Fixed, variable or dynamic? Energy customers dubious now that autumn is approaching

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Although it will still be quite late summer this week, not everyone will be reassured about it with autumn just around the corner. Do I adjust my energy contract, or do I trust that I will financially survive a cold winter if energy prices unexpectedly go up again?

People have a choice of fixed, variable, and ‘dynamic’ contracts, with the latter two being the most risky. “If you get nervous about fluctuating prices, it is wise to simply fix your rate for a few years. Then you know where you stand,” says energy economist Hans van Cleef of the Public Affairs consultancy.

Five questions:

1. What about gas supplies for this winter?

Quite better than a year ago. At that time the stock was 84.6 percent full. It is now almost full at 95.3 percent. In addition, with approximately 500 gigawatt hours, we use about a quarter less gas than in recent years. Compared to a year ago, the situation for consumers and businesses is a night and day difference.

Due to Russia closing the gas tap, people paid the main price for a new energy contract in August 2022. Prices have now returned to a relatively normal level, albeit still two or three times as high as before the energy crisis.

Nieuwsuur investigated what the gas price will do this winter:

What will gas prices do this winter?

2. So nothing more going on?

You absolutely cannot say that. “The situation is different from a year ago, but not necessarily less worrying,” says energy economist Van Cleef. “It is true that stocks are well stocked, nuclear power stations remain open longer, coal-fired power stations remain available and there is more renewable energy. But we continue to make do with less Russian gas. Europe is constantly in competition with China and India for energy. When it gets really cold in Europe or Asia and in the worst case both, then prices will go up fast. That is really underestimated.”

3. Last year you were screwed with an expiring energy contract. Is that also the case now?

That situation is also completely different. “There is something to choose from again”, Minister Jetten for Climate and Energy previously told NOS when energy companies started offering fixed energy contracts for one or three years again. In particular, he encouraged consumers to take a good look at their energy contract with a view to winter and to “make a conscious choice”.

Many households now have a variable energy contract, because energy companies no longer dared to offer fixed energy contracts due to the large price fluctuations.

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4. Wouldn’t it be better to fix the energy bill?

Energy giants such as Eneco and Vattenfall say they do not want to give advice on this. They refuse because the situation is different for every household. “Think of matters such as financial situation, type of home, family composition, et cetera,” emphasizes Eneco.

“Do what you feel comfortable with,” says advisor Van Cleef. “I always compare it with the mortgage interest rate. There you have people with monthly fixed rates of up to thirty years. It is no different with energy. If you get nervous about fluctuating prices, it is smart to opt for a fixed rate for a year or longer.”

5. Why should I opt for a dynamic contract?

With a dynamic energy contract, you pay the current daily price for gas and the current hourly price for electricity. Various smaller providers offer this, and Eneco is also starting this today. With this, the company anticipates an obligation in the new Energy Act of Minister Jetten, which has yet to be approved by the House of Representatives.

According to the Association of Dynamic Energy Suppliers (VvDE), in 2022 about 200,000 households already had a dynamic contract. At Eneco, about 3 percent of the more than two million customers are interested in such a contract, says head of customer organization Selina Thurer in De Telegraaf.

According to Van Cleef, a dynamic contract can be of interest to consumers who consciously deal with their energy consumption and enjoy being active with it. “If the wind blows and the sun shines today, prices will go down and you can get your money back. It’s part of becoming aware of energy efficiency,” he says.

For example, people can turn on the washing machine or dishwasher or charge their electric bicycle or car at favorable times when the price of electricity is low. “Especially if the net metering scheme ends, it can become interesting for people with solar panels. Then you can decide when you will use the generated energy yourself and when you will supply it back. The downside is that prices can be high in winter. can carry you.”

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