Price cap for gas, electricity and district heating
In 2023, a price cap will apply for gas, electricity and district heating for households and other small-scale users. This means that up to a certain level of consumption, these users will not pay more than a maximum tariff. For most users, the price cap will result in a rebate on their energy bill.
Maximum tariffs for energy up to a certain level
In 2023, the following maximum tariffs (which include taxes) apply to the following usage ceilings:
- €0.40 per kWh for 2,900kWh of electricity used
- €1.45 per m3 for 1,200m3 of natural gas used
- €47.38 per GJ for 37GJ of district heating used.
Without these tariffs, most households and small-scale users would have a higher energy bill. The government is, in effect, subsidising the cost of energy. Users do not need to take any action to ensure they are covered by this scheme.
The price cap only applies for usage up to the ceilings set out above. For usage that exceeds these ceilings, users must pay the tariff given in their energy contract. Users whose contract stipulates a tariff that is lower than the price cap pay the lower tariff for all their usage. This means that no one will be worse off as a result of the price cap. The price cap scheme applies to users on both variable and fixed-tariff energy contracts.
Price cap for small-scale users
The price cap scheme applies to small-scale users. This means everyone with a regular energy connection, like households, small businesses and community associations. The building with the connection must be designated as a home or workplace, however. Examples include houses, offices and bars. But the price cap scheme does not apply, for instance, to storage units with their own, independent connections and energy contracts.
How the price cap scheme works in practice
In the Netherlands, users pay for energy in monthly instalments based on estimated energy use. They receive a final bill once a year showing their actual use. At this point, if they have overpaid, they receive money back. If they have underpaid, they must pay the difference. Users receive their annual energy bill at different points in the year, depending on when they took out the contract with their provider. The only way the price cap scheme can work is if it can be applied to users’ annual bills. This means the usage ceilings for the maximum tariffs (1,200m3 of gas and 2,900kWh electricity used in 2023) have to be split into: a usage ceiling before the date of the annual energy bill in 2023 and a usage ceiling for after that date.
The annual bill for district heating always covers a calendar year (1 January to 31 December) so the 37GJ usage ceiling does not have to be split.
Differences between how the usage ceiling under the price cap scheme is spread across the year
Users receive their annual bill on different dates. As a result, the date that splits the two periods varies by user. Energy providers will send their customers more information about this.
Annual usage ceiling is broken down into daily usage ceilings
For the purpose of splitting the usage ceilings over the two periods in question, the amount of gas and electricity that falls under the price cap on each day of the year has been calculated. These daily usage ceilings take account of the fact that people generally use more energy in winter than in summer. On 26 January, for instance, up to 7.6m3 of gas and 10.4kWh of electricity falls under the price cap. By comparison, on 5 August only 0.5m3 of gas and 5.6kWh of electricity falls under the price cap. The tariff in the energy contract applies to usage that exceeds these daily ceilings.
So, the total usage ceiling to which the price cap applies is divided into two parts:
- One part before the annual energy bill is received in 2023: the sum of all the daily usage ceilings for gas and electricity from 1 January until the date of the annual bill received in 2023.
- One part after the 2023 annual energy bill is received: the sum of all the daily usage ceilings for gas and electricity from the date of the annual bill to 31 December. This part is settled in the energy bill that users receive in the course of 2024.
The daily usage ceilings do not mean that there is a physical limit on usage per day. The per day amounts are purely so that energy providers can apply the price cap to all users in the same way, regardless of when a user gets their energy bill.
Not possible to transfer leftover usage between periods
If energy consumption in the period from 1 January to the date of the annual bill is less than the usage ceiling for that period, it is not possible to transfer the difference to the period after the date of the annual bill. What's more, the price cap only applies to energy consumption in 2023. If someone uses less than 1,200m3 of gas and 2,900kWh over the whole year, they cannot transfer the difference to 2024.
Most consumers will not miss out however, as the vast majority of consumers have a stable usage pattern. Consumers who exceed the price cap usage ceiling in one period will normally exceed it in the other, and the same goes for users who do not exceed it.
A consumer receives their annual bill on 13 April. From 1 January to 12 April inclusive, the ceilings for usage that falls under the maximum tariffs of the price cap scheme are 610m3 of gas and 976kWh of electricity. The consumer's actual usage from 1 January to 12 April is higher, however (700m3 of gas and 1200kWh of electricity). They pay the tariff stipulated in their energy contract on the usage above the ceilings (90m3 of gas and 224kWh of electricity).
From 13 April to 31 December inclusive, 590m3 of gas and 1,924kWh of electricity will fall under the price cap. For usage that exceeds these ceilings, they will pay the tariff given in their energy contract. The costs for this period will be settled in the annual bill that they will receive in April 2024.
Payments for small-scale users with collective gas, heating or electricity connections
The price cap scheme does not apply to small-scale users with a collective connection for gas, heating or electricity (known in Dutch as a ‘blokaansluiting’). These households will, however, receive a compensatory payment. Fixed amounts will be set for individual self-contained residential units (for instance, an apartment) and for individual units with communal living areas (for instance, a student room in shared housing). It is not yet clear what these amounts will be, but it will be comparable to the average amount of money saved by households to which the price cap scheme does apply.
The amount for individual units in shared housing will, in principle, be lower than for self-contained units, because energy use for a single room is generally lower than for a whole apartment.
Extra payment of €380 for self-contained residential units with a collective electricity connection
Self-contained units with a collective electricity connection will get an extra compensatory payment of €380 because they did not receive the energy discount payments of €190 each in November and December. Units in shared housing will also receive compensation for this, but the amount may be lower, in keeping with the lower average electricity use of these units.
The government expects the legislation for this to be ready by mid-February. It will be implemented with retroactive effect from 1 January 2023. On 18 January 2023 the government provided an estimate of the amount households with a collective energy connection would receive.
Compensation for SMEs
The price cap also applies to small and medium-sized enterprises (SMEs) with a regular connection. For energy-intensive SMEs, a special scheme will be introduced. You can find more information about this scheme on the website of the Dutch Enterprise Agency (RVO).