After several weeks of discussions with energy companies, the Dutch government announced the rates for the cap on gas and electricity prices on Wednesday afternoon, and confirmed that households across the Netherlands would be eligible to receive a total of 380 euros compensation to help cover rising bills in November and December.

Families in the Netherlands benefit from price cap and compensation

While the plans were announced on Prinsjesdag in September, the government and energy companies have taken a few weeks to finalise exactly what the package of measures would look like. 

The cap on energy prices will only come into effect in the new year, but after facing mounting pressure from the opposition and the general public, the cabinet has also confirmed that small-scale consumers (i.e. families and small businesses) will be eligible for 190 euros in compensation to help cover the rising costs of gas and electricity in November and December. 

From January 1, 2023, households in the Netherlands will pay a maximum of 1,45 euros per cubic metre of gas and 0,40 euros per kilowatt-hour of electricity. The cap will only apply to the first 1.200 cubic metres of gas and 2.900-kilowatt hours of electricity used throughout the year. The consumption of any additional gas or electricity will be charged at the rates set out by each individual energy company. 

The cap is slightly lower than initially anticipated, and a second package of measures is also being finalised to support businesses that use a relatively large amount of energy (i.e. bakeries and butchers). This means that the package of measures costs significantly more than had been projected on Prinsjesdag, with the Dutch government spending 23,5 billion euros on the scheme.

Dutch climate minister emphasises cap is only temporary

“More and more people and companies are being affected by the unprecedentedly high energy prices,” Climate Minister Rob Jetten said. “With a price cap, we’re helping to reduce the burden and ensuring people have more certainty.” While Jetten was pleased that the rates were lower than planned, he emphasised that the measures were only temporary.

Consumer associations were happy to hear the government was putting more money into the scheme, but highlighted the fact that many households would continue to struggle this winter. “People who, sometimes out of necessity, consume more energy than average, because they are ill or have a large family, still pay the main price for part of their energy consumption,” Arjan Vliegenthart, director of the National Institute for Family Finance Information (Nibud), told NOS. 

Businesses have also expressed concern about the lack of information available about the scheme for businesses that consume a lot of energy. It will only come into effect on April 1, 2023, but will be implemented retroactively from November 1. It is not yet clear exactly which businesses will benefit from the scheme, or what the rates of the price cap will be.