Warm Sweater Day: an urgent call to separate electricity and gas prices in the face of persistently high gas prices
If someone doesn't do it for the climate (altruism), he or she may be persuaded to turn the thermostat down a bit for a day or longer because it also works out financially (egoism). Since the energy shock of autumn 2022, many people have become more aware of the importance of energy efficiency as a form of insurance against runaway pricing on energy markets. Since then, household energy consumption has fallen by a few percent annually. Good for the climate and the wallet. In this Wanted Fact, we take a moment to consider the relationship between electricity and gas prices.
When wind and sun are not enough… Nuclear energy and gas as an alternative
The millionth installation of solar panels was placed this month. Together they account for approximately 7 Gigawatts of production capacity. The Flemish government wants to implement a policy to increase this capacity to 10 Gigawatts by 2030.
However, if wind or sun are not sufficient, nuclear energy or gas will have to be used to avoid a blackout. Nuclear energy provides the cheapest form of electricity, which is not dependent on wind or sun. As a result of the nuclear phase-out, three nuclear power stations will be closed in Belgium this year: Doel 1 on 15 February, Thihange 1 on 1 October and Doel 2 on 1 December 2025.
Gas accounts for approximately 17.6% of electricity production. This is comparable to the level during the energy crisis of 2022-2023, when gas accounted for 19.6%. That share will increase from 15 February and will probably exceed 19.6%. Which makes us watch the gas market and the antics of the American president with suspicion. Add to that the uncertainty about a Russian anchor that can get stuck on a Norwegian gas pipeline (30% EU needs) or Qatar that stops deliveries because of EU rules…
The gas and electricity prices
The link between the gas price and the electricity price is that the electricity price on the wholesale market is formed by the last production unit that has to be switched on to prevent a blackout. It drives up the price for the total electricity bill for all those who produce more cheaply (nuclear, solar, wind, water) and gives rise to very large profit margins, albeit temporarily. However, what was a long temporary large profit margin for one in the winter of 2022-2023 was for many others a choice between turning the heating down a few degrees to the edge of liveable or food. People then found money to help out, with the 'basic package for electricity and natural gas'. This basic package was introduced in 2022 with two laws, but has since been extinguished.
However, the high prices are back and it does not look like they will improve any time soon. The gas price - and with it the electricity price - rose to higher averages in December and January and recently fluctuated around EUR 58.00 per cubic meter of gas. For that you have to go back to January 2023, in the full aftermath of the energy crisis. Only now we are not on a downward trend but on an upward trend with pauses in between.
Comparing inflation figures with January 2025 prices
The inflation figures compare the prices with the same month in the previous year. In January 2025, inflation was 4.08%. The price of electricity rose by an average of 8.8% in that month (Statbel figures). Gas rose by 93.3% on an annual basis, electricity by 26.7%. Energy contributed 1.32% to the inflation of 4.08% for January 2025. Which in turn has an impact on wages. For companies, this is a double bill: they are encouraged to produce low-carbon or free of CO2, i.e. with electricity, but that price rises and so do wages. This reduces their chances of competing in exports to countries where wages and prices have no impact on the production costs of their competitors. And they have to defend themselves on the domestic market against imported, cheaper produced products.
That is why the proposed urgent decoupling of the electricity price from the gas price for forms of production that do not depend on gas. By limiting the profit margin to 20% above the purchase price for resellers or to 50% on the production cost for producers who supply directly to the consumer, you can reduce the impact on these invoices and therefore also on inflation. Such intervention in the electricity price is permitted by Europe as long as it is temporary and a series of other conditions are met. It calls it a ‘public service obligation’ and is a few articles further than the other article that also allows a price intervention. You may know it better as the ‘social tariff’. It can reassure people that they are better protected against crazy electricity price shocks when they decide to no longer provide their heating with fuel oil or gas, to buy an electric car, etc.
Contact Wanted Law!
Do you have any questions or are you in a legal conflict? Feel free to contact one of our Wanted Lawyers so that we can personally advise and assist you.