Competition in retail electricity and gas markets is becoming more dynamic and delivering new types of retail deals and services to consumers as the market transforms to give consumers greater control over how they manage and use energy.
The Australian Energy Market Commission (AEMC) today released its third annual review of the state of competition in retail energy markets across the National Electricity Market which includes Queensland, New South Wales, Victoria, South Australia, Tasmania and the Australian Capital Territory.
The review found the benefits of shopping around regularly are now more substantial as the range of prices and services available grows.
But 50% of consumers still have not switched their electricity retailer or plan in the last five years and are not taking advantage of better deals now available in jurisdictions where the market is competitive.
Most consumers know competition means they have the option to switch and save but are still not aware of already available information on government-run comparison websites that would help them;
Research focussed on vulnerable customers showed customers who had switched their provider or their plan found the process to be easier than expected.
The 2016 Retail Competition Review assessed retail energy competition in each state and territory in the National Electricity Market with reference to the structural, regulatory and market characteristics which impact on consumers’ experience.
Overall, retail competition remains effective for electricity markets in South East Queensland, New South Wales, Victoria, and South Australia.
Electricity and gas retail competition is less effective in the Australian Capital Territory and effective competition is yet to emerge in Tasmania and regional Queensland.
There is effective competition in retail gas markets in New South Wales, Victoria and South Australia.
Competitive market indicators have remained steady or improved in jurisdictions with effective retail competition. They include:
Greater choice: New electricity retailers have entered and second tier retailers have gained market share, leading to declines in market concentration. For example, the number of electricity retailers in NSW has risen from 13 in 2014, to 22 in 2016, and from 17 to 22 in Victoria over the same period. Consumer satisfaction with the level of choice has risen 13 percentage points in three years.
Stable switching rates: Around 90 per cent of consumers surveyed are aware they can choose a different energy company. Around 30% are actively investigating their options and 19% switched electricity retailer in 2015.
Increased consumer satisfaction: The proportion of consumers reporting they are satisfied with their electricity retailer has increased to 73% (up from 69% in 2015 and 66% in 2014), while 7 % were dissatisfied in 2016. Being happy with their current retailer is the number one reason consumers give for not shopping around.