While retail energy prices have fallen significantly since eye-watering peaks in 2022, one expert says that Belgian households will likely never see their bills return to pre-energy crisis levels.
Looking ahead to this winter, University of Liège professor Damien Ernst notes that the direction of energy prices (in particular gas) will largely depend on the weather, with the only guarantee being that the era of government energy subsidies "is over".
Belgium paid 'full price' of energy crisis
Professor Ernst (who specialises in electricity and energy systems) told The Brussels Times, Belgium paid the "full price" for the energy crisis triggered by Russia's invasion of Ukraine in early 2022.
"It was terrible in Belgium, as it was in France, Germany, and the Netherlands, because we were fully exposed to wholesale prices for electricity and for gas, and we were depending a lot on gas for heating and for electricity production," he said.
Global energy prices soared in 2021 and 2022 following the pandemic and the Russian invasion of Ukraine, as the pipeline supply of Russian gas to Europe was cut off. Europe does however still import a significant amount of liquified natural gas, LNG, from Russia.
In Belgium, the largest share of electricity comes from nuclear production (40% according to the International Energy Agency), followed by natural gas at 21%, and wind at 19%.
Ernst notes that before the energy crisis the average price of gas in Europe was around €18 per mWh, which surged above €300 per mWh at the heart of the crisis around September 2022, and was "hugely catastrophic for consumers".
"For Europeans, prices of gas are still pretty high, and since prices of electricity are highly dependent on the price of gas, prices of electricity are also pretty high."
The Fluxys LNG-terminal (liquefied natural gas) in Zeebrugge. Credit: Belga / Kurt Desplenter
Prices will 'never go back' to pre-crisis levels
Ernst predicts that gas prices will likely "never go back" to pre-crisis levels, as they are still around 2.5 times higher than in 2021, hovering above €40 per mWh.
He adds that the direction of gas prices this winter is largely dependent on the weather; if Belgium is producing less renewable energy from wind turbines it is more reliant on burning gas to produce electricity.
"Everything is possible, if we have a warm winter with a lot of wind, prices will go down. If you have a very cold winter with very little wind (like it has been at the end of October and beginning of November), we may even deplete our gas reserve before the end of winter and then the crisis could go back to €100 per mWh," he warned.
"We cannot rule out that catastrophic scenario but if everything goes well – if we have a warm winter with lots of wind – prices will go down perhaps in the neighbourhood of €30 t o €35 per mWh."
Trump effect
While the weather can't be predicted, one certainty is the return of Donald Trump to the White House in the US, which Ernst says could spell good news for energy prices in Europe (although bad news for the environment).
"The thing that may be good for Europe with Trump coming to power is that he may lift bans on the export of LNG. For environmental reasons Biden made it more difficult to build terminals for liquifying natural gas, and export this gas to other parts of the world. I think that Trump may lift this ban on the building of new LNG terminals and that may increase the supply to worldwide markets and decrease the price of gas," he said.
No more government help
"We are still, in my opinion, in the middle of an energy crisis. Prices are high enough to impoverish European households and make life impossible for industries that rely a lot on electricity and gas for production. However, prices are not high enough for governments to take strong action," he said.
Ernst says that while the higher prices brought on by the energy crisis are likely here to stay, the era of government support for consumers and businesses struggling with electricity bills "is over".
