Price caps will begin to apply in the Netherlands from January next year. The government agreed that electricity would cost the end customer no more than 0.40 euros per kilowatt hour and 1.45 euros cubic metre of gas.
Setting price ceilings for electricity and gas
The Dutch cabinet reckons it will give about €23.5bn to compensate for proposed price caps. The aim is to prevent price caps on electricity and gas from leading to supply outages should the market price rise above those levels.
Price caps, however, will not cover unlimited consumption of electricity or natural gas. In the case of electricity, only 2.9 megawatt hours per sampling point per year will be capped, and for gas the price regulation will apply to consumption up to 1200 cubic metres. Less than three megawatt hours represent almost the entire annual consumption of a smaller family house or regular apartment.
The amount of compensation is unprecedented
The plan to offset high energy prices for households and companies has previously also been supported by King Willem-Alexander of the Netherlands. “The impacts on people, families and companies are overwhelming,” the monarch said in his address to next year’s state budget proposal. He called the sum the government spends on compensations as unprecedented but necessary to maintain the purchasing power of the population.
