In 2022, you will pay more for products, as it has become more expensive to produce them. Rising energy prices are forcing businesses to pass the bill further to the customers. Of course, rising energy prices also mean higher utility bills for you.
- Electricity bill: Average price is expected to be 90 øre/kWh, compared to 36 øre/kWh at the beginning of 2021. This means an average increase of 30% for a house with 4000 kWh/year (the math doesn’t add up because actual energy consumption represents only 25% of the electricity bill – the rest is transport, taxes and VAT). If you don’t have a fixed contract (fast pris), you are likely to see some “wild” increases in your energy bill.
- Heat bill: If you warm up your house with a natural gas boiler you can expect to spend at least 4800 dkk more. If you have an electric heat pump, you can expect to spend 1780 dkk more. If you are connected to the district heating company, then check their website to see the price predictions for 2022.
Why?
The energy demand in the world is very high (the world economy is booming), which led to a competition between Europe and Asia for energy resources. At the moment, China and India are willing to pay more than Europe. Also, the cost of polluting and emitting CO2 in Europe has increased 10 times since 2017.
What about our resources?
In the European Union, we are transitioning towards 100% renewable energy. At the same time, we are reducing the production of coal and natural gas, while we close down nuclear plants. Unfortunately, we had a summer with less rain and wind than usual. This means less energy produced from wind turbines and hydropower plants (water reservoirs). This also means, reliance on imported natural gas.
Unfortunately, the European gas suppliers failed to replenish stocks after the cold spring of 2021. Moreover, ~40% of the imported gas comes from Russia. Now Russia is using this situation for geopolitical reasons (approval of Nord Stream 2 gas pipeline; intervention in the Ukraine border crisis; etc.) and is sending less gas than usual through the existing pipelines. Russia’s agenda is to turn the European population against the transition towards renewable energy by making us experience a very cold winter.
The current situation can be called “a perfect storm” on the energy market and it is the result of failed energy and storage policies that made us very dependent on gas imports. Our only way out is to accomplish what we already started – the transition towards 100% renewable energy.
How to survive the price surge?
- Check your electricity contract – if it is a “fast pris” or a “variabel pris”; if you don’t want to risk, choose a “fast pris” contract.
- Call your electricity company to see if you can switch to a “fast pris”, see what price they offer you. Go to elpris and see what others are offering. In Denmark, it is free, very easy and fast to switch energy providers. After six months you are free to switch providers.
- If you plan to switch, be aware of “Introduktionspris” – check for how long is that price valid and what price is afterwards. Also, changing now to a “fast pris” might be a bit more expensive than usual, as many people on “variabel pris” are moving.
- Also, consider reducing energy use this winter. Take down the thermostat one degree at least; one less use of the washing machine a week; wash at lower temperatures – 20-30 degrees; Keep 5 degrees in the fridge and -18 degrees in the freezer; Use the tv less; etc.
- Read about improving the energy efficiency of your house. Using less energy to heat the house might be the solution for many years to come.
- If you planned to invest in a heat pump or an electric car, don’t give up. The price of natural gas has risen twice compared to electricity, in the last year. At the moment, there is just too little supply of cheap green electricity.
