Electricity bills will increase by around 30% in Luxembourg in 2025, much to the regret of many end users who, although markets had already passed on higher costs to consumers, were somewhat protected due to price caps electricity.
Because this energy price cap – a government measure aimed at reducing consumer prices – expired on December 31, 2024, which explains why prices will soar this year.
While an average household paid around 850 euros per year for its electricity, this bill would have reached at least 1,440 euros without the cap, calculates the director of Encevo, Claude Seywert. An increase of 30% therefore now means for a family of four people up to 300 euros more per year, depending on consumption.
However, in the event of non-payment, the end consumer may risk being disconnected from the electricity or gas network. But we cannot and must not simply cut off electricity or gas, specifies the Ministry of the Economy, questioned by the Luxembourg word.
Better use of existing networks
The Luxembourg Regulatory Institute (ILR) has also declared on this subject that there now exists a “fairer tariff structure” which in the medium term encourages consumers to use the network more flexibly and to better exploit the networks. existing.
The Ecological Movement (Meco) agrees with this trend: in the future it will indeed be increasingly important, particularly due to the development of renewable energies, to “avoid or reduce such load peaks of the network and, consequently, the costs of network extension.
The evolution of electricity demand in Luxembourg and in Europe largely determines the supply mission and naturally has a great influence on the security of this supply. If actual demand decreases compared to expected demand, the drop in consumption is compensated by a proportionately larger installed base.
Conversely, if actual demand increases, the relatively smaller fleet of installations may no longer be able to cover the entire demand at all hours. As a result, higher demand requires more capacity to cover the load, the government notes.
In its July 2024 version, the Integrated National Energy and Climate Plan (PNEC) assumes that efficiency and decarbonization efforts will overall reduce final energy demand and related emissions, but that the demand for electricity will increase at the same time.
The ILR collects network disconnection figures every year
Certainly, the prices should thus lead to the customer generating fewer peak loads. But critics say the way it is introduced “is unlikely to lead to real changes in behavior.”
We thus risk missing the real objective, Meco also believes – which could ultimately lead to a threat of cuts in the event of impossible-to-pay bills…
The ILR collects figures on these network outages every year. In 2023, 1,289 electricity connections were cut in Luxembourg, compared to 1,303 a year earlier – more recent data for 2024 is not yet available. In 2023, 166 gas connections were disconnected from the network due to non-payment of bills, compared to 193 in 2022.
For comparison, energy suppliers in Saarland, which has around a million inhabitants, will cut off electricity to around 2,400 consumers in 2023 due to unpaid bills. This represents just over 1,300 fewer power outages than in 2022, as shown by the figures in the annual monitoring report of the Federal Network Agency and the Federal Office. In Rhineland-Palatinate, more than 10,300 consumers had their electricity cut off due to unpaid bills last year, around 240 fewer cuts than in 2022.
“Unpaid bills come from all social strata”
Torsten Schockmel, director of Sudstroum, an energy supplier in Esch-sur-Alzette, believes that “the morality of payment does not necessarily have to do with morality, but that we also have many cases which are poorly organized “. And added: “In our cases of cuts, there are people from all social strata.”
In Luxembourg, a bad paying customer, but supported by social services, cannot be cut off from the network, specifies the Ministry of the Economy. The amended law of August 1, 2007 relating to the organization of the electricity market provides clear procedures for private customers in default of payment.
In the event of non-payment within 15 days following the first reminder, the supplier must inform the customer in writing of a possible network outage after 30 days. The customer receives all relevant information on this occasion, including the contact details of the relevant social service. A copy is sent to the social office. If the client receives help from social services, no network outage can take place.
In order to avoid disruptions, suppliers are required to inform private customers at an early stage about alternative measures such as energy advice, alternative payment plans or debt management.
The Klimat-Agence also offers specific energy advice for vulnerable customers, who can benefit from help to replace their energy-consuming appliances. In addition, practical advice is given for saving energy on a daily basis.
Other government measures
Furthermore, the government has decided to continue to subsidize electricity prices in order to relieve households in the face of the announced increase in electricity prices. The State’s contribution limits price increases for customers whose annual consumption is less than 25,000 kWh. Thus, all affected customers will see their bill automatically reduced between January 1, 2025 and December 31, 2025.
Finally, the government has decided to support the gradual end of the energy price cap with targeted social measures in favor of vulnerable households, such as the 10% increase in the cost of living allowance, the tripling of the energy bonus, the introduction of a reduced energy bonus for a wider circle of beneficiaries or the continuation and increase of the equivalent of the tax credit (ECI) and the extension until 2025 of the participation of the State financing of additional energy costs in retirement homes and care establishments.
This article was originally published on the website of Luxembourg word.
Adaptation: Megane Kambala
