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.

 

 

Electricity supplier switching by consumers up 89% in 2019

Consumers switching electricity suppliers increased sharply by 89 percent in 2019, a report by RAE, the Regulatory Authority for Energy, has shown.

A total of 576,436 consumers, 8.5 percent of the 6,783,075 consumers in total, switched suppliers in 2019, up from 4.51 percent in 2018, the report showed.

This sharp rise in consumer switches was attributed to growing consumer confidence in independent electricity suppliers as well as the effectiveness of discounts and various other offers made available by these suppliers to attract customers. Put simply, competition in the Greek electricity market appears to be intensifying.

Household electricity consumers showed the greatest degree of mobility, followed by mid and high-voltage consumers, or businesses and industrial consumers, the RAE report observed.

In the mid-voltage category, 834 business and industrial consumers of 9,071 in total, or 9.19 percent, switched electricity suppliers in 2019, according to the report.

Despite the increased customer mobility, power utility PPC remained dominant in 2019, supplying electricity to 5,694,627 consumers, or 83.95 percent of the 6,783,075 in total, the report showed. In terms of consumption, PPC held a 71.13 percent share, supplying 27.7 million MWh last year.

Independent supplier Protergia, a member of the Mytilineos group, was ranked second in terms of total number of customers in 2019, supplying to 181,232 customers, the report noted.

Elpedison was ranked third with 171,143 customers, followed by Heron (140,812), Watt & Volt (127,364), Zenith (73,968), Volton (69,688), NRG (52,961), Fysiko Aerio (39,881), Volterra (35,748) and KEN (33,997).

A total of 24 independent suppliers are active in Greece’s electricity market.

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%).

EGL’s Zenith buy exceeding business objectives, further growth sought

Italian enterprise EGL’s (Eni gas e luce) decision to fully acquire the Zenith gas and electricity supply company, covering Greece’s north, constitutes part of a wider strategic objective for further growth as one of Europe’s biggest gas and electricity retailers, highly ranked company officials have noted.

The Zenith investment, exceeding targets, highlights the Greek market’s prospects, both in gas and electricity, Eni officials pointed out.

EGL, an Eni corporate group subsidiary active in retail electricity and natural gas, is supported by a 1,600-strong workforce and caters to over 9 million customers in Italy, Greece, France and Slovenia.

Eni gas e luce nowadays stands as Italy’s biggest retail supplier of natural gas and second-biggest supplier of electricity.

The company, placing particular emphasis on customer experience, quality of services and a richer experience of additional services, is introducing to the Greek market trends and innovations already implemented in more mature European energy markets.

Zenith will continue placing greater emphasis on strategic growth through investments aiming to widen the customer base rather than takeovers, company sources, both at the parent company and its Greek subsidiary, have underlined.

Plan to end NOME auctions raises fears among suppliers

A government plan to prematurely end the country’s NOME auctions has unsettled some of the Greek retail electricity market’s independent suppliers, who fear the absence of an effective transitional model until the establishment of the target model would expose them to unforeseen dangers.

Energy minister Costis Hatzidakis has declared he wants to abolish NOME auctions, including the year’s final session, scheduled for October 16, noting the measure – introduced by the previous government as a tool to help end power utility PPC’s market dominance – is forcing the state-controlled utility to sell wholesale electricity at below-cost levels and consequently further aggravating the troubled firm’s financial performance.

Electricity suppliers, not including the major vertically integrated players, have expressed concerns as a further delay in the implementation of the target model and launch of energy exchange markets is considered likely.

Some suppliers have asked their legal departments to examine possible moves.

“On the NOME auctions, we would like to point out that we are confident the ministry will find the fairest solution for healthy competition,” commented Federico Regola, CEO at Zenith. “We are open to discussing our experience with authorities in order to relay our experience for utilization and the proper functioning of the market to the benefit of consumers. We are monitoring developments and awaiting related announcements while also maintaining our legal rights, like all companies, as this issue does not only concern Zenith but the entire sector,” he continued.

 

Tougher inspection may delay DEPA-Shell deal, privatization

A recent takeover agreement between Greek gas utility DEPA and Shell concerning the former’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area could be delayed, if not forced to change, by local Competition Committee concerns over the deal’s impact on market competition. Subsequently, a privatization plan for DEPA could also be delayed.

The committee is considering launching a full-scale inspection on the resulting accumulation of power the agreement with Shell would offer DEPA, already holding a 51 percent majority in these Athens supply and distribution ventures prior to the deal.

According to sources, the gas utility is expecting a committee decision, on whether to conduct an in-depth investigation or clear the deal, on September 17. Should a full-scale inspection be launched, the committee will have 90 days to deliver a decision. If this period elapses, then the DEPA-Shell agreement will be automatically approved.

In July, DEPA announced it had agreed to acquire Shell’s 49 percent in the EPA Attiki gas supply and EDA Attiki gas distribution ventures for 150 million euros.

On another front, the Greek gas utility’s withdrawal from the Zenith gas supply company covering the country’s north, through the sale, for 57 million euros, of a 51 percent stake in this venture to Italy’s Eni, previously a minority partner with a 49 percent share, has been endorsed.

Minimal customer mobility registered in natural gas market

Little movement from one supplier to another has been observed in the country’s retail natural gas market despite the entry into this market by virtually all of the country’s electricity suppliers from the beginning of the year.

The capital’s Aerio Attikis and the north’s Zenith, both older gas suppliers, have lost a minimal amount of customers in their respective regions and are even managing to secure a small number of new supply contracts in each other’s regions.

Independent electricity suppliers seeking to also penetrate the country’s natural gas market have secured no more than 1,000 new supply contracts in total.

The lack of mobility witnessed in the gas market has been attributed to the lack of leeway available to new suppliers for appealing packages.

Retail natural gas prices are determined by wholesale price levels,  which change constantly and do not enable suppliers to guarantee specific price terms to prospective customers.

Major energy sector players such as the main power utility PPC and petroleum firm Motor Oil are expected to also enter Greece’s retail natural gas market within the next few weeks, while all players are preparing combined electricity-gas packages, a development that could prompt some mobility.

RAE approves gas supply license bid from PPC, seeking transformation

RAE, the Regulatory Authority for Energy, has approved a gas supply license application submitted by the main power utility PPC, energypress sources have informed, a move that essentially represents a first step in the power utility’s transformation from an electricity firm to a full-ranged energy group.

It now remains to be seen how the utility will opt to move in the natural gas market.

According to the same sources, PPC is still organizing its natural gas market entry with assistance from two consulting firms, Boston Consulting and Samaras & Associates, both preparing the utility’s related business plan. A finalized plan concerning combined electricity-and-gas packaged to be offered by PPC is expected to be ready by the summer.

The power utility is believed to be aiming for a natural gas market share of around 30 percent, given its gigantic customer base in the electricity market. Experience has shown that major electricity firms entering natural gas markets in other parts of Europe have achieved such market penetration levels.

The Greek gas market offers enormous potential. The current total of natural gas consumers, numbering 600,000, is expected to grow at a rate of between 30,000 and 40,000 new customers per month over the next few years. Of course, PPC will face tough competition in two seasoned natural gas firms, EPA Attiki, supplying the wider Athens area, and Zenith, supplying Thessaloniki and Thessaly. These rivals also intend to push for greater market shares.