December 2015

The annual ACER-CEER Market Monitoring Report (MMR) analyses retail markets and consumer issues, gas and electricity wholesale market integration and network access issues in 2014. It provides an analysis of continuing barriers to further market integration.

The latest MMR (see here the MMR event video) reveals that despite some progress in the European wholesale market integration process, electricity and gas prices for EU households continued to rise.
On the positive side, market integration led to a wider choice of electricity and gas products for household consumers and consumers who switched suppliers in 2014 could save up to €400 in some EU capitals.

Wholesale markets:
The good news is that wholesale energy market integration progressed and wholesale energy prices further decreased in 2014. More renewables and decreasing gas demand (and oil prices) contributed to the fall in wholesale prices.

Cross-border trading in the day-ahead time frame became easier and more efficient with the extension of electricity “market coupling” to 28 out of the 40 borders in Europe, due to improved allocation of the cross-border transmission capacity used for trading electricity. On the gas side, wholesale gas prices decreased in 2014. There was progress in hub development and liquidity, particularly in North-West Europe.

Retail Markets:

Household electricity bills in the EU increased, on average, by 2.6% with respect to the previous year, and gas bills by 2.1%. Where final household prices increased the most, the price growth was driven primarily by non-energy components (i.e. network charges, taxes and levies, and value added tax) as opposed to the energy component of the bill.

Regulated end-user prices for households (a key barrier to competition) remained widespread across the EU: 14 countries still have regulated electricity prices; and 13 have regulated gas prices.
In spite of an increased switching trend among electricity and gas household consumers in the EU, switching rates remain low in most countries, which in turn lowers the competitive pressure on suppliers.  Consumers in the EU are yet fully benefiting from competition and energy market integration.

Consumer Rights:

Consumer protection measures were largely implemented across Europe. Nearly all EU countries have an electricity ‘supplier of last resort’. Disconnection rates were low. An alternative dispute settlement mechanism is available and free of charge for final household customers in 25 countries.
However, in many countries, information about switching was lacking on energy bills. Half of the complaints across Europe were related to price, contract or billing issues. Furthermore, the report found that the quality and timing of distribution services could be improved.