🌈 A quick taster for you:
- The price of gas has risen to a record high.
- Electricity is slowly running out of steam.
- Nord Stream 2 is causing gas prices to rise relentlessly.
🧐 Why do I care?
If you’re lighting Christmas candles to keep warm, then there’s a good chance that’s because of the current energy prices — many of us will soon be making the choice to either turn down the heating and throw on another layer of clothing! Unfortunately there’s no heart-warming news on the horizon, as gas and electricity prices will continue rising in 2022. So let’s have a look at why this is happening.
🔍 What exactly is happening here?
- Gas and electricity will become significantly more expensive in 2022.
As of the 1st of January, over 400 gas suppliers will increase their prices — affecting more than 2.8 million households in Germany. For an average household of four people, this will mean a rise of €369 per year. If you’re thinking about how to save energy then a good tip is to keep an even temperature — rather than continually whacking up the heating.
- But, why?
Several factors are currently causing gas prices — and therefore also electricity prices — to rise. Compared with recent years, the European gas storage facilities are significantly less full. And while the economies of many countries were significantly affected by corona regulations, as these restrictions eased the demand for energy increased.
Also: electricity ran out of steam. Literally. There was hardly any wind this year, and a lack of wind in the North Sea meant that many electricity suppliers had to switch from wind to gas in order to continue producing electricity. On top of that, the increase of the CO2 tax from €25 per ton to €30 will affect gas and electricity prices. And last but not least, another factor in the rising costs is Nord Stream 2.
- Nord Stream 2 — The Empire Strikes Back
Oh yes, Nord Stream 2. This is a huge topic, and one that has major consequences for the European gas market. Basically, Nord Stream 2 is a pipeline that is intended to transport gas from Russia to Europe — and it is widely criticized because it would make Europe very dependent on Russia. The pipeline is currently waiting for approval from the German authorities before it can become operational. On Sunday evening the Foreign Minister Annalena Baerbock said that Nord Stream 2 does not fulfill the specifications of European energy law, and that there are too many safety questions still to be resolved. In response to this comment, gas prices rose significantly because it’s no longer looking so likely that the pipeline will be put into operation.
🤓 What does this mean for me?
If you don’t have gas central heating, then the rise in gas prices won’t directly affect you (lucky you!), but your electricity costs will become more expensive. High gas prices will increase the costs for companies, which they’ll no doubt pass on to customers in the form of higher prices. To sum it up: we’re all going to be affected.
One small tip is to remember that you do always have the choice to terminate the current contract with your energy provider and look for a cheaper one. So, make yourself a cup of tea, turn on some Christmas music, and get browsing on the comparison websites to find the cheapest provider!