Gas supplier switching up 164% in newly liberalized gas market

A total of 20,134 gas company customers, 4.18 percent of 481,838 in total, switched suppliers in 2019, data provided by RAE, the Regulatory Authority for Energy, has shown.

This mobility highlights the Greek retail gas market’s heightened level of competition less than three years since its liberalization and the determination of customers to secure the best possible deals.

In 2018, when the country’s retail gas market was liberalized, 7,611 customers of 441,330 in total, a far lower 1.72 percent, switched gas suppliers.

These figures represent a 164 percent rise, between 2018 and 2019, of customers switching gas suppliers.

Businesses registered the greatest level of mobility, followed by household customers and industrial customers, in that order, both in terms of gas amounts used and number of supply connections.

The supplier switching rate in the household category was 4.12 percent in 2019, up from 1.69 percent in 2018. In the business category, 5.72 percent of consumers switched suppliers in 2019, up from 2.41 percent in 2018.

On the contrary, supplier switching in the industrial customer category fell sharply to 3.17 percent in 2019 from 8.78 percent in 2018.

In numbers, 19,180 household consumers of 465,018 in total changed gas suppliers in 2019. In the business category, 944 of 16,505 made switches to new suppliers last year. As for the industrial category, 10 of 315 customers moved to new gas suppliers in 2019.

Despite the increased level of customer mobility, two suppliers, Zenith and Fysiko Aerio, remained dominant, capturing market shares of 65.51 and 25.76 percent, respectively, in terms of number of connections, according to the RAE data. The two frontrunners were followed by Mytilineos (2.85%), Elpedison (2.05%) and NRG (1.16%).

These market shares and rankings differ when based on gas volume. Under these terms, Zenith’s share was 35.95 percent in 2019, while Fysiko Aerio captured a 31.13 percent share. They were followed by PPC (5.96%), Mytilineos (5.44%), Heron (5.25%), Elpedison (5.21%) and DEPA (3.51%), among a field of smaller players.

 

 

Natural gas bill payments down 30% in last two months

Natural gas bill payments have plunged by 30 percent over the past two-month period following a milder single-digit decline a month earlier, latest market data has shown.

Consumers have resorted to installment-based payback plans in far greater numbers during this two-month period of deterioration.

Suppliers, fearing a rise in unpaid receivables, are not hesitating to cut gas supply to customers who were already battling against energy debt prior to the pandemic and are now in deeper trouble. However, this supply-cut threat concerns a small percentage of customers.

Gas suppliers have yet to turn to the government for support measures, as was the case in the electricity sector. However, they may end up needing help in the form of low-interest loans, support mechanisms and other financial tools if the country’s tourism industry suffers a major setback this coming summer, as is feared.

Zenith and EPA Attiki (Fysiko Aerio) hold an 85.39 percent overall share of the country’s retail gas markets equipped with distribution networks – wider Athens area, Thessaloniki and Thessaly – data processed by energypress showed. Zenith leads with 46.14 percent and EPA Attiki follows with 39.25 percent.

EPA Thess, a former monopoly covering Thessaloniki and Thessaly, has lost approximately 15 percent of its market share to newly emerged rivals, the data showed. KEN, the biggest gainer, has captured 5.25 percent and is followed by Protergia (3.1%), Elpedison (1.91%), NRG (1.35%), Heron (1.05%), Watt+Volt (0.75%) and EFA (0.76%).

Suppliers dread bad debt of permanent business closures

Electricity and gas suppliers, fearing a new wave of bad debt that could balloon should retailers and enterprises currently in lockdown fail to reopen, have expressed their concerns to deputy energy minister Gerassimos Thomas in a virtual conference.

Consumers of all categories, including households, have increasingly struggled to pay their energy bills during the coronavirus pandemic. Overdue energy bills have increased by levels ranging from 20 to 35 percent, according to data forwarded by suppliers to RAE, the Regulatory Authority for Energy, and the energy ministry.

Besides fearing an eventual financial collapse of many retailers and businesses amid a protracted lockdown, authorities suspect some survivors could opt to relaunch their businesses under new tax file numbers in an effort to escape accumulated energy bill debt obligations.

The energy ministry is now seeking to establish a clearer picture on the energy bill collection records of suppliers as a means of shaping appropriate cash flow support measures.

A ministerial decision offsetting debt between energy suppliers and market operators will soon be signed, Thomas, the deputy energy minister, informed.

Gas market figures still sturdy, clearer picture in mid-April

Unpaid receivable figures have remained subdued in Greece’s gas market and sales are still steady despite the coronavirus pandemic’s wide financial effects.

This resilience has been attributed to the seasonal nature of Greece’s retail gas market, primarily serving heating needs between October and March, contrary to the wider use of gas use in other countries.

The coronavirus crisis emerged towards the end of winter season’s heating needs, a lucky break for the sector as suppliers are not expected to incur household-related losses.

However, other consumer categories remain a concern for gas supply companies. Retailers, restaurants, tourism sector enterprises as well as countless other enterprises forced to disrupt or significantly scale down their operations could have trouble servicing gas bills.

The extent to which such hard-hit businesses will be able to service their gas bills for the rest of this year remains unclear. Gas bill payment records could deteriorate between now and December.

A clearer market picture of the coronavirus pandemic’s financial impact on Greece’s gas market is expected to emerge around mid-April, when the lockdown of the economy will have clocked up one month.

The government has promised support measures for both the gas and electricity sectors. The energy ministry is working on establishing a support mechanism.

It is estimated the country’s energy suppliers will require a working capital sum of around one billion euros, well over an initial estimate of 650 million euros, for liquidity protection if the lockdown stretches beyond June.

 

Electricity, gas supply company employees valid for allowance

Electricity and gas supply company employees are being added the government’s long list of enterprises whose staff members are each entitled to state allowances of 800 euros as a result of the coronavirus pandemic’s ramifications.

Furthermore, a government decision also making electricity supply companies eligible for a guarantees mechanism, established as a protective umbrella by the development ministry, is also expected. This measure could be announced today.

Through this double move, the government intends to protect both energy supply companies and their employees from a liquidity crisis now threatening the sector. Its tightening liquidity is expected to worsen as a result of an imminent loss of tourism-related earnings.

April will be crucial month as it will reveal the size of a new wave of electricity bill debtors, a government official told energypress.

The government’s allowance program now also being made available to the energy sector will offer working capital worth up to 3 billion euros. The Greek State will cover 80 percent of this funding program while the other 20 percent will be provided by banks.

DEPA set to rebate customers for Botas legal battle cost

Gas utility DEPA is preparing to rebate customers who had been burdened with costs linked to an older international court verdict against the utility in a now-resolved case with Botas, Turkey’s state-run crude oil and gas company.

The utility’s gas-supplier customers need support as they do battle amid toughened market conditions resulting from the coronavirus pandemic’s lockdown.

Earlier this month, on March 5, DEPA received a 230 million-euro retroactive sum from Botas after Stockholm’s ICC (International Court of Arbitration) vindicated the Greek utility in its overcharging case against the Turkish energy company.

The dispute began when DEPA claimed the Turkish company was overcharging the Greek utility for its purchases of Azerbaijani natural gas delivered through Turkish pipelines since 2011.

DEPA will draw from this 230 million-euro sum to rebate its customers. The utility has completed the initiative’s preparations and will start delivering payments next week, sources informed.

The biggest amount will go to customers who have supply contracts with DEPA, as they effectively took on the cost of a 180 million-euro amount paid by the utility to Botas as a result of an older unfavorable court decision against the Greek utility.

Some of DEPA’s customers had challenged this demand and avoided making payments. As a result, DEPA will be left with a considerable sum once all rebates have been made.

Thes leftover amount will prove useful as DEPA has take-or-pay clause payments to make to Botas and Gazprom for 2019.

Energy suppliers to receive Development Bank support

Electricity and gas supply firms, pressured by the financial repercussions of the coronavirus pandemic, are among the country’s enterprises to be offered liquidity support by a prospective Development Bank that will operate as a guarantee fund.

The Ministry of Development and Investment intends to soon establish this new bank using EU National Strategic Reference Framework (NSRF) funds.

Talks are in progress for the establishment of a “guarantee mechanism, for electricity companies, providing working capital,” energy minister Costis Hatzidakis noted just days ago.

The plan was also discussed at a meeting between Development and Investment Minister Adonis Georgiadis, CEOs of Greek banks and the secretary-general of the Hellenic Bank Association.

The bank association is now expected to submit its observations on the plan’s draft law. According to the plan, Greek State guarantees will cover 80 percent of each loan granted, while banks will cover the remaining 20 percent.

Growing number of energy consumers shifting amid rising competition

The country’s electricity and natural gas markets are undergoing drastic change. Tens of thousands of electricity consumers are moving to new suppliers with far less hesitation as a result of more competitive offers. Also, gas utility DEPA’s market share is sliding as energy companies are now engaging directly in natural gas orders without any intermediate involvement from the utility, besides trading in retail.

Some 627,000 households and small-to-medium businesses changed electricity supplier in 2019, a record level since the market’s liberalization and an 85 percent increase compared to 338,000 shifts in 2018, according to data presented by RAE (Regulatory Authority for Energy) official Nektaria Karakatsani at a recent industry event, Athens Energy Dialogues.

At least 20 electricity retailers offering over 40 products as a means of broadening their customer base took on these shifting consumers.

At present, at least 800,000 consumers are supplied electricity by independent firms. This, it should be noted, remains a small percentage of the Greek market’s 7.4 million total.

In the gas market, DEPA’s wholesale market share dropped to 33 percent in 2019 from 58 percent in 2018, according to the data presented by Karakatsani, the RAE official.

Also, DEPA’s share of total gas imports dropped to 42 percent in 2019 from 72 percent in the previous year.

 

Price-comparing service for electricity, gas offers nearing launch

A price-comparing website carrying retail electricity and natural gas offers is expected to become available to consumers in ten to fifteen days.

RAE, the Regulatory Authority for Energy, plans to have launched its price observatory, catering to households and small-sized businesses, within the first fifteen days of November, energypress sources informed.

Minor technical details concerning the website are currently being worked on ahead of its imminent launch, the sources said.

The presentation, on the one platform, of all retail electricity and gas supply offers promises to be a useful price-comparison tool for consumers that will assist choices.

Many consumers are believed to be confused by the array of offers currently available and, as a result, hesitant to make decisions.

All suppliers have provided their current offers, requested by RAE for the website, sources added.

Independent suppliers opening own outlets for market gains

The country’s independent electricity and natural gas supply companies are, one by one, launching their own retail outlets as a means of bolstering their brand names and providing improved customer services for market gains.

This comes as an extra step following retail collaborations with electronic and telecommunication retailers as well as efforts to lure new customers through call centers and company websites.

Market research conducted by some of these energy sector retailers has indicated a need for improved customer services.

Also GDPR personal data protection restrictions imposed by the European Commission in the EU has limited the ability of firms to reach prospective new customers over the telephone.

In the retail electricity market, power utility PCC remains the dominant player.

The Mytilineos group’s Protergia opened its first Thessaloniki retail outlet last September and also operates outlets in Athens’ Neo Iraklio and Nea Erythrea suburbs.

Heron plans to open its first Athens outlet (140 Kifissias Ave) on June 10. The company, a member of the GEK Terna group, already operates two stores in Thiva (central Greece) and Crete.

Elpedison launched a Thessaloniki outlet on May 21 and also operates a store at 283 Kifissias Ave in Athens.

Watt+Volt is set to launch an outlet in the capital’s Halandri district in a few days and plans to soon launch a further four outlets. It currently operates 20 outlets in 18 cities around the country.

GDPR rule hampering efforts of independent energy suppliers

The European Commission’s General Data Protection Regulation (GDPR), whose implementation earlier this year, on May 25, has limited enterprises heavily reliant on telephone marketing practices for business, represents an additional difficulty for independent electricity and natural gas suppliers seeking to make market share gains but already impeded by narrow profit margins.

The GDPR measure, carrying hefty fines for offenders, has set back the ability of electricity and natural gas suppliers to communicate directly with potential customers via telephone, seen as a crucial marketing tool prior to the data protection regulation’s introduction.

Consumers have already filed legal cases against certain independent suppliers for violations of the new EU data protection regulation. Legal department officials of energy supply firms have needed to counter an increasing number of cases and expect more to come.

The new rule forbids personal data from being used by enterprises if consumers have not previously provided their full consent. Violators face hefty penalties reaching as much as 20 million euros or 4 percent of company revenues.

 

New retail gas market players restrained by various obstacles

Rivals of EPA Attiki, the dominant natural gas supplier in the wider Athens area, have confronted various obstacles in their efforts to gain ground since the beginning of the year, when this market was liberalized.

Application processing delays and bureaucratic procedures faced by consumers when seeking to transfer from one supplier to another are among the obstacles subduing the efforts of new players.

Certain smaller suppliers have already lodged complaints to RAE, the Regulatory Authority for Energy, while others are preparing to do so.

Problems with a four-digit hotline for the sector have also been reported. In addition, the market operator has reportedly avoided accepting customer transfer applications, citing various reasons. Amid the subsequent delays, many customers have ended up staying with EPA Attiki.

Also, new tenants moving into properties have had difficulties registering with gas suppliers of their choice as previous property tenants have departed while owing gas bill amounts to EPA Attiki. Gas supply applications have been rejected in such cases despite the different tax file numbers of previous and new tenants.

The various problems will take time to resolve, while test runs should have been held in December, one market official stressed.

It should be pointed out that most gas suppliers are using the current year to test the waters for a measure of the market’s potential and have yet to make full-fledged efforts.

New players are expected to launch promotional campaigns in May and June. These efforts should peak around autumn, when the real battle for market shares in the liberalized retail natural gas market is expected to commence.