Odot
Odot will lower your energy costs using a unique procurement model supported by AI and innovative software. Our knowledge of the energy market will ensure that you benefit from the most advantageous tariffs, continuous price monitoring and a contract to suit your requirements.
In the past more advantageous energy tariffs always occurred during the summer months. Lower demand for natural gas and electricity when temperatures were higher always caused prices to fall during this period. Now, however, we see the opposite. In recent months energy prices have risen abnormally, already breaking several records.
Low gas stores in Europe.
High demand for gas in Asia increased the price locally. LNG vessels preferred to take their gas supplies to Asia rather than Europe because they could charge higher prices there, leading to a reduced LNG supply in Europe. Moreover, maintenance work on certain gas facilities and several minor incidents also contributed to the reduction in supply. European reserves are currently at their lowest level in 10 years, causing stress in the market. Finally, the rise in the CO2 price has also increased the demand for natural gas, making coal less competitive.
Domino effect on electricity prices.
The price increase in the electricity sector is due to several factors. On the one hand, the recovery of economic activity following Covid-19 increased demand for electricity. Low wind power production due to weather conditions in recent months and maintenance work on power plants also affected the increase. Finally, a large share of the production of electricity also became considerably more expensive due to rising gas, coal and CO2 prices.
Longer term energy prices.
Similar to Covid-19 disrupting the energy market very rapidly and unexpectedly, this phenomenon is something no one could have predicted. Current prices are on average 3 times higher than in the same period before the pandemic, which is unsustainable for many producers as well as entrepreneurs.
With winter approaching - and demand for natural gas and electricity set to increase again as a result - we do not expect energy prices to drop significantly this year. In the longer term, however, we do expect the market to stabilize. If natural gas prices fall back to normal levels when stocks increase again, this development will also have a positive impact on electricity tariffs.
Should you expect higher energy bills?
The current price increase has an impact on the energy share purchased at a variable tariff during this period. Usage for which the price was determined earlier is not subject to this variable price increase.
Odot always negotiates energy agreements that facilitate a combination of fixed and variable prices on behalf of its customers. This enables us, as energy managers, to choose the right price formula at the right time.
Read more here about Electricity & and Natural Gas management by Odot.