Rising energy prices: what to expect in 2022?

The price of energy continues to rise and seems to continue to rise in 2022. Tariffs have more than doubled since January 2021, for both variable and fixed contracts. What are the causes of this price increase? How much does energy cost today? And what are the forecasts for 2022?

Why such an increase in energy prices since 2021?

This sharp rise in the price of energy is not a question of supply and demand. Gas reserves in Europe are lower than in previous years, and the Covid-19 pandemic and its lockdowns have led to greater energy consumption. But other factors also contributed to this price surge:

  • War in Ukraine: The conflict between Russia and Ukraine has caused major disruptions in the energy market. Indeed, the countries of the European Union being very dependent on Russian natural gas, doubts about the supply of gas are therefore driving up prices sharply.
  • Increase in purchase costs: the purchase price of energy has increased considerably and suppliers pass these costs on to the consumer.
  • Rise in the price of CO2 emissions: the price of CO2 emissions paid by energy producers has increased, this has repercussions on the increase in the price of energy, and therefore on your energy bill. The price of carbon reached its historical low in 2021 and it does not look like it will decrease in 2022.
  • Electricity production linked to gas: a large part of the electricity produced in Belgium today comes from gas-fired power stations. In other words, if the price of gas goes up, the price of electricity inevitably follows.

How much does energy cost today?

The current US retail gas price is 4.599, up from 3.227 one year ago and down from 4.754 last week. This represents a change of -3.26% from the previous week and 42.52% from a year ago.
The typical electricity cost per kilowatt hour is $13.19. (kWh). In the US, the average cost of electricity for a residential consumer is 13.31 cents per kWh.

Energy price forecasts in 2022

Here’s what to expect from energy prices in 2022:

  • Rates announced earlier: in order to allow you to choose your energy supplier in time, they will announce their rates earlier than usual.
  • The price rise will continue: given the scarcity of gas, energy prices will continue to rise in 2022, at least until the summer. A mild winter would limit the rise in prices, but of course, this is impossible to predict.
  • Contribution to energy-saving measures: the Member States of the European Union will devote additional funds to grants and aid for energy-saving measures, such as replacing your boiler or installing a heat pump (best ways to reduce your energy bill).

What can you do? As an individual, you can take certain measures to save energy and protect yourself against possible future increases (eg installing a condensing boiler, a biomass boiler, a heat pump, etc.). And since the rise in prices is likely to continue, it is better to act now.

Why is it worth replacing your boiler?

To save energy and protect yourself against rising prices, it is better to take measures yourself, as those of the government will probably not be enough. What to do?

For example, you can replace your old boiler with a condensing boiler, a heat pump, a solar water heater, or a biomass boiler … Depending on your choice, you can benefit from these advantages:

  • Energy savings: recent heating systems are more efficient and more economical. For example, condensing boilers allow you to save up to 35% on your energy bill, and heat pumps mainly use completely free energy.
  • More thermal comfort: the hot water produced by the solar water heater can be used for household chores, but also for heating, showering, and even filling your pool.
  • Avoid gas and electricity: more and more households are opting for firewood and pellets (biomass energy), fuels much less affected by rising prices than gas and electricity.
  • Quick return on investment: thanks to energy savings, you recover your investment quickly. In addition, by replacing your boiler, you can apply for heating grants and aid from the Walloon or Brussels government, in order to lighten your investment.
  • The value of your home increases: with a new boiler, you also improve the EPB level of your home. It is an increasingly important factor in determining its real estate value. Interesting if you plan to resell one day!
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