%. It also contributes to the fact that there is a strong ask because they have to be filled in, he explains. For example, in Belgium, to my knowledge, a month ago the storage level was very close to 80%. The term shortage therefore strikes me as a bit of an exaggeration. “

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In terms of security of supply, he believes that “should not encounter any major problems. In terms of price, we will especially have to see how the winter unfolds. A cold winter will contribute to the price increase. If we have a rather mild winter, it will be the opposite. It’s like that every year. “

Although it is impossible to exclude it completely at this stage, the shortage still seems unlikely.

5. What are the right things to do to save money?

Attention to consumption and costs is at the center of consumer concerns. The CREG was already giving a series of advice in August, summarized here by our editorial staff. For the rest, Jérémy Wolf of Wikipower, emphasizes two aspects: the first concerns the type of pricing, fixed or variable.

“If we are on a fixed price contract, a priori, no problem, but I say it with a grain of salt. Then, we have to look at a second aspect, which is to know what is the duration of the contract. it will be renewed soon, unfortunately, it will be necessary to look at price comparators or to opt for a group purchase. Wikipower offers both. Since he has no choice, the consumer will have to renew his contract, and there is no miracle in terms of current prices, he will pay more. “

►►► To read also: Households with variable contracts risk seeing their gas and electricity bills go up

According to his estimates, comparators save between 100 and 150 euros for electricity. For electricity and gas, you can get up to 300 or 350 euros.

For Jérémy Wolf, this requires in particular aeducating people to decipher their bills, to be able to compare them correctly and to check what rate they pay per kilowatt hour, and above all to have the reflex to challenge one’s supplier, whether by changing contracts with the same supplier or with another. “

Beyond these calculations, the two experts also advise limiting your energy consumption through a series of simpler actions, such as better adjusting the thermostat, for example. “But it is also necessary that the suppliers offer solutions which make it possible to structurally reduce energy consumption, such as self-production solutions, solar panels, renovation of heating systems. Suppliers are less and less sellers of KW and more and more providers of sustainable solutions.

6. What solutions do the public authorities propose?

For the moment, political proposals abound. This September 13, Energy Minister Tinne Van der Straeten (Groen) suggested extending the social tariff for one million households. This measure allows people with low incomes who need to be content with the integration income to benefit from the lowest prices on the market. This tariff had been extended by the federal government at the end of 2020, but it is supposed stop at the end of the year.

On the socialist side, Vooruit and the PS believe that it is a good idea, but the PS wish to go further and advances the hypothesis of a flat-rate discount. The idea has long been dear to French-speaking socialists: during his tenure as Minister of Energy, Paul Magnette introduced in 2009 a reduction of 30 euros for individuals. The Socialists are also said to be in favor of a freeze on energy prices.

Another avenue is to reduce VAT from 21% to 6%. This solution was however abandoned by virtue of the government agreement which did not devote any space to it. The idea is however still advocated by several associations and unions. As for its viability and effectiveness, Stéphane Bocqué believes that if such a measure were to be adopted, it would have to be marked out by very clear conditions. For him, however, the real message to consumers is more responsible consumption.

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