If you want to reduce your electricity consumption, you're going to have to replace your household appliances, maintain them better or programme them at different times to avoid extra costs. Photo: Shutterstock

If you want to reduce your electricity consumption, you're going to have to replace your household appliances, maintain them better or programme them at different times to avoid extra costs. Photo: Shutterstock

Neither the electricity regulator - in place to protect the consumer - nor the energy minister, Lex Delles, have been willing to give any details of the new power network charges that start on 1 January, deeming their impact on household electricity bills to be negligible. It's a questionable description of a strategy, even though both companies are perfectly aware of what's on the horizon.

Electricity prices will rise by around 60% next year, but the government has decided to cover half of this increase, at the cost of €171m. This "cost" will prevent inflation jumping by one percentage point (which would trigger indexation more quickly than desired) and households putting their plans to invest in a heat pump or electric car on ice, thereby putting the country in difficulty with regard to its energy-climate plan.

And should the 30% increase not be enough for them to keep a close eye on their electricity consumption, the utility regulator Luxembourg Regulatory Institute (ILR) and the energy minister, (DP), with the support of the Klima-Agence, launched a major communication campaign last Thursday that is remarkable in that both sides refused to say how much the new network charges could cost consumers.

The figures have not yet been finalised, said ILR director , And that's true. But the impact will be negligible for most consumers, the regulator's boss and the minister repeated, which is far more debatable. "I can't give you any details," the minister told RTL, "it will depend on so many factors and situations that it's not possible."

First draft published on 15 October

In June, Phasing-out du bouclier tarifaire : un impact considérable pour les ménage” (Phasing out the tariff shield: a considerable impact on households), the Chamber of Employees (CSL) quoted information from the Ministry of the Economy and Statec that anticipated a 15% rise in network charges, a figure that has never been publicly contradicted. This is the first indicator of the 'neutrality' of the measure, and is supplemented by another document.

On 15 October, Creos, Sudstroum, Diekirch and Ettelbruck published a first version of their future tariffs "subject to ILR authorisation". They had to do this to comply with their European obligations on this subject. What does it say about network charges? That energy overruns will be charged 50% more per kilowatt-hour than others.

Extract from the new electricity supplier tariffs, as at 15 October 2024 and still subject to ILR approval. Source: Creos-net.lu

Extract from the new electricity supplier tariffs, as at 15 October 2024 and still subject to ILR approval. Source: Creos-net.lu

Network charges are made up of three parts: a fixed charge, a charge per kWh and a new overrun charge, also per kWh.

The document shows ten reference power categories, each with its own fixed charge, ranging from €8.91 per month to €643.84. Each household, depending on its household appliances, heating system or the presence of an electric car charging point, needs a different wattage and, on the basis of its bill for 2023, will see its supplier set a level of electricity consumption.

The charge per kWh is set in this document at €0.066.

As soon as the consumer exceeds his electricity 'quota', the supplier will apply an overrun surcharge of €0.099 per kWh, i.e. a 50% increase on the base price.

Controlling consumption or paying more

To try and understand the impact of this tariff, we have studied 2,070 scenarios based on the following assumption: annual electricity consumption for 2023 ranging from 3,000 kWh to 20,000 kWh and increasing, per thousand kilowatt-hours, up to 100% more consumption in 2024, which leaves us a margin well beyond what seems realistic.

For example, a household whose consumption is set at 3,000 kWh and which uses 3,100, 3,200, 3,300 and so on up to 6,000 kWh. Or a household whose consumption is set at 15,000 kWh and whose consumption increases by 100, 200 or 1,000 kWh up to 30,000 kWh.

These calculations show the level of increases, excluding the fixed charge. A household consuming 3,000 kWh and increasing its consumption by 100 kWh would face a 1.16% increase in its network charges - not to mention the price of electricity itself - but a household doubling its consumption would face a 20.83% increase in its network charges.

Of the 2,070 scenarios relating to the cost of overruns, more than 88% forecast an increase in charges of more than 5%, and more than 72% go as far as a 10% increase, which is not so insignificant.

To stay below the 5% increase, consumers will have to limit the rise in their consumption to 400 kWh with an annual consumption of 3,000 kWh in 2023, or 1,200 kWh with an annual consumption of 10,000 kWh, for example. How can you reduce your bill? By reducing your electricity consumption. This is sometimes easier said than done: the temperature and insulation of your home can play a role, as can the advanced age of certain household appliances. Or you can ask your supplier to change your power baseline.

The government, which will be paying 30% of the bill in 2025, has every interest in seeing household consumption fall so that it can reduce its own bill. And prevent the network becoming overloaded during peak hours, most often between 6pm and 10pm. All the more so as 11,241 more people became residents in 2023, 15,412 in 2022 and 10,667 in 2021. All of them heating, cooking, entertaining, recharging their cars and running their washing machines.

Read the original French-language version of this editorial column