High energy prices pushing up energy bills

Driven by the sharp rise in demand for natural gas and the reduced supply, we have recently seen an enormous rise in energy prices. Due to the severe winter last year and the ongoing cutbacks in gas extraction in Groningen, the Netherlands currently has limited gas reserves. And given the current situation in Ukraine, we can hardly expect  Russia to increase gas supplies to Europe. So high energy prices are likely here to stay for some time.

Government cuts energy taxes to compensate for high energy prices

The Dutch government last year announced a number of energy tax-related measures to compensate households for the high energy prices. For 2022, these measures will result in compensation of around € 400 per household with average energy consumption. However, due to the continued rise in energy prices this is unlikely to result in much lower energy bills. The internet is of course full of tips on how to save energy. But it may also be wise to increase the monthly advance payments for gas consumption by a realistic amount. This would avoid households having to pay a large additional amount when they receive their final annual energy bill.

Increasing the advance

Everyone pays a monthly amount as an advance on their energy costs. For the final annual energy bill, the estimated consumption is compared with the actual consumption. This is then used to estimate consumption for the year ahead and the advance may be adjusted upwards or downwards. Due to the high energy prices, this year’s energy bills are expected to be higher than originally expected, even if households lower their thermostats by a degree or two and gas consumption is lower. Most Vesteda tenants in our apartment complexes have a collective energy contract via Vesteda and we have already approached them about this by email.

Making older homes more sustainable

In the meantime, we are working hard on the renovation of the older homes in our portfolio, including measures to make them more sustainable, to reduce energy consumption. At this moment, 93% of all Vesteda homes have a so-called green energy label, so A, B or C. In 2017, this was just  80%, as you can see from the table below. Our initial focus will be on making older homes with lower energy labels, such as D, E, F and G, more sustainable. Our goal is to have green energy labels for 99% of all our homes in two years’ time. In consultation with our tenants, we are already taking energy-saving measures, such as the  installation of HR++ double glazing, the insulation of walls and roofs and the installation of solar panels.