In the face of ongoing turmoil in the energy markets, Belgian consumers are growing apprehensive about the security of their short-term fixed contracts.
Mid-October brought with it a startling surge in the price of TTF, the European benchmark for natural gas, which catapulted to over €50/MWh. This price hike, marking the highest level since mid-August, can be attributed to a constellation of factors.
One contributing element to this price surge was a gas pipeline leak in the Baltic Sea, connecting Finland and Estonia, disrupting the flow of natural gas. Additionally, escalating conflicts in the Middle East and a sudden drop in temperatures across Western Europe led many households to flick the switch on their heating systems. The confluence of these events has created a tense atmosphere in the energy market.
As the gas market experiences this price spike, the question looms large: could this tumultuous period lead to a further decline in the availability of fixed contracts? Inquiries made to energy suppliers indicate that, as of now, such a scenario is not yet a major concern.
Caution advised
Elsie Van Linthout, spokesperson for Mega, offers assurance, stating in an interview with L'Echo, "Gas and electricity prices have remained relatively stable for over six months, fluctuating between €45 and €55/MWh since March." As of October 20th, gas prices closed at €51/MWh, signifying a continued semblance of stability. In Van Linthout's perspective, there's "no reason to be alarmed, let alone consider discontinuing fixed-term contracts."
It's imperative to recognise that the European gas market faced even graver circumstances in the past year. At one point, the megawatt hour was trading at a staggering €160, reaching an all-time high of 342/MWh in August 2022.
Nevertheless, caution remains a watchword due to the fragile nature of the European gas market, particularly in light of the continent's second winter without Russian gas supplies. Liquefied natural gas (LNG) is stepping in as a substitute, but it's in high demand globally, creating a tenuous situation.
Monitoring the market
While fixed contracts are not under immediate threat, most energy suppliers are keeping a close watch on market developments. They acknowledge that markets continue to be highly volatile, responding to geopolitical and economic events, as well as weather forecasts.
In an added layer of complexity, certain energy providers have begun to include limitations on fixed contracts within their pricing information. For example, TotalEnergies (TE) now indicates that its product, "Pixel Blue Fixed," is available "while stocks last," specifying quantities for October 2023.
This approach, while new to some, is not without precedent, as Greet Roonsen from TE Power & Gas clarifies in L'Echo, "We have always determined fixed contract volumes at the beginning of each month based on the volumes we need to serve our customers."
This practice of publicly disclosing limitations aims to ensure transparency, particularly in times of exceptionally high demand. So far, these limitations have not been reached, and other providers, such as Eneco and Octa+, have also included similar information on their rate cards.
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Going the extra mile, Engie has opted to publish this information on its website. A footnote next to the term "fixed price" states, "Within the limits of available stocks: fixed-price energy contracts are only available in a limited volume (in October, 363 GWh for natural gas and 117 GWh for electricity)."
For now, none of the energy suppliers are revealing whether they are approaching the specified limits. In closing, Mega confirmed in L'Echo that they have no intention of incorporating such a clause into their contracts, offering a glimmer of certainty amid the current energy market tumult.
