Feature – How are Europe’s retail energy markets performing?
CEER has examined how Europe’s retail energy markets preformed in 2018 according to measures such a market concentration, switching activity and the presence of price regulation in its recent Monitoring Report on the Performance of European Retail Markets. Each year, ACER and CEER monitor extensively Europe’s internal electricity and gas markets and publish the results in detailed volumes of the so-called. This detailed analysis of national retail energy markets supplements the annual ACER-CEER Market Monitoring Report with more in-depth and comprehensive understanding of the performance and evolution of the retail energy markets in Europe.
What’s in the CEER Monitoring Report on the Performance of European Retail Markets
With data at country level, the main topics covered in the report are:
- Market structure: numbers of suppliers; entry/exit activity; market concentration
- Customer switching activity: switching between suppliers and to different contracts in the same supplier; analysis of the types of offers available
- Intervention in price setting and price regulation in Europe as well as roadmaps for price deregulation in selected countries.
The report also contains two case studies that allows for a detailed look at retail energy market developments in Spain and France.
- In 2018 there was an overall increase in the number of EU nationwide suppliers, in comparison to 2017.
- Regarding market concentration, there has been an overall improvement across the past six years in both electricity and gas markets for household consumers across member states. Overall, household markets for gas and electricity are more concentrated than non-household markets and still a bigger effort is required to improve the market structure.
- Switching rates for household and non-household customers still differ significantly across member states.
- There is a positive trend in terms of offer variety in Europe: electricity consumers in 22 out of 27 Member States have five or more options which is four more than last year. Usually, variety of offers and liberalisation go hand in hand. The variety of gas offers is generally lower than the offers for electricity. Nevertheless, the trend is positive in this segment, too.
- For the first time, data on the availability of bundled products have been collected: in the electricity sector bundled products are more disseminated than in gas. 18 out of 27 energy regulators indicated the existence of bundled products in the electricity segment while this number is only 8 of 23 for gas.
- Price intervention is still in place for household customers in almost half of the responding countries in electricity and in gas. In the non-household segment, the trend for all countries is the decrease of the share of non-household customers under regulated prices and their future removal.
- In 2018, 14 countries in electricity and 11 countries in gas, reported some kind of intervention in the retail price setting mechanism in the household segment. For the non-household segment, 8 countries in electricity and 5 in gas reported having a price intervention, mainly in the form of regulated prices. France, Italy and Lithuania have roadmaps for removing intervention in setting end-user prices. In Great Britain the safeguard tariff, which was a temporary measure to protect vulnerable customers with prepayment meters (‘PPP cap’) and these in receipt of a Warm Home Discount, ended on 1 January 2019 when the default tariff cap entered into effect. The PPM cap will continue to apply in parallel to the default tariff cap, which is also a temporary measure, but customers can only be protected by one of the caps
This report is part of European energy regulators’ core task of monitoring energy markets and contributes to CEER’s efforts to improve markets for the benefit of consumers.