The energy crisis
The economic recovery after COVID-19 has let to an upturn in energy demand worldwide, while supply has remained tight and therefore the price of gas started to rise. In addition to this, governments have been engaged in a joint effort to limit the burning of coal aiming for net global carbon emissions to reach zero by 2050 and the decision to exit from coal has brought to a further increase of energy taxes.
Since February, the Russian invasion of Ukraine and subsequently Western sanctions exacerbated the situation, pushing crude oil and natural gas prices to near-historic highs, within knock-on effects on power sectors. European countries are facing the possibility of energy supplies being rationed.
What it means for our tenants
The current energy crisis entails the rising cost of living: you can except to pay more for everyday essentials like groceries, when heating your home or filling up the car. If you are going to book your holidays, don’t be surprised when you see the prices of car rentals, airline fares, and hotels. Our purchasing power is going to be lower and lower. Fossil fuels, for instance, doubled to 2.11EUR/l over one year. Heating prices have followed a similar path.
The cost of electricity has increased by 36% and the cost of gas by 132% (in comparison to June 2021) since January 2022. Our ALL-IN formula (with a projection margin of 10% increase) cannot cover such exceptional increase. As a result we have already adjusted the utility cost (charges) from 140EUR to 200 EUR up until now across all new contracts, with potential further increases down the line.
How to cope with this crisis?
Supply and demand shocks will continue to roil the energy market and the global economy but what can we done to cope with this unprecedented situation?
It’s all about gas
- Unplug electrical devices when not in use (don’t use stand-by mode)
- Turn off the air conditioner if not really needed
- Turn down the radiator in all common areas
- Do not heat rooms with the windows open
- Switch radiators off at night time
- Prefer microwave to oven or stove
- When making tea, fill the kettle just to the level you need
- Reduce water consumption (take shorter showers, turn water off when brushing teeth, fix the leaking faucet)
- Run full loads and wash at a cold temperature (max 30°)
To learn more:
- CNBC, “With war in Ukraine and threats from Putin, Europeans anxiously wait for energy rationing”
- The economist, “The first big energy shock of the green area”
- Financial Times, “Energy shock shows need to rethink green transition, Aramco chief says”
- Bloomberg, “French minister says Russian gas cut-off most likely scenario”
- Reuters, “France prepares for total cut-off of Russian gas”
- Luxembourg Times, “Germany dims the light to cope with Russia gas supply crunch”
- Seai (Sustainable Energy Authority Ireland), “Energy saving tips”
- Paperjam, “Gazprom va fortement reduire ses livraisons à l’Europe”
- Reuters, “German landlord LEG calls for limiting heating supply, Handelsblatt reports
Vauban&Fort is a pioneer of Co-Living in Luxembourg and has over 12 years of experience in flatshares for professionals in London, New York and Luxembourg. We apply our expertise and know-how to make sure our clients get the best possible housing experience in Luxembourg. You can find out more about Co-Living here and if you have any questions, drop us an e-mail.
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Nous avons bâti sur les 12 dernières années une solide expérience en colocation au Luxembourg, à New York et à Londres pour des professionnels. Nous nous occupons de louer des appartements ou studios grâce à notre expertise dans le secteur immobilier et à notre savoir-faire afin d’offrir à nos propriétaires et colocs la meilleure expérience possible sur le marché luxembourgeois.