Anya Kussé
As a leading player in the energy market, we unburden companies in their energy policy and develop future-proof energy strategies. Our team of experts negotiates, manages and optimizes our customers' energy contracts in a continuous and transparent manner. Supported by AI-driven software, we provide insight into the current and future cost of each MWh. We integrate sustainability into our overall approach and work pragmatically and solution-oriented to support you in the energy transition. Together, we create the most ideal energy landscape for your business.
In recent months, energy prices regularly took a big dive, even resulting in negative daily averages and hourly prices on several occasions. Will the fall bring more stability? Probably not, according to energy accounting specialist Odot, which supports 1,700 companies in Belgium with their energy strategy. "It looks like companies will also be faced with a real yo-yo effect in winter. The large fluctuations and negative energy prices, mean that it makes sense for more and more companies to consider investing in batteries. In addition, now is the time to negotiate a new energy contract - before the first winter pricks up prices," advises our CEO Chris Elbers.
Retrospective: A volatile summer for electricity with 'stable' crisis prices for natural gas
Electricity.
Looking back at electricity prices over the past summer months, we see a few notable evolutions:
⚡Lowervariable prices: The supply of renewable energy sources continues to increase, depressing prices. In addition, CO2 prices also fell quite sharply. In 2023 a certificate cost 90-100 euros per ton of CO2, in the summer of 2024 we were around 70 euros. This drop obviously had an impact on energy bills.
⚡Exceptionaljumps in daily prices: Between the highest daily average (119.94 euros) and the lowest daily average (-11.85 euros) there is a gap of about 130 euros. These differences were never so large in the past.
⚡Negativedaily averages: An exceptional phenomenon that did not occur once in 2022, once in 2023 and twice so far this year. The number of negative hourly prices also increased last summer months. At more and more times, power supply exceeds demand, so companies have to pay to put their excess energy on the grid.
Natural gas.
Zooming in on natural gas prices over the past three months, two observations stand out:
⚡Stablecrisis prices: Last year, daily averages were still regularly dipping below the 30 euro mark. That has not occurred this year since May. Natural gas prices remain at a high "crisis level," which is twice as high as before the Russian invasion of Ukraine. Two years after the peak of the energy crisis, however, there are no more natural gas shortages, but the market remains nervous. Any unexpected event - such as Ukraine turning the tables and invading Russia last summer - immediately leads to price increases.
⚡Volatilityis the new normal: Natural gas prices do seem to be more or less stabilizing, they are no longer making buck jumps like the past two years. Although we should take this relative calm in the market with a grain of salt: before the energy crisis, a sudden rise of 5 euros would be a big jump, now we hardly look at them and tend to label them as "stable. They have become the new normal.
Outlook: yo-yoing in winter
So what can we expect from the coming months? How will energy prices evolve in the fall and especially the winter ahead?
Electricity.
How do we expect prices to evolve?
⚡Lesspower from solar panels, more wind power, higher demand: Solar panels naturally provide less power in the darker and colder months. Companies that get much of their electricity from their PV installations will naturally also notice a big difference in their electricity bills. We're already seeing power prices at times of low sun immediately exceed 100 euros per MWh, or even spike toward 170 euros per MWh. These larger price fluctuations make estimating electricity prices particularly difficult.
⚡Adependenton natural gas: Adjusting (read: reducing) their electricity consumption is not obvious or even simply impossible for many companies, so they will have to rely on other energy sources more often than in recent months. Especially with part of the nuclear production going away from 2025, natural gas plants will inevitably play a more important role. The price of electricity in winter will thus be determined in part by the price of natural gas.
Natural gas.
How do we expect prices to evolve?
⚡Possibledecline in sight: Europe's strategic gas reserves are already 91 percent full today. The Belgian storage tanks in Loenhout are even 93 percent full. Those reserves give us some breathing room. The longer the real onset of winter is delayed, the longer that breathing space will last. It's a bit of an open door, but a mild winter - combined with ample reserves - can bring down natural gas prices.
⚡StillImpacted by Geopolitics: In addition to weather, we have seen in recent years that the geopolitical situation in particular has a major impact on natural gas prices. That situation today is almost as unpredictable as the weather. We still remain dependent on natural gas coming from Russia via Ukraine for a significant portion of our supply. Moreover, growing demand from China is also having an impact on the global natural gas market.
Key energy advice for businesses:
Batteries can be a profitable investment.
At Odot, we are increasingly asked whether batteries are already a profitable investment today. The answer of course depends on the power consumption as well as the energy production of the company in question. A thorough analysis is therefore recommended. But it is true that the large fluctuations in daily averages and the growth of the number of hours and days with negative energy prices make batteries an interesting investment for an increasing group of companies.
For companies investing in batteries, it is important to respond well to the imbalance market. Unpredictable renewable energy creates large differences between pre-estimated power consumption and actual consumption. When companies (or individuals) get more electricity than expected from their own solar panels they draw less electricity from the grid. Conversely, at certain times they also put more electricity on the grid than estimated. This is how so-called imbalances occur. These come with hefty costs, which can make big jumps. Batteries can deal with this by releasing power at the right (expensive) moments. Or by storing power at the cheapest moments. But then it is crucial that companies invest with their batteries in reliable expertise and technology to respond flexibly to these imbalances.
Our CEO Chris Elbers: "In the current imbalance market, batteries are a smart way to capitalize on price jumps. The question is whether this will remain so in the longer term. If more and more batteries are deployed in the coming years, this will have a major impact on the energy market, prices and returns. Looking more than, say, five years ahead is actually pointless. For an investment that still has quite a price tag attached, that is of course a risk."
Don't wait too long if you want to invest in solar panels.
The solar panel market will get a boost from the Flemish PV obligation that goes into effect next summer. Companies that consume more than 1 gigawatt hour of electricity per year will then be required to install solar panels on the roofs of their buildings (for government buildings, the limit is 250 megawatt hours). Businesses that fall under the obligation and do not yet have a PV installation (or need to expand one) are best advised to conduct a thorough analysis of their energy consumption in time to schedule their installation.
Chris Elbers: "Most companies will not fall under that obligation. But those considering investing in a new solar panel or expanding an existing installation should not wait too long. The PV obligation could cause solar panel prices to rise again (temporarily). Installers will see increased demand, which could cause upward price effects."
It is also important for all companies to keep a close eye on their electricity consumption. Companies that are not yet required to install solar panels may consume more electricity in the future and may then fall under the obligation. So to avoid fines, it is best to keep a close eye on your electricity consumption.
Negotiate your new energy contract before the first snap of winter.
Chris Elbers: "Companies had better think about a new energy contract for the coming years in good time. Start the negotiations when energy rates are low. If you wait until the first onset of winter, you risk energy rates just starting to spike. Then energy suppliers will offer more expensive price formulas, which you may then be stuck with for a longer period of time. So keep an eye on the rates and look for a more advantageous contract in good time."
A few more points of interest for businesses taking out their next energy contract:
⚡Try to estimate the company's future energy situation as best as possible. Major changes in the volume to be purchased, the installation of solar panels or the expansion of existing PV installations, charging stations, batteries ... They all have an impact. If you take into account the impact of future investments and can estimate them well, you can conclude a customized energy contract, with contractual volumes that are as realistic as possible.
⚡Look not only at energy tariffs and price formulas, but also at price-click methods and non-consumption-related costs (costs on power, annual fees, etc.). These help determine your energy bill.
⚡Be sure to pay close attention to boundary conditions, such as volume flexibility, duration, termination terms, ...
⚡Taking out an energy contract is step one, it is also crucial to manage it continuously afterwards. Monitor your taken and injected volumes, and decide at the right times on whether to make sharing formulas fixed or variable.