Utility customer switching on the increase globally


Philip Lewis,
Managing Director,
VaasaETT Global
Energy Think Tank
Helsinki, Finland — (METERING.COM) — October 30, 2008 – Overall, global utility switching activity is on the increase, with more active markets than ever before, but Australia continues as the most active region in the world, the Utility Customer Switching Research Project has found.

The project’s latest World Energy Retail Market Ranking places the top four “hot” markets (with annual switching approximately 15 percent or higher) as Victoria and South Australia (Australia), Great Britain, and Wallonia (Belgium).

Continuing to hold the top spot, Victoria’s switch rate, equivalent to more than one-quarter of the total market, was the most active year ever recorded for any market in the world. However, Great Britain remains the most consistent hot market of all time, having achieved a “hot” level of switching every year since 2000.

Texas continues to lead the way in the United States and Norway in the Nordic market, falling into the next, “warm active”, category (annual switching between 9.5 and 15 percent), along with New South Wales and Queensland (Australia), New Zealand and Sweden.

The “active” markets (annual switching between 3.5 and 9.5 percent) experienced mixed fortunes in 2007 with some rising and some falling in terms of switching activity. Noteworthy is that Germany is finally heating up, becoming an active market for the first time in 2007-2008. Other markets in this category are Alberta, Netherlands, Flanders (Belgium) and Finland.

Finally in the “cool active” market category (annual switching between 1 and 3.5 percent) are Denmark, New York, Spain, Italy, Slovenia, Austria and Ireland. These are something of a mixed bunch in terms of the determinants of their activity, often typified by insufficient competitive opportunities for new entrants. For example in Ireland, ranking 22nd in the 2007 rankings, and 14th in Europe, market dominance and a powerful historically based affinity to the incumbent has arguably been key.

Noteworthy also from the review is that average European switching rates were less than 4 percent compared with 13 percent for the rest of the world, with price caps remaining a major hindrance to competition.

The Utility Customer Switching Research Project is a project of the VaasaETT Global Energy Think Tank and Peace CIS by Hansen Technologies, and is supported by Capgemini. The Project monitors switch rates and trends in the more than 50 fully liberalized energy retail markets worldwide.