December 6, 2023

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The price of fixed energy is up to 300 euros more expensive than the variable alternative: what explains the price gap?  |  Energy prices

The price of fixed energy is up to 300 euros more expensive than the variable alternative: what explains the price gap? | Energy prices

Mining energyMost natural gas prices rose in November. For those who do not want to expose themselves to another price increase, a fixed price provides the appropriate answer. Although safety comes at a price: for natural gas alone, you can quickly pay up to 300 euros extra at a fixed rate. What explains this huge difference and which is the better option? Discover.

Written by Kurt Deman, in collaboration with Mijnenergie

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The consumer is in a better position than they were one year ago. Then market prices reached record levels and there was no freedom of choice: energy suppliers only offered variable prices. Meanwhile, you can contact up to eight players for a contract whose price remains unchanged for the duration. This is not the case with a variable rate. The energy supplier then adjusts your energy price on a monthly or quarterly basis, based on developments on energy exchanges.

Which energy suppliers currently offer the best prices for electricity and natural gas? Here you can easily compare current prices.

The difference for natural gas + electricity: more than 500 euros

Most consumers prefer a fixed price. Before the Russian invasion of Ukraine, the price difference between the fixed and variable rate was usually limited to a few tens of euros. Today the price range is much wider. This is demonstrated by price analysis via

With an average consumption of 17,000 kilowatt-hours (kWh), you pay an annual price of €1,471.49 for the cheapest variable rate for natural gas. The lowest fixed price will cost you €1,766.59. Difference: 295.10 euros. For electricity, the energy supplier with the cheapest variable contract has an annual bill of €1,100.38. With the lowest fixed price you can get €1,310.30. In this case, the price gap is 209.92 euros.

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Find out about electricity and gas prices for each municipality or city: Enter your postcode and get the cheapest energy supplier in your area.

Risk premium

Federal energy regulator CREG describes this difference as a risk premium you pay for price certainty. The energy supplier therefore wants to prevent the customer from entering into a fixed price contract and then switching back to another energy supplier a few months later. In this case, your current energy supplier will be left with the supplies they negotiated on your behalf.

What is the best choice now?

The theory seems simple: Once the final bill for a variable product is higher than the final bill for a fixed price, you’ve made a good fixed price choice. Unfortunately, no one can say with certainty how market prices will develop. Over the past month, tensions in the Middle East have put pressure on energy markets, causing market prices to rise. Meanwhile, prices have fallen again, but this demonstrates the tension and turmoil in energy markets.

You don’t have to pay for energy you don’t use: With these nine tips you can cut your heating costs.

Two determining factors

Whether you benefit from a fixed or variable rate depends largely on two factors. Your personality is an important element: If you are someone who chooses one hundred percent certainty, it is better to choose a fixed rate.

In addition, your assessment of geopolitical developments also determines the choice of price: if you expect various geopolitical tensions to escalate and energy supplies to come under pressure in the coming winter, a fixed price is also a suitable choice. Although it remains a piece of cake even for experts.

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This article is brought to you by our partner is an independent energy price comparison site for electricity and gas offers.