CEER report on commercial barriers to supplier switching in EU retail energy markets
What is CEER report on commercial barriers to supplier switching in EU retail energy markets?
This paper aims to address the question ‘what keeps customers from switching?’. Based on relevant research CEER aims to identify how the customer looks at the energy market and interacts with suppliers. In this paper, commercial barriers are identified as obstacles found from the customer perspective which stop or keep the customer from switching, the lack of trust in new entrants or even the energy market in general. They are rooted in practices by suppliers or customer perception about switching and/or the liberalised energy market in general.
What does the report propose with respect to commercial barriers to supplier switching in EU retail energy markets?
In this report CEER identified two groups of commercial barriers to switching:
1. Barriers that influence customer perception about the energy markets. CEER observed that most of these barriers are caused by incomplete, complex and non-comparable information on prices, contract conditions and market processes. - Insufficient monetary gain; - Lack of trust; - Complex switching process;and - Satisfaction/loyalty.
2. Barriers rising from commercial contract conditions that result in a form of customer lock-in. - Unjustified termination fees; and - Value added services.
Most of the identified barriers point towards the need to focus on increasing the quality of information that is provided to customers throughout the complete customer lifecycle. - Information on offers should be complete, understandable and comparable; - Information should comprise all the essential characteristics of the product (price, duration, start, end, contract conditions etc.); - Information in the contract should follow seamless from the information in the offer; - Information about the switching process should be provided; - Information during the contract phase is easily accessible; - Information about price changes is complete, understandable and comparable; and - Information about the end of the contract, a renewal offer and/or automatic renewal conditions is complete, understandable and comparable.
NRAs should identify the barriers in their relevant markets and select the right tools to remove them. Furthermore NRAs should seek to improve the transparency and comparability of offers. Price comparison tools can play a role here as well. When suppliers provide customers complete understandable and comparable information on prices and conditions this might encourage customers to be more active in the electricity and gas market. Cooperation with national consumer protection agency and consumer organisations might also be an efficient way to remove some of the barriers discussed in this document.
How does it work?
Based on consumer surveys, case studies and previous work this report aims to identify the main commercial barriers to switching. When we talk about switching we mean the complete process from the orientation phase till the moment the customer is supplied under the new contract. We want to examine the evidence of these de facto barriers to switching, evaluate their impact on customer perception and on market dynamics. Ultimately, this report provides NRAs with a collection of work done on consumer behaviour related to customer switching in the retail energy markets.
Why is this important for energy customers? What is the impact on energy customers?
Switching offers customers the most direct way to benefit from the market, but in practice energy customers are confronted with barriers when they want to switch or orientate on switching suppliers or contracts. The commercial barriers identified in this paper provide guidance for NRAs on supervising that suppliers work according to consumer protection law, and encourage customers to be more active by giving complete, transparent and comparable information about the price, contract terms and conditions, as well as ensuring an easy switching process. This might help NRAs and CEER to determine on which aspects to focus their future work regarding consumer behaviour in order to remove some of these commercial barriers to switching.
CEER Benchmarking report on removing barriers to entry for energy suppliers in EU retail energy markets
What is the "What is the Benchmarking report on removing barriers to entry for energy suppliers in EU retail energy markets?"?
The aim of this benchmarking report is to build on previous work to identify barriers to entry for energy suppliers into retail gas and electricity markets across EU and examples of actions NRAs are taking or envisage taking to remove them. It describes a range of different barriers to entry and sets out the results of an extensive consultation process on each of these barriers with 22 NRAs. It will provide a basis for the forthcoming CEER Guidelines of good practice on removing barriers to entry for energy suppliers in EU retail energy markets, planned in 2016.
What does the report propose for removing barriers to entry for energy suppliers in EU retail energy markets?
The benchmarking report addresses the following barriers:
1. Barriers to market access: Barriers arising as a consequence of the way the energy supply chain works, and of the characteristics of the gas and electricity products.) - Lack of access to customer and market information from a supplier’s perspective - Lack of price transparency - Wholesale market functioning
2. Regulatory barriers: Barriers associated with the regulatory framework. - Impact of regulated end-user prices - Lack of consideration for innovation in regulation - Inefficient unbundling - Legislation changes
3. Barriers to entry arising from differences in processes and standards: Barriers arising as a result of differences in processes and standards, which make it difficult for a supplier already present in one area to enter another area. - Billing format and IT systems - Business processes - Data management - Switching processes
4. Barriers to entry specific to cross-border entrants: Barriers relating to differences across member states that specifically apply to cross-border entrants. - Adapting to local languages and culture - Homogeneity of system / legislation
How does it work?
To form a basis for the benchmarking report, CEER has selected a set of high level barriers to entry for energy suppliers based on previous publications by CEER, ACER and other organisations. NRAs were also asked to highlight any other barriers that they considered to be important or relevant. Separate responses were requested for the electricity and gas markets. Comment boxes were provided, allowing NRAs to provide commentary, and in this way give a more comprehensive account of the different strategies and approaches used to remove entry barriers.
Why is this important for energy customers? What is the impact on energy customers?
In order to achieve a well-functioning retail energy market, new suppliers must be able to enter into and compete on a level playing field in the market. New entrants create competitive pressures, forcing existing suppliers to adapt their strategies. They can also bring in new and innovative ways of operating. These are important factors in helping the energy markets to deliver CEER’s 2020 vision for Europe’s energy customers.
CEER Position Paper on well-functioning retail energy markets
What is the "Position paper on well-functioning retail energy markets"?
The position paper is CEER’s view on what a well-functioning retail energy market looks like. It contains principles and key properties of well-functioning retail markets. The position paper helps regulators and policy makers to assess energy markets for consumers and adjust policy, or shape future policy developments.
What does the report propose for well-functioning retail energy markets?
CEER strongly believes that the following two principles should be in place for energy markets to function well: 1. Consumers are aware of key features of energy markets; they are empowered and are enabled to engage in market activities through which they can acquire further trust in the market and its actors; 2. There is a high degree of competition and innovation thrives to the benefit of consumers.
How does it work?
The position paper helps National Regulatory Authorities in each member state, but also the Commission to assess whether an energy market is working to the benefit of consumers. It gives insight into which areas of the energy market are not performing well, so policy makers can adjust their policy, or use this knowledge for future energy policy.
Why is this important for energy customers? What is the impact on energy customers?
This paper proposes an energy market that truly benefits the consumer. When shaping the key principles and properties of an energy market, the RASP principles were considered as the core foundation. CEER believes that it is essential for consumers to become involved energy consumers, and consequently trust the energy market and its competitors. Without consumers having an active role, energy retail markets cannot function well. In order for consumers to become active, energy suppliers, but also providers of value-added services, must offer products and services that comply with the RASP principles.
Reliability in the physical supply of energy, and in commercial systems and processes that provide continuous access and affect customer service levels, such as billing. It also means reliability in the processes that allow problems and disputes to be resolved transparently, fairly and quickly.
Affordability such that charges are clear and kept to fair and reasonable levels for all customers, reflecting value for money at a level consistent with funding necessary investments to develop energy networks and to achieve energy policy targets (for example renewables), taking into account the real needs of customers. This can be secured through network regulation and other appropriate measures, if and when necessary, and by providing customers with effective choice over truly competitive offers and new, innovative services. Energy sector specific measures as well as wider social policies have an important role to play, especially for the poorest and more vulnerable.
Simplicity in how information is provided to customers, and especially residential consumers, such that it is easy for them to understand their bill and better manage their energy consumption, making the choices that are right for them. It also means simplicity and transparency in how processes that affect customers operate. Many customers, and especially many residential consumers, want to be able to take quick and simple decisions in energy markets.
Protection and empowerment to ensure access to energy supplies, and to guard against unfair commercial practices and unsatisfactory outcomes, recognising the diverse needs of customers, in particular the most vulnerable in society. For customers to be engaged, to take choices and to exercise their rights as energy customers, based on trust in and knowledge of how the energy sector operates. As responsibilities shift and consumers are increasingly expected to become more active in energy markets (through developments such as demand response, smart metering, micro-generation or energy efficiency measures), our Vision recognises their right to choose by whom and how their energy is to be provided and charged. Although this freedom could be framed by regulation, offering meaningful choice for customers, including residential consumers, is a key way to ensure their full protection.
Implementing the 2020 Vision for Europe's Energy Customers - CEER Action Plan 2015-2017
What is "CEER Advice on Customer Data Management for Better Retail Market Functioning"?
CEER believes that efficient, safe and secure data exchange between stakeholders is vital for retail market functioning and customer protection. For customers, a key consideration is which parties have access to their data and for what purpose. The availability of data is also crucial to the operation of effective competition. In the European gas and electricity retail markets, there are currently limitations on the type of data available and on which parties have access to this data. Consequently, data management can be regarded as a potential barrier to competition. For these reasons, CEER has worked on the issue of data management and published this Advice.
What does the Advice propose in order to achieve effective data management?
The Advice proposes that a chosen data management model should reflect security and privacy measures and also be transparent. The model should produce accurate data and the data should be easily accessible for the customer. Finally, the model should be non-discriminatory in order to support an effective and competitive energy market.
These five guiding principles (and seven recommendations) apply to all models for data managements. Therefore this Advice is applicable to all EU Member States in order to improve the retail market functioning and to ensure customer protection.
How does it work?
In order to prepare this Advice, CEER has carried out an extensive public consultation exercise.
During spring 2014, a draft version of this Advice was circulated for public consultation to all interested European stakeholders. We received answers from 58 respondents. In follow up to the comments received, we invited all respondents to a public hearing in Brussels in September 2014. In preparing the final Advice, we took into account views expressed by respondents to the public consultation and those who attended the hearing.
Why is this important for energy customers? What is the impact on energy customers?
This Advice proposes a series of recommendations organised under 5 guiding principles: Privacy and Security; Transparency; Accuracy; Accessibility; Non-discrimination.
These guiding principles (and the recommendations) for customer data management relate to the 2020 Vision for Europe’s energy customers and its RASP principles:
Reliability: customer data should be managed in a reliable, safe and secure way.
Affordability: accessing the data for the customer should be free of charge, and in any case it should be kept to a reasonable cost for third parties authorised by the customer to access their data.
Protection: customer data belongs to the customer and should be protected in a way that only parties authorised by the customer (or with a regulatory obligation) can to access the data.
Empowerment: an efficient, safe and secure customer data management process should ensure among others a smooth switching process. Furthermore, customers should be able to provide access to their data to any third party of their choice. This should empower consumers and open a market of innovative services which should benefit them.
Implementing the 2020 Vision for Europe's Energy Customers - CEER Action Plan 2015-2017
What is "Implementing the 2020 Vision for Europe's Energy Customers - CEER Action Plan 2015-2017"?
Together with the publication of the CEER-BEUC 2020 Vision in 2012, CEER published a “3-year rolling action plan” explaining the work to be carried out by CEER between 2012 and 2014 with the aim of promoting the Vision. Since then, CEER has been working on the implementation of the RASP principles (see question below) through different actions (Organising an annual customer conference, including deliverables in the CEER work programme, involvement in the Citizens' Energy Forum, etc.).
The document “Implementing the 2020 Vision for Europe’s Energy Customers – CEER’s Action Plan 2015-2017” summarises CEER’s customer-related work carried out since the publication of the 2020 Vision and establishes CEER priorities of work for the next 3 years. It takes into account regulators’ views expressed in Agency for the Cooperation of Energy Regulators’ document “A Bridge to 2025: Conclusions Paper”.
What does the Action Plan propose for CEER’s work in the period 2015-2017?
The CEER-BEUC 2020 Vision for Europe’s Energy Customers (November 2012) This Vision is characterised by four principles governing the relationship between the energy sector and the variety of its customers. These principles (the RASP principles) are also the basis of every piece of work that European energy regulators prepare through CEER: Reliability, Affordability, Simplicity and Protection and Empowerment.
As expressed in the ACER document “A Bridge to 2025”, CEER is developing further and applying the “RASP principles” into practical actions to enable market development across EU Member States, while protecting and empowering consumers.
The Action Plan recaps on the CEER deliverables announced in the 2015 Work Programme and outlines the following areas of work for 2016 and 2017:
Status review on the implementation of CEER Guidelines of Good Practice on Price Comparison Tools
Benchmarking report on how customer metering data can be managed and presented to increase customer engagement in energy markets
Roadmap aimed at competitive, reliable and innovative retail markets by 2025
Determine minimum standards to remove market barriers
How does it work?
This Action Plan summarises CEER’s customer-related work carried out so far and establishes CEER priorities of work for the next 3 years, taking into account regulators’ views expressed in ACER’s document “A Bridge to 2025: Conclusions Paper”.
Finally, we explain the different ways in which we are trying to improve our communication strategy, the way we engage with stakeholders and how national regulatory authorities share their knowledge of customer issues within CEER.
This document is not static; it intends to show the continued progress on the implementation and promotion of the 2020 Vision by CEER. It will also serve to inform market stakeholders about upcoming initiatives and developments by European regulators.
Why is this important for energy customers? What is the impact on energy customers?
The end goal of the different pieces of work carried out by European energy regulators through CEER is to put customers at the heart of the energy market.
Identifying market dysfunctions, or on the contrary, identifying best practices, helps CEER propose recommendations for the different market actors, governments and NRAs in order to promote a market which: provides reliable services (Reliability) at fair and reasonable prices (Affordability) in a simple way (Simplicity), while ensuring that customers are protected from unfair practices and have the possibility to engage actively in the market (Protection & Empowerment).
CEER Advice on Customer Infomation on Sources of Electricity
What is the CEER Advice on "How to engage and involve consumer organisations in the regulatory process"?
This Advice proposes a number of ways in which regulators and consumer organisations can improve their collaboration. The aim is to show in which fields and through which measures regulators can encourage a more structured approach to their dialogue with consumer organisations as part of their extensive consultation of energy markets and the various actors (or “participants”) engaged in them. Regulators are charged with balancing a range of interests in the energy market, whilst working in the public interest, in order to achieve better functioning of and conditions for markets and consumers. The engagement of consumer representatives in the regulatory process overall can assist regulators, and ultimately consumers themselves, in carrying out their responsibilities in what is often considered a complex and technical sector.
What does the Advice propose?
The Advice proposes that regulators and consumer organisations should share their respective expertise to promote a better understanding between them of how energy markets work and what are the interests and needs of consumers. The Advice also proposes ways in which consumer organisations can support regulators in developing new policies.
How does it work?
Involving consumer organisations more structurally in the regulatory process, as proposed in this Advice, is believed to have a number of positive effects. CEER puts forward 16 recommendations divided in four thematic areas:
Information Exchange: recommendations in this area relate to different ways in which the information flow between NRAs and consumer organisations can be improved.
Capacity Building: consumer organisations can benefit from NRAs expertise in technical issues, at the same time NRAs can benefit from consumer organisations’ first-hand information and insight on customers’ needs.
Policy Development and Design: The process of collaboration in policy development should therefore start from a common understanding of the different focus areas and policy directions.
Improving Compliance: Effective implementation, compliance and enforcement of rules are important aspects in creating trust in the market and its actors. Regulators have a key role in this respect as their responsibilities include the implementation and enforcement of rules as well as the design of measures aimed at improving compliance. Engaging in information exchange with consumer organisations could improve the quality of envisaged compliance measures.
Why is this important for energy customers? What is the impact on energy customers?
Both regulators and consumer organisations work towards the goal of empowering energy consumers, even if they do so under different mandates and responsibilities. As part of a transparent and inclusive regulatory process for all interested energy market participants, structured exchanges between regulators and consumer organisations should lead to a better outcome for consumers. With this Advice, regulators have sought to examine the relationship with consumer organisations thoroughly and to recommend ways for facilitating its development.
The recommendations in this Advice can be viewed in terms of how they relate to the four key principles established in CEER’s 2020 Customer Vision - reliability, affordability, simplicity and empowerment/protection, (the RASP principles):
Regulators’ structured approach to consumer organisations is believed to strengthen the reliability of processes and services delivered to consumers and to enhance customer empowerment/protection as more transparency, regulatory accountability and enhanced compliance with rules should result from cooperation with consumer organisations;
By joining forces in disseminating, explaining and increasing accessibility of rules and regulations in the market, customers will benefit from information that is readily available and simple to understand; and
An enhanced engagement of consumer organisations in energy policy development should contribute to improving the design of market rules to achieving more competitive markets, which in turn is a condition for affordable prices in the long run.
CEER Advice on Customer Infomation on Sources of Electricity
What is the CEER Advice on customer information on sources of electricity?
This document outlines CEER’s recommendations regarding the information provided to customers on the sources of the electricity they are supplied with (this is called disclosure), in particular electricity from renewable sources. It presents recommendations on how to make the system for electricity disclosure more coherent and reliable, so that customers can make a decision based on information they can trust.
Why have we worked on this issue?
CEER considers that customers are entitled to have access to reliable and comprehensive information regarding the electricity they consume. As CEER puts customers at the centre of its work, we have analysed the disclosure system from a customers’ perspective. The recommendations developed in this Advice aim to empower electricity customers by developing a reliable, trustworthy and transparent disclosure system. CEER considers this Advice to be timely given current developments in energy policy and in the renewables sector, as well as the growing interest of customers in electricity (generated from renewable sources).
What does the Advice propose?
The recommendations in this Advice set ambitious long-term targets. While the first recommendations are related to the importance of access to adequate and reliable information for customers, other recommendations deal with the development, improvement and European harmonisation of existing disclosure systems and its main instrument, the Guarantee of Origin (GO). Further recommendations address the relationship between renewable support schemes and disclosure, as well as so-called “green electricity labels”.
These recommendations are the result of an extensive consultation process. By holding workshops, a public consultation as well as a public hearing, CEER was able to include many stakeholders‘ opinions and views.
Why is this important for energy customers? What is the impact on energy customers?
Set in relation to the four principles of CEER’s 2020 Energy Customers Vision, the importance of the recommendations found in the Advice can be explained as follows:
Reliability: The harmonisation of disclosure systems across Europe should minimise the risk of double disclosure and would therefore make the system more reliable and resistant to fraud. Such an approach would enable customers to have access to reliable and transparent information that can help inform their decisions when considering their energy supply.
Affordability: Through the further development and harmonisation of the disclosure system, a single, coherent and properly-designed system can be created. Such a system has the potential to reduce administrative burden and costs.
Simplicity: A disclosure system must be transparent and easy to understand for customers. Access to reliable and comprehensive information is crucial. The recommendations developed by CEER explicitly deal with these issues.
Protection and empowerment: The recommendations developed by CEER aim to empower electricity customers by providing them with adequate, reliable and transparent information on the sources of their electricity. Using this information, customers are able to make a well-informed choice regarding the electricity which they (wish to) consume.
What is the Report on the Implementation of the 2020 Vision?
This document represents CEER's first assessment of the level of implementation of the 2020 Vision for Europe's Energy Customers by its supporters. Its aim is to sum up the responses provided by the supporters of the 2020 Vision to a questionnaire sent by CEER before CEER's 3rd Annual Conference on Energy Customers which took place on 18th June 2014.
Why have we worked on this issue?
The CEER-BEUC 2020 Vision for Europe‟s Energy Customers was published in November 2012. This Vision is characterised by four principles governing the relationship between the energy sector and the variety of its customers. These four principles (the RASP principles) are also the basis of every piece of work that European energy regulators prepare through CEER: Reliability, Affordability, Simplicity and Protection and Empowerment.
Since the launch of the 2020 Vision, different European and international associations representing the entire energy market value chain, as well as other market actors, have registered to become supporters. At the time of publication of this first “Report on the implementation of the 2020 Vision for Europe‟s energy customers”, there are 17 supporters.
With this report CEER wants to examine how the RASP principles are being implemented by the Vision Supporters.
What are the main conclusions of this report?
Supporters of the Vision who responded to the CEER questionnaire consider that the RASP principles and their implementation provide added value, particularly to increasing customers’ awareness of, and trust in, the energy market. In turn this allows them to make informed choices in a competitive environment. They acknowledge that the principles are helpful guidance in their daily work and that their implementation is becoming part of their regular activities aimed at improving customers’ experience in the energy market.
The questionnaire also highlighted that supporters of the Vision have been increasingly focusing on customers’ issues in recent years.
Some of the supporters’ responses show and it is CEER‟s opinion that there is still room for further improvements in the implementation of RASP principles, particularly in the area of simplicity and protection and empowerment. .
Why is this important for energy customers? What is the impact on energy customers?
This report represents another step in the implementation of the 2020 Vision and its RASP principles. CEER considers it important to work towards translating the 2020 Vision into reality.
CEER has reviewed the actions taken by the supporters of the Vision and reaffirms the importance of the RASP principles in achieving an energy market which provides real benefits to customers.
By embedding these principles in the activities and policies of Europe's energy actors and policy-makers, CEER hopes that the functioning of electricity and gas marktes will be improved to the benefit of consumers. A consumer-centric philosophy which is applied in practice should result in high level of services and efficiency.
Advice on the Quality of Electricity and Gas Distribution Services
What is the advice on the Quality of Electricity and Gas Distribution Services?
This document provides CEER's advice and recommendations regarding the quality of distribution services which are key for customers, i.e. connection, disconnection and maintenance.
Why have we worked on this issue?
CEER considers that household customers should be able to expect clearly stated minimum quality levels for key distribution services. From a customer perspective, connections, disconnections, activations and maintenance are very relevant processes, as in some cases, they imply the first customer interaction with the energy market. If these processes are well designed and functioning well, they will contribute to improve customers’ perception of the energy market.
What does the Advice propose?
The recommendations included in this CEER advice document set ambitious targets in a long-term view. These targets are ambitious but realistic because they represent existing practices in some Member States. In our view, these long-term objectives are positive for operators because they try to offer regulatory stability which helps distribution companies with their long-run investment planning. The advice is also good for customers because of its level of ambition in their interest.
We have divided the recommendations (16 in all) into the following seven areas:
Connection to the grid
Disconnection of energy supply
Disconnection due to non-payment
Planned energy interruptions
Information during un-planned energy supply interruption
Customer information about connection, activation and disconnection procedures
Installation handling
These recommendations are the fruit of an extensive consultation process in which CEER has gathered input from all interested parties by means of an 8-week long public consultation, a public hearing and a meeting with DSO representatives.
Why is this important for energy customers? What is the impact on energy customers?
Set in relation to the four principles of CEER's 2020 Energy Customers Vision, the importance of the recommended quality levels for the key services mentioned above can be briefly explained as follows:
Reliability: The physical energy supply depends on well-functioning connection and maintenance, and, when needed, also disconnection. By applying the recommended service quality levels, the customer service levels will be clearer and any emerging problems should be taken care of quickly.
Affordability: The price for a connection would be clear and understandable for the customer. The customer would receive a price offer in advance.
Simplicity: The processes for connection, disconnection and maintenance must be transparent and easy to understand. Quick and customer-friendly service as well as comprehensive information is important. Protection and empowerment: Connection is the very basis for customers´ access to energy. Therefore, the customer should be able to understand whom to contact, how the process works, his/her rights, the costs, the timing as well as general service levels (also once the connection is in place).
Status Review on customer access to information on energy costs, sources and energy efficiency schemes
What is customer access to information?
Customers are entitled to 1) clear and simple contracts; 2) transparent prices; and 3) clear information about the cost of their energy, current and past consumption patterns and energy efficiency schemes. These rights are designed to help empower customers better to understand and manage their energy consumption in more efficient ways, contributing to more affordable and efficient energy consumption. These customer rights further aim to facilitate awareness of the functioning of energy markets across the European Union. Likewise, they should equip customers with the means to comprehend their energy bills and consumer-relevant implications of energy from different sources (especially renewable sources such as hydro, wind or solar power). They should also serve to make clear the rationale and financing of available energy efficiency schemes; that is, instruments for saving energy via better insulation, replacement of older appliances or similar measures. Finally, such rights should assist customers to be in a position to choose their preferred energy supply. By “customer access” we mean the availability, accessibility and understandability of information on key energy aspects, such as the costs and sources of energy and of energy efficiency schemes.
What does the review propose for customer access to information?
The Status Review illustrates that information on energy costs, sources and efficiency schemes is widely available for customers throughout CEER countries. In the vast majority of countries, key information of the cost of energy is available via energy bills and through other channels, mainly the internet. As for sources of energy, customers can also find information on their bills, although most information is made available online. For instance, the company energy mix illustrates what share of the energy sold by a supplier comes from various sources such as hydro, wind, solar, biomass and other sources of power. Although there are some noteworthy differences between countries, the review suggests that the information provided covers a broad array of aspects of the costs and sources of energy and of efficiency schemes.
How does it work?
Information on energy costs, sources and efficiency schemes is provided by different market participants. In most CEER countries, the national regulatory authority for energy (NRA) assumes a leading role in providing information to customers. NRAs go well beyond their legal mandate and provide additional information on a voluntary basis. Likewise, other actors, such as energy suppliers and government authorities, often make information available. Such multiplicity of information and information providers can result in differing interpretations of energy issues, and can facilitate customer access to information they can use in making informed opinions on their supply choices. However, a larger variety of information may not always make energy matters simpler to understand. Providing too much information can often confuse people. An oversupply of information may also deter some groups of customers from a deeper engagement and involvement in energy markets – simply because processing too much information may overburden them. Hence, while information from different sources may facilitate free and informed choice of various energy supply deals for some groups of customers, the downside may be that other groups of customers may abstain from making a choice as a result of having too much information to sort out.
Why is this important for energy customers? What is the impact on energy customers?
This Status Review shows that information on the costs and sources of energy and of efficiency schemes is widely available to (final) customers across Europe. This can help enable customers to make informed and free choices in energy matters. The Status Review identifies the key market actors who provide such information. While cross-national differences in the roles and responsibilities of market participants persist, customers can most often access key information from two or more parties in each country. Such diversity certainly contributes to having more reliable information since bad practices (misleading information) are identified by competing/monitoring parties and alternative views are offered. The Status Review also investigates where and how information is made available. Customers can find most information about the costs and sources of energy on their bills and online. While this makes the access to information simple and straightforward, it does not guarantee that the information is provided in a “customer-friendly way” leading to deeper engagement and involvement. Furthermore, some customer groups may not have access to information online. While the Status Review concludes that much information is available, there may be a need to make some of this information more accessible so that customers can more easily and more frequently pick it up and act on it. This Status Review also includes information on different channels for provide information to customers and the need to ensure that available information can truly be accessed and used by customers.
The importance of this topic for energy customers is that reliable and trustworthy information on their energy supply – financially, technologically and geographically – provides them with more choice, more options and thus enhances market functioning. It can also foster more sustainable behaviour.
Status Review of Regulatory Aspects of Smart Metering, including an assessment of roll-out
What does a status review of smart metering mean?
This status review is a monitoring exercise. We want to verify the fulfilment of a previous report on smart metering recommendations. To which extent have EU Member States, national energy regulators and the industry applied those recommendations? The previous report was published by European Energy Regulators in 2011, and is called “Final Guidelines of Good Practice on Regulatory Aspects of Smart Metering for Electricity and Gas.” It contains a set of services for household and small business customers (as well as for those that both generate and consume electricity) regarding roll-out, cost benefit analysis, data security and integrity.
What does the report find?
We find that: - European Energy Regulators' recommendations are generally applied; - In electricity two countries have completed a smart meter roll-out so far, a further five have begun a roll-out, and many countries are yet to roll-out; - In gas the situation is much less advanced as one country has begun a roll-out; - The technical design of smart metering systems varies widely across countries. It varies because of different market designs and national preferences according to the results of the cost benefit analyses; despite the many years of assessing European standards, Europe unfortunately still faces a situation without a common standard for smart meters, as well as the lack of interoperability.
How does it work?
Apart from verifying the status of the smart metering recommendations, the status review can be used as a basis for developing further work aimed at putting customers at the heart of the European energy market.
Why is this important for energy customers? What is the impact on energy customers?
Reliability: Smart metering means that customers can get billing information based on accurate (instead of estimated) consumption on a frequent basis. Smart metering is a tool for customers to manage their energy consumption in a more conscious way. Customers then have to rely on a good service level with suitable offers. Affordability: The services connected to smart metering offers need to be affordable if the smart metering shall become attractive. Simplicity: To be able to make the right choice, offers must be presented in simple way. What do I gain as a customer? How do I do it? Protection and empowerment: All customers shall have the right to a meaningful choice that is certainly empowering.
