February 1, 2023

Taylor Daily Press

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Why electricity will be almost free on New Year’s Eve and only 400 Belgians will benefit from it

© Patrick Post

High energy prices? And the price of electricity in the wholesale market will drop below zero sometimes tomorrow. On average, suppliers in our country will pay less than €0.006 per kWh tomorrow, while as a consumer you paid an average of €0.57 for a new contract in December.

GVSource: BELGA

Electricity prices in Europe drop dramatically on the last day of the year. On the Epex spot exchange, where you can see the price of electricity the next day, the average price for Belgium drops to €5.76 per MWh. This is less than 0.006 euros per kilowatt-hour.

It’s just an average, because between 5 and 6 a.m. on Saturday the price is below zero – minus 0.02 euros per MWh to be exact. Thus, the energy suppliers got the money back if they still needed the power before that time. In Germany, prices are lagging behind. There, the average price for the entire day drops below zero, with -0.79 euros per MWh. It is lowest between 12 and 1pm, at -3.78 euros per MWh.

You’ll pay the same amount on New Year’s Eve for the consumption of your gourmet ovens or appliances as you would at other times. Unless you have a direct energy tariff, but hardly four hundred Belgians chose it. Because it is only interesting for people with high consumption and at the moment only ENGIE offers it on a limited scale. There was a pilot project underway at Eneco. There are, for example, horticultural companies that use hourly rates to intelligently manage greenhouses.

a lot of wind

To be clear: not all energy is traded at these spot prices. Suppliers must have enough power for their customers at any time of the day, but often buy out quantities weeks or months in advance. Prices in those markets are lower depending on the weather.

The expected peak moment is between 6 and 7 p.m. on New Year’s Eve. Then the cost of electricity in the wholesale market is still 27.93 euros, but this is also relatively little. The peak this year was in August, when there was a day when €700.41 was paid.

Low prices are a matter of supply and demand. There is a lot of wind, generating a record amount of wind power. In Germany, Code Orange applies to wind in many places. At the same time, there is little electricity consumption, because few businesses open between Christmas and New Year’s, especially on New Year’s Eve Saturday. And add to that the mild weather – it won’t go below 17 degrees, so we need quite a bit of energy to keep the houses warm.

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