2016 Electricity and Gas Retail Markets Annual Report

Transcription

1 2016 Electricity and Gas Retail Markets Annual Report Decision / Information Paper Reference: CER/17144 Date Published: 20/06/2017 1

2 Executive Summary The purpose of this annual report is to provide consumers, industry and other interested stakeholders with relevant information on the developments of competition in the electricity and gas retail markets in The annual report draws on a range data sources from the past year and provides an overview of the key developments in the retail market. Market monitoring forms an important part of the CER s activities. This information helps to inform new policy and in the assessment of existing regulations. The information provided in this report aims to give an insight into how the retail market is functioning and any specific issues that need to be addressed. The report draws on additional information from a number of key sources including CER decision papers, stakeholder inputs, industry discussions, audit findings and the CER s consumer survey. The report begins with an overview of the supply side of the retail market including market developments and new entrants in The customer focused side of the retail markets is then considered, including the components of customers bills and final retail prices. The next part of this report looks at the outcomes of these combined market indicators for consumers. Specifically, it focuses on the quality of services provided by suppliers which is analysed as part of the CER s audits as well as through analysis of consumer protection which includes a reduced number of disconnections and effective PAYG and debt flagging processes. Key findings from the CER s consumer survey and audits are also presented here. Customer engagement in terms of switching and the status of supplier s market share at the end of 2016 and trends over time is then presented. 2

3 Key Messages: Market Development Since deregulation of the electricity and gas markets, a number of new suppliers have entered the market, with a total of 9 electricity suppliers and 8 gas suppliers active at present. There are now 12 suppliers across the energy markets overall, with many suppliers operating in a range of market segments. Energy Prices There are three main components of prices, including energy, network and supply costs. Energy and supply costs comprise a large proportion of the final price in Ireland. A significant share of this is accounted for by the cost of fossil fuels, particularly gas. The average wholesale price of gas and electricity was lower in 2016 than for the previous five years, but increased in the last quarter of In 2016, price driven competition intensified in the electricity and gas markets, with price reductions across all suppliers for both discounted and standard plans. In 2016, the average price for the main electricity consumption band (DD) in Ireland was 5.73% below the Euro Area average. Average price decreased in the dominant consumption band (DD) from semester to semester by 2.4%. The average price for the main gas consumption band (D2) in Ireland was equal to the Euro Area average. Average price decreased in the dominant consumption band (D2) from semester to semester by 14.56%. Energia offered the cheapest available discount plan for electricity at the end of 2016 with an annual average bill of 770. Bord Gáis Energy offered the cheapest available standard plan with an annual average bill of Annual average bills are based on the revised typical annual consumption value of 4,200kWh. Flogas offered the cheapest available discount plan for gas at the end of 2016 with an annual average bill of Electric Ireland offered the cheapest available standard plan with an annual average bill of

4 Annual average bills are based on the revised typical annual consumption value of 11,000kWh. Customer Protection There were 648 debt flags raised in the electricity market in Q (corresponding to approximately 1.32% of all Change of Supplier (CoS) requests in that quarter) and 241 debt flags raised in the gas market in Q (corresponding to 1% of gas switches). The percentage of debt flagged CoS requests cancelled has fluctuated between 37% and 55% between 2015 and In 2016, there were 5,846 PAYG financial hardship meters installed for electricity and 4,423 for gas. This compares to 11,806 and 6,382 installed in 2015 respectively. The total number of disconnections between Q and Q was 6,879 for electricity and 2,787 for gas. The number of disconnections has continued to reduce for domestic electricity and gas customers, but nondomestic disconnections have increased. The number of complaints as a % of total customers across domestic and non-domestic electricity and gas in 2016 was 0.7%. Customer Switching and Engagement The 2016 consumer survey recorded high levels of customer satisfaction with the energy market. Customer awareness remains focussed on incumbent suppliers for both gas and electricity. However, awareness of new entrants is increasing. The 2016 survey asked questions about smart metering for the first time, and found that customers are interested in smart meters and the additional services and benefits they can offer The total number of switches completed in the electricity market in 2016 was 317,719. This represented an increase from 2015, during which time 303,187 customers switched. The total number of switches completed in the gas market in 2016 was 93,434. This represented a decrease in the total number compared to 2015 where 106,862 switches were completed. 4

5 New data on internal switching and dual fuel switching shows that there are also a significant number of internal switches on a monthly basis. Approximately 20-30% of switches per month are dual fuel switches. Market Share In Q4 2016, Electric Ireland held the greatest domestic electricity market share with 51.35% of total consumption. However, its market share decreased by 3.36% between 2015 and 2016 in terms of consumption. Energia gained the most market share between Q and Q4 2016, with an increase of 1.71% of market share. SSE Airtricity lost 1.35% of market share by consumption between Q and Q Bord Gáis Energy held the greatest market share in the domestic gas market with 50.97% of the market by customer numbers. This was followed by Electric Ireland with 22.75%, SSE Airtricity with 14.27%, Energia with 5.86% and Flogas with 5.74%. 5

6 Public/ Customer Impact Statement This document is divided into four sections, each one focused on particular aspects of the energy retail market. These sections relate to the development of the market, energy prices, customer protection and switching and market share. Each section aims to give an answer to the questions below and an overview of changes up to the end of Who can supply you with energy? What goes into your bill? What protection do you have as an energy customer? How has the market developed in the last year? Each of these aspects considers a number of indicators that the CER collects from both the network companies and Suppliers on a monthly, quarterly or annual basis. These are intended to reflect how the market has developed in the last year across a range of metrics that are directly related to both suppliers and to end customers. Who can supply you with energy? What goes into your bill? What protection do you have as an energy customer? How has the market developed in the last year? Chapter 2 Energy Market Structure and Developments Chapter 3 Electricity and Gas Price Components Chapter 4 Supplier Prices in Ireland Chapter 5 Consumer Survey 2016 Chapter 6 Consumer Protection Chapter 7 Audits of Compliance Chapter 8 Customer Switching Chapter 9 Market Share 6

7 Table of Contents Executive Summary... 2 Public/ Customer Impact Statement... 6 Table of Contents... 7 Glossary of Terms and Abbreviations Introduction Background The Commission for Energy Regulation Objectives of this Report Related Documents Energy Market Structure and Developments Introduction Market Developments Active Suppliers and New Entrants Electricity and Gas Price Components Introduction Components of Prices in Ireland Components of a final retail bill Wholesale Energy Costs Network Costs Supply Costs Taxes and levies Supplier Prices in Ireland Revised typical annual consumption values Comparison of prices at beginning of 2016 and end of Analysis of average electricity and gas prices Domestic Electricity Business Electricity Domestic Gas Business Gas Summary Prices Consumer Survey

8 Introduction Summary Consumer Survey Customer Protection Introduction Debt Flagging Arrears and Payment Plans Pay as You Go Meters PAYG Disconnections Disconnections Total Disconnections Domestic and Non Domestic Electricity Market Disconnections Domestic and non-domestic Gas Market Disconnections Vacant premises proxy Customer Complaints Summary Customer Protection Audits of Compliance Introduction Audit of Deposit Requirements in the Supplier Handbook Audit of Price Comparison Websites Customer Switching Introduction Electricity Market Switching and New Registrations Total Switching Switching by customer category Net Switching by Supplier New Registrations Internal Switching in Electricity and Gas Gas Market Switching and New Registrations Total Switching Switching by category Net Switching by Supplier New Registrations Dual Fuel Switching Defaults to Standard Tariffs Summary Customer Switching Market Share Consumption and Customer Numbers

9 Introduction Electricity Market Overall trends in retail electricity Domestic Electricity Market Small-sized business electricity market Medium-Sized Business Electricity Market Large Energy Users (LEUs) Gas Market Overall trends in retail gas Domestic gas market Industrial and commercial (IC) Gas market Fuel Variation Tariff (FVT) Gas market Regulated Tariff Formula (RTF) Gas market Summary Market Share Conclusion Chapter 4 Appendix Eurostat Electricity and Gas Prices Chapter 5 Appendix Pay as You Go Meters PAYG Chapter 7 Appendix

10 Glossary of Terms and Abbreviations Abbreviation or Term CER MRSO GNI SEM NBP LNG NIAUR SMP EWIC TUoS DUoS PSO SEAI SME PAYG CoS NPA DM Definition or Meaning Commission for Energy Regulation Meter Registration System Operator Gas Networks Ireland Single Electricity Market National Balancing Point Liquefied Natural Gas Northern Ireland Authority for Utility Regulation System Marginal Price East West Interconnector Transmission Use of System Distribution Use of System Public Service Obligation Sustainable Energy Authority of Ireland Small-Medium Enterprises Pay-As-You-Go Change of Supplier Non-Payment of Account Disconnect Meter 10

11 NPA CTSR CCT BGE LEU MPRN GPRN MWhs GWhs kwhs NDM IC FVT RFT LDM DM LDM NI RoI Non-Payment of Account Street Isolation Customer Complaints Team Bord Gáis Energy Large Energy User Meter Point Reference Number Gas Point Reference Number Megawatt Hours Gigawatt Hours Kilowatt Hours Non-Daily Metered Industrial and Commercial Fuel Variation Tariff Regulated Tariff Formula Large Daily Metered Daily Metered Large Daily Metered Northern Ireland Republic of Ireland 11

12 1 Introduction Background The Commission for Energy Regulation The Commission for Energy Regulation (CER) is Ireland s independent energy and water regulator. The CER was established in 1999 and now has a wide range of economic, customer protection and safety responsibilities in energy. The CER is also the regulator of Ireland s public water and wastewater system. Our mission is to regulate water, energy and safety in the public interest. Further information on the CER s role and relevant legislation can be found on the CER s website at Objectives of this Report The purpose of this paper is to provide industry and interested stakeholders with relevant information on the developments of competition in the electricity and gas retail markets in This report analyses trends in a number of key indicators, including consumption, customer numbers, internal and external switching, pay-as-you-go meters, debt flagging, disconnections and prices. It also outlines the key developments in the market. The primary sources of data in this report are: Meter Registration System Operator (MRSO), ESB Networks and Gas Networks Ireland (GNI) as well as reporting requirements from Suppliers Related Documents Information on the CER s role and relevant legislation can be found on the CER s website at 12

13 WHO CAN SUPPLY YOU WITH ENERGY? WHO CAN SUPPLY YOU WITH ENERGY? 13

14 WHO CAN SUPPLY YOU WITH ENERGY? 2 Energy Market Structure and Developments Introduction There are now nine suppliers active in the electricity market and eight suppliers active in the gas market. During 2016 a number of established suppliers entered into new market segments. A new supplier entered the domestic electricity market in early This section contains information on the structure of the electricity and gas retail markets. The main market segments and the suppliers operating in each are identified and key developments in the supply side of the retail market are discussed. Where a supplier intends to enter the market there are specific regulatory steps that must be considered. In a well-functioning competitive market, suppliers should be able to enter the market and grow their customer base or market share. New entrants to the electricity and gas retail markets can help to improve quality of services, create new offers and drive competitive prices. New entrants can also introduce new and innovative ways of operating and create competitive pressures which force existing suppliers to adapt new strategies. However, as with any market there are a number of requirements that must be met before a new Supplier can begin obtaining customers. This includes procuring wholesale energy or gas from the market, obtaining access to the networks on behalf of customer as well as establishing customer services for billing customers and dealing with queries. 14

15 WHO CAN SUPPLY YOU WITH ENERGY? Start-up costs Supply licence or Shipper licence Regulatory requirements Access to the Wholesale market Supplier Handbook IT, Personnel, billing Pre requisite to use gas anbd electricty networks Market Developments Table 2.1, Market Entry Requirements The following table outlines some key developments in terms of market entry in the electricity and gas retail markets over time. Key Retail Market Developments Year Electricity Gas 2005 February: Full market opening. Open to competition Single Electricity Market developed Airtricity enters domestic electricity market February: Bord Gáis Energy enters domestic electricity market October: Business market segments deregulated. July: Full market opening. Open to competition. Flogas enters domestic gas market. PAYG meters for financial hardship & lifestyle choice introduced. May: Airtricity enters domestic gas market. 15

16 WHO CAN SUPPLY YOU WITH ENERGY? 2011 April: Domestic market segment deregulated October: Debt flagging process introduced. October: New PAYG meters for financial hardship introduced January: Prepaypower enters domestic market with supplierled lifestyle choice prepayment model. March: First price comparison website, Bonkers, accredited by CER. July: Supplier Handbook published, outlining minimum service levels that suppliers must provide customers with. October: Harmonised retail systems between NI & RoI May: Second price comparison website, USwitch, accredited by CER. July: Pinergy enters domestic market with supplier-led lifestyle choice prepayment model 2014 January: Energia enters domestic electricity market 2015 Panda Power enters the domestic electricity market 2016 Flogas enters non-domestic electricity market April: Electric Ireland enters domestic gas market. October: Business market segments deregulated. October: Debt flagging process introduced. March: First price comparison website, Bonkers, accredited by CER. July: Supplier Handbook published, outlining minimum service levels that suppliers must provide customers with. April: Decision on criteria for the deregulation of domestic gas. May: Second price comparison website, USwitch, accredited by CER. January: Energia enters domestic gas market. July: BGE price deregulated in the domestic market. PrePayPower Ltd. Licensed to enter the domestic gas market Be Energy enters the domestic electricity market Table 2.2 Timeline of key retail market developments

17 WHO CAN SUPPLY YOU WITH ENERGY? Number of Suppliers Electricity Gas Figure 2.1 market entry over time Active Suppliers and New Entrants Since deregulation, (between 2011 and 2014) a number of new suppliers have entered the market. This includes Energia, PrePayPower, Pinergy, Panda Power and Be Energy. Recently Panda Power increased their market share to above 1% which is the threshold at which the CER begins reporting on suppliers through market monitoring Electric Ireland (Electricity and Gas) SSE Airitricity (Electricity and Gas) Bord Gáis Energy (Electricity and Gas) Flogas (Gas) Electricity market fully deregulated 2012 Pinergy PrePayPower (Electricty) (Electricity) Panda Energia (Electricity) (Electricity and Gas) Gas market fully deregulated Be Energy Flogas (Electrictiy) (Electricity) PrePayPower (Gas) 2017 Figure 2.2 Market Developments 17

18 WHO CAN SUPPLY YOU WITH ENERGY? In the last number of years a range of smaller suppliers have entered the market, and taken market share from the previous incumbents. Although for both electricity and gas the incumbent suppliers still retain circa 52% of the electricity and 51% of the gas domestic markets, the range of smaller suppliers entering the market in the market indicates that smaller suppliers can successfully capture market share Market share of Incumbent vs new suppliers 46 Incumbent All other Suppliers Electricity Gas Figure 2.3 Market share of Incumbent vs new suppliers The main suppliers in the electricity and gas retail markets are identified in the table below, along with an indication of which markets they are active in. Bord Gáis Energy Electric Ireland Energia SSE Airtricity Flogas PrePayPower Pinergy Panda Power Be Energy Vayu Gazprom Go Power (LCC) Domestic Electricity Non-domestic Electricity Table 2.3 Active markets by supplier Domestic Gas Non-Domestic Gas 18

19 WHAT GOES INTO YOUR BILL? WHAT GOES INTO YOUR BILL? 19

20 WHAT GOES INTO YOUR BILL? 3 Electricity and Gas Price Components Introduction There are many factors to consider in analysing trends and levels of prices in Ireland. Specific market conditions may result in a large proportion of price changes being outside of the control of (or external to) suppliers and other stakeholders in Ireland. Notwithstanding these external factors, it is important to ensure that prices are competitive and set in a transparent way for customers. This section outlines the components of end user price and identifies the recent trend in energy prices in Ireland. It also identifies innovations in the market and the range of offers available in Components of Prices in Ireland Energy prices in Ireland are made up of a number of different components, each driven by differing factors. Prices are based on costs incurred by a supplier in serving its customer base. The following diagram indicates the key components that comprise retail energy prices in Ireland and the key external/internal factors that impact on each component: Cost of distribution and transmission Investment in new infrastructure and maintenance of the network costs faced by supplier in supplying energy: labour Operational margins Obligatory costs Network costs Supply costs Public service obligation Carbon tax VAT rate Taxes and Levies Wholesale costs energy costs (including impact of exchange rates) capacity costs & costs of operating generators market operator cost 20

21 WHAT GOES INTO YOUR BILL? Figure 3.1 Composition of energy prices Components of a final retail bill Before electricity or gas is delivered to the final customer s home it passes through a number of stages. Therefore, the final retail price seen on a bill reflects the generation or extraction of energy, the selling of that energy on wholesale markets, the cost of delivery to a household and the cost to serve the customer. Below illustrates the various stages in the energy supply chain. Wholesale Cost Network Costs Supply Costs Levies and Taxes Final Retail Price Upstream Wholesale Market Networks Suppliers Gas is extracted from A virtual hub Gas Shippers pay The supply chain production fields where gas is the network operator ends when Gas globally and within Ireland. It can be bought and sold for delivery. to enter and exit gas onto the transmission Suppliers compete to sell the gas to transported via pipelines and distribution customers. or LNG ships. systems. Electricity is generated Generators bid Suppliers pay the The supply chain from a number of their costs into network operator to ends when Electricity sources including coal, gas, wind and hydro. Ireland also imports and exports electricity to the SEM and half hourly prices are formed. transmit energy through the wires in the network. Suppliers compete to sell electricity to customers. Britain via interconnectors. 21

22 WHAT GOES INTO YOUR BILL? Wholesale Energy Costs One of the primary components of final retail prices is the cost of wholesale energy. The variation in wholesale market prices is outside the control of suppliers and the CER. As the Irish energy mix is highly dependent on gas, this is a major factor in determining final retail prices. Up until the end of 2015 Ireland imported circa. 95% of all gas requirements from Britain via subsea interconnectors. Therefore the wholesale price of gas in Ireland was set by reference to the wholesale price at the trading hub in Britain (National Balancing Point or NBP) plus the cost of transport to Ireland via the interconnectors. In December 2015, commercial gas from the Corrib gas fields in Mayo began production and now provides up to 60% of peak day gas demand in Ireland. Although Ireland now has indigenous gas sources, the wholesale price will continue to be set by reference to the wholesale price at the NBP. As gas is sold for delivery at different times, suppliers develop hedging strategies which aim to smooth the impact of buying gas at different prices and allow price stability for customers. This can include Month Ahead, Day Ahead and Within Day products. Wholesale gas prices at the NBP are sold in pence/therm and at the end of December 2016 was 0.55/therm which is an increase of 15.96% versus the previous year. The graph below shows the month-on-month change in NBP prices between January 2016 and February NBP Day Ahead Gas ( /therm) Figure 3.2 Wholesale gas prices are set in Sterling. Therefore currency fluctuations influence wholesale gas prices. Year-on-Year the Euro has risen in value by circa 10% against Sterling which helps to buffer any fluctuations in wholesale gas prices. 22

23 WHAT GOES INTO YOUR BILL? Euro to Sterling Figure 3.3 There are a number of reasons for gas price fluctuation. As the NBP is a liquid market, it is subject to supply and demand dynamics both within Europe and more globally. Since 2014, global gas prices began to decline, with a day ahead average of 0.62 per therm versus 0.80 per therm in Gas is a globally sourced commodity, and European supplies come from a number of sources. The below diagram illustrates the range of countries that supply Europe. A number of global events have occurred recently which boosted gas supply. This included the United States moving to being a gas exporter, new LNG exports coming on stream in Australia and Papua New Guinea. In addition, demand for gas decreased in Asia, particularly in Japan where gas had been substituting nuclear power generation. Supply routes also play an important role. For example, the widening of the Panama Canal now allows for South American LNG to access European markets. It should be noted that in the case of Ireland, since 2016 with Corrib gas on stream the dominant supply source is indigenous gas, with imported gas via the subsea interconnectors supplying the remaining requirements. 23

24 WHAT GOES INTO YOUR BILL? Gas Supplies Norway Ukraine Russia Belarus Qatar Other 8% 14% 18% 15% 31% 14% Figure 3.4 The wholesale electricity market in Ireland is jointly regulated by the CER and the Northern Ireland Authority for Utility Regulation (NIAUR). This market is known as the Single Electricity Market or SEM. The SEM Includes a centralised liquid spot market where electricity is bought and sold. Suppliers purchase their requirements in half hour periods and pay the System Marginal Price (SMP). As a large proportion of electricity requirements are generated from natural gas there is a correlation between natural gas prices and SMP in electricity. In addition, the SEM has interconnection with the British wholesale market via the Moyle Interconnector and the East West Interconnector (EWIC) which can influence the price. The graph below illustrates the SMP spot price between January 2016 and February It broadly reflects a similar rise in wholesale gas prices in Ireland SMP /MWh Figure

25 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 SMP Euro/MWh WHAT GOES INTO YOUR BILL? Variations in global prices are outside the control of suppliers in Ireland. These result in Irish-based energy supply companies developing hedging strategies that allow them to minimise the impact of sudden energy price shifts. This sets the price that suppliers pay for energy over a certain period. While it serves to increase price stability it means that there is a lag in the change in prices at the wholesale and retail level. The SEM includes a centralised gross pool (or spot) market which is fully liquid and electricity is bought and sold through a market clearing mechanism. Suppliers purchasing energy from the pool pay the system marginal price for each trading period. The Regulatory Authorities publish quarterly reports that show changes in fuel and carbon prices which provide transparency to the market. The figure below shows the price of electricity in this centralised gross pool market in the SEM between 2012 and 2016, along with the average price across each year SMP /MWh SMP Figure 3.6 The National Balancing Point (the trading hub for gas in Britain) price in pence per therm of gas has seen a decline since 2014, but increased towards the end of The figure below shows the change in day ahead gas prices over time at the NPB (National Balancing Point), the main point where gas for Ireland is traded. It also shows the average price between 2012 and

26 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Gas Euro/therm WHAT GOES INTO YOUR BILL? NBP Day Ahead Gas ( /therm) NBP Day Ahead Gas ( /therm) Figure 3.7 Figures 4.3 and 4.4 demonstrate that while wholesale prices have fallen between 2014 and 2015, there have been large fluctuations in price throughout each year, and prices increased towards the end of This trend of increasing wholesale prices continued in the first part of Network Costs Network providers in Ireland are monopoly service providers. Therefore, the revenues they are permitted to earn and the tariffs they may charge are the subject of regulation by the CER. This ensures that the investments made are efficient and in the interest of customers. Network activities such as electricity transmission and distribution are considered to be natural monopolies requiring price regulation. The CER undertake revenue reviews known as Price Controls or Price Reviews for EirGrid and ESB Networks in electricity, and for Gas Networks Ireland in gas. These revenue reviews consider the costs of developing, maintaining and operating the electricity and gas systems. On the basis of these five yearly revenue controls, the CER approves the level of charges that the network operators may levy. 26

27 WHAT GOES INTO YOUR BILL? Company Responsibility How their revenues are recovered? Transmission System Operator Plans the development of the transmission network Transmission Use of System (TUoS) Charges A subsidiary within ESB Group Finances, builds and maintains the transmission system Finances, builds operates, maintains and develops the distribution system Distribution Use of System ( DUoS) charges Transmission System Operator Distribution System Operator Develops, plans and operates the transmission and distribution systems Capacity Charges Commodity Charges Each supplier is charged on a per customer basis for access to the electricity or gas networks. Each supplier has discretion in terms of how they pass these costs through to their final customers. In the last number of years for electricity there has been an increase in the network component of the final retail bill. Between 2015 and 2016 the network element increased by 5%. This reflects additional investment in the network, in particular to facilitate increasing levels of renewable generation. Gas distribution tariffs increased marginally by 0.2% between 2015 and 2016, whereas gas transmission tariffs fell by 1.3% in the same period. 27

28 WHAT GOES INTO YOUR BILL? Supply Costs There are a number of operating costs faced by Suppliers including obligatory costs such as government policy and regulatory costs. In addition, there are costs to serve customers for aspects such cost as advertising, customer care and billing. In February 2017, the CER published its Review of Competition in the Electricity and Gas Retail Markets. This paper concluded that whilst the CER had an understanding of the drivers of wholesale and network costs, the same understanding of the cost drivers of Supply Costs was not evidenced. The CER is currently engaging with suppliers to better understand the nature of these cost drivers and will publish an information paper outlining the cost drivers of Supply in Q Taxes and levies In addition to recovering the costs associated with wholesale, network and supply costs, there are other taxes and levies that suppliers are required to levy on customers. This includes the PSO levy, carbon tax and VAT. The PSO for example, is a subsidy charged to all electricity customers in Ireland. It is designed by the Irish government and consists of various subsidy schemes to support national policy objectives related to renewable energy, indigenous fuel (peat) and security of energy supply. The proceeds of the levy are used to contribute to the additional costs incurred by PSO-supported electricity generators which are not recovered in the electricity market. The Carbon tax was introduced in 2010 and applies to mineral oils, natural gas and solid fuels supplied for combustion in Ireland. All gas suppliers must apply this tax to customer s bills. This energy tax was introduced as a means to incentivise manufacturers and suppliers to provide low carbon services and products to the household consumer market. 28

29 WHAT GOES INTO YOUR BILL? The table below illustrates the average contribution of each of these components to the average electricity bill in Ireland, and how this compares with the EU average. Eurostat Consumption Bands and Price Components Eurostat publishes data on average end user prices for different domestic and industrial/commercial electricity and gas markets. The most relevant bands that are comparable to average Irish domestic and industrial electricity companies are the DC band 1 and the IB band for industrial customers. Eurostat breaks down the average electricity prices for consumption bands according to three categories; energy and supply charges, network charges and taxes and levies. The percentage of the final charge that comes from the energy and supply element is higher in Ireland than the EU average. The networks component is broadly similar, despite a lower population in Ireland. Finally, the taxes and levies element in Ireland is lower than the EU average. Price Components Irl vs. EU EU average ( industrial) IRL (industrial) EU average (domestic) IRL ( domestic) Energy & Supply Networks Taxes and Levies Figure ,5000-5,000 KWh of consumption 29

30 Austria Belgium Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden Unitied Kingdom c/kwh Austria Belgium Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom c/kwh WHAT GOES INTO YOUR BILL? The disaggregated price components for both domestic and industrial electricity are shown below. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 17% 18% 24% 23% 39% 33% 36% 25% 64% 37% 32% 42% 29% 37% 31% 58% 20% 44% 44% 35% 32% 29% 32% 16% 0% 0% 5% 21% 17% 23% 22% 19% 15% 36% 34% 31% 28% 28% 21% 19% 38% 45% 47% 56% 52% 28% 24% 25% 36% 36% 14% 46% 34% 37% 34% 21% 34% 44% 35% 81% 14% 24% 21% 49% 55% 55% 56% 43% 34% 36% 33% 42% 34% 24% 32% 29% 35% 34% 38% 27% 0% 0% Energy & supply Network Costs Taxes & Levies Figure 3.9 Disaggregated Domestic Electricity Price, Band DD, S % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1% 5% 28% 22% 22% 46% 34% 40% 77% 39% 49% 38% 0% 0% 1% 15% 8% 29% 57% 40% 45% 33% 51% 42% 38% 41% 0% 0% 8% 10% 8% 4% 3% 5% 1% 15% 14% 20% 17% 22% 14% 17% 25% 24% 43% 43% 36% 36% 45% 50% 44% 39% 26% 36% 41% 63% 37% 20% 45% 13% 29% 86% 72% 56% 54% 51% 44% 35% 45% 48% 52% 46% 45% 46% 50% 55% 28% 34% Energy and supply Network costs Taxes and levies Figure 3.10 Disaggregated Industrial and Commercial Electricity Price, Band IB, S

31 WHAT GOES INTO YOUR BILL? 4 Supplier Prices in Ireland Having examined the primary components of energy we now turn to analysis of final retail prices in Ireland in The electricity and gas markets in Ireland are fully price deregulated, therefore the CER no longer regulates the final electricity or gas prices in the domestic or business markets. All suppliers, including the previously incumbent suppliers, can now set their own prices for all categories of customers. There are a large number of tariff plans available to domestic and business customers that are provided by electricity and gas suppliers in Ireland. These plans offer customers different tariffs comprised of standing and unit charges (and in some instances daily service charges). Suppliers can also offer different rates depending on payment or billing method (e.g. paperless, online, direct debit etc.). All suppliers are required to publish details of the tariff plans that are available to domestic customers. Suppliers of businesses often provide bespoke plans to their business customers and information on such plans is generally not published by suppliers. 31

32 WHAT GOES INTO YOUR BILL? Revised typical annual consumption values As part of its retail function the CER provides typical annual consumption values which can be used on price comparison websites and to compare tariff offers across different suppliers. Until recently these values were 5,300 kwh for electricity customers and 13,800 kwh for gas customers (CER/17042 Decision paper on the review of typical consumption values). The CER undertook a review of these figures in 2016, with a view to updating the average consumption figures to a more up to date figure reflecting changes in consumption over time. Following consultation, the CER revised these figures to 4,200 kwh for electricity and 11,000 kwh for gas. This represents a decrease of 21% for the electricity average consumption figure and a decrease of 20% for average gas consumption. 32

33 WHAT GOES INTO YOUR BILL? Typical Annual Consumption Figures Old Figures Domestic Electricity % Change Domestic Gas 5,300kWh 13,800kWh -21% Revised Figures 4,200kWh 11,000kWh % Change -20% It can be seen that there is a significant percentage change in these typical consumption figures. This is the first publication since the CER s decision regarding typical consumption values. The comparison of supplier s annual average bills based on typical consumption in section 4.4 uses these new figures. It is important to note that this does not mean that the price of electricity and gas has fallen. The unit rate remains static, but the number of units this is multiplied by is now lower for the purposes of comparing tariffs. Lower figures for typical average consumption have been used compared to previous reports which means that the annual average bills presented will be lower Comparison of prices at beginning of 2016 and end of 2016 The price a customer with the new typical consumption values 2 would have paid on average for their annual electricity and gas bills in 2016 is presented below. The calculation used for both electricity and gas is laid out below. Unit Rate of electricity 4,200 Standing Charge per day *365 PSO and VAT Final Average bill Unit Rate of gas 11,000 Standing Charge per day *365 Carbon tax and VAT Final Average bill 2 4,200kWh for electricity and 11,000kWh for gas 33

34 WHAT GOES INTO YOUR BILL? Using these new figures, the price differential of potential savings for electricity and gas customers switching to a discounted tariff will be smaller than the difference using the old typical consumption values, which is simply driven by the lower number of units used for typical consumption. In 2016, the price differential of potential savings for a domestic electricity customer switching to a discounted tariff was and for a domestic gas customer was The standard plans at the beginning and end of the year are shown below Standard electricity plans Standard Plan January 2016 Standard Plan December 2016 Figure 4.1 Annual Average Urban 24hr Standard Domestic Electricity Bill per Supplier, December 2016, including PSO, VAT & supplier service charges as applicable, typical consumption of 4,200kWh The discounts that could be availed of by customers in 2016 continued to focus on billing and payment methods. Across the majority of suppliers, customers who opted to pay by direct debit and receive paperless bills were able to avail of the highest discounts. Suppliers offering discounts using these methods may be reducing their administrative costs. However it may present a barrier to switching and engagement by customers who for a number of reasons cannot pay by direct debit or opt for paperless billing. 34

35 WHAT GOES INTO YOUR BILL? Discount Electricity Plans 1, Electric Ireland Energia Bord Gáis Energy SSE Airtricity Panda Power Discount Plan January 2016 Discount Plan December 2016 Figure 4.2 Annual Average Urban 24hr Discount Domestic Electricity Bill per Supplier, December 2016, including PSO, VAT & supplier service charges as applicable, typical consumption of 4,200kWh The standard gas plans between January 2016 and December 2016 are shown below followed by discount plans as well as dual fuel plans Standard Gas plans 0.00 Electric Ireland Energia BGE SSE Airtricity Flogas Standard Plan January 2016 Standard Plan December 2016 Figure 4.3 Annual Average Standard Domestic Gas Bill per Supplier in December 2016, including Carbon Tax and VAT, based on typical annual consumption of 11,000Wh in gas 35

36 WHAT GOES INTO YOUR BILL? Discount Gas plans Electric Ireland Energia BGE SSE Airtricity Flogas Discount Plan January 2016 Discount Plan December 2016 Figure 4.4 Annual Average Discount Domestic Gas Bill per Supplier in December 2016, including Carbon Tax and VAT, based on typical annual consumption of 11,000Wh in gas 1, Dual Fuel Plans 1, , , , , Electric Ireland Energia BGE SSE Airtricity Direct debit & online billing discount plan January 2016 Direct debit & online billing discount plan December 2016 Figure 4.5 Annual Average Domestic Dual Fuel Bill per Supplier in December 2016, including Carbon Tax, PSO and VAT where applicable, based on typical annual consumption of 11,000kWh in gas and 4,200kWh in electricity 36

37 WHAT GOES INTO YOUR BILL? Annual Average Domestic Bill Standard Plan Electricity Discount Plan PAYG Lifestyle Choice Standard Plan Gas Direct Debit & Online Billing Dual-Fuel Direct Debit & Online Billing These figures are based on average annual bills across all suppliers 37

38 WHAT GOES INTO YOUR BILL? Analysis of average electricity and gas prices The following section outlines Eurostat data on average energy prices in Ireland up to semester 2 of This data is published by the SEAI (Sustainable Energy Authority of Ireland) on a bi-annual basis. The published data is comprised of national average prices using national average consumption for different bands over a period of 6 months (January to July, and July to December). This data, split by consumption band, can be found in the appendix while weighted average prices for Ireland together with a simple average of the band for the EU and Euro area are presented below for semester 1 of While the weighted average price across all consumption bands in Ireland is not fully comparable to the Euro Area and EU 28 averages, it is clearer than the consumption band level graphs included in the appendix of this report and can show trends across time. What is included? Electricity or gas basic price, transmission, system services, meter rental, distribution Other services Energy taxes Carbon taxes (gas) 4 Climate change levies e.g. PSO (electricity) 5 What is not included? VAT Other taxes recoverable by businesses /MWh per month for domestic customers and per month for business customers and 2.76 per KVA of maximum import capacity for large business customers 38

39 WHAT GOES INTO YOUR BILL? Domestic Electricity Figure 4.6 Average Electricity Prices (ex-vat) to Households All consumption bands The price of domestic electricity in Ireland was below both the EU and Euro Area average between Semester 2 of 2009 and Semester 2 of 2011 but was above the EU average until the second half of In the first half of 2016 it was 3.6% and 11.3% below the EU and Euro Area averages respectively. Business Electricity Figure 4.7 Average Electricity Prices (ex-vat) to Business All Consumption Bands The price of electricity to business consumers in Ireland has been above both the EU and Euro Area since the second half of In the first half of 2016 it was 9.9% and 4.3% above the EU and Euro Area respectively. 39

40 WHAT GOES INTO YOUR BILL? Domestic Gas Figure 4.8 Average Gas Prices (ex-vat) to Households All Consumption Bands The price domestic gas in Ireland has generally been below both the EU and Euro Area over time. In the first half of 2016 it was 6.6% and 15.8% below the EU and Euro Area respectively. Business Gas Figure 4.9 Average Gas Prices (ex-vat) to Business All Consumption Bands The price of gas to business consumers in Ireland was below both the EU and Euro Area between Semester 2 of 2009 and Semester 2 of In the first half of 2016 it was 3% above the EU and 0.2% below Euro Area average. 40

41 WHAT GOES INTO YOUR BILL? Summary Prices Energy prices are made up of a number of different components including network costs, wholesale costs, supply and retail costs and other factors such as the PSO levy, VAT rate and carbon tax. Energy and supply costs comprise a large proportion of final price in Ireland in comparison to other EU countries. A significant share of this is accounted for by the cost of fossil fuels, particularly gas. In 2016, price related competition intensified in the electricity and gas markets, with price reductions across all suppliers for both discounted and standard plans. In semester 2 of 2016, domestic electricity prices increased in all bands except band DE which decreased by 3.7%. Business electricity prices decreased in all bands except IA and ID which increased by 1.3% and 0.1% respectively. The decrease in price was greater than that of the EU. Consequently Ireland s prices moved closer to the EU average. In semester 2 of 2016 Band D2 (which accounts for 92% of household gas consumption) increased by 4% in semester 2 of 2016(compared to 2.3% in the EU). Ireland is now the 7 th most expensive country in the EU for domestic gas. In semester 2, Business gas prices increased in all consumption bands in the range of 2.3% %. This was contrary to the EU which exhibited a reduction in price across all bands. Consequently Ireland is above the EU average in all bands ranking 4 th most expensive in bands I1, I2 and I3; 5 th most expensive in band I4; and 8 th most expensive in I5. 41

42 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? 42

43 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? 5 Consumer Survey 2016 Introduction Each year the CER conducts a survey of the retail and SME electricity and gas markets in Ireland to measure customer experiences and attitudes. This research has been ongoing since The 2016 survey was based on a statistically robust sample of: domestic customers who use gas and/or electricity and non-domestic customers with low to medium consumption. Domestic customer: engagement, awareness and switching 89% of domestic electricity customers and 91% of gas customers were satisfied with their current supplier in In terms of customer s awareness of competition: 88% of respondents spontaneously mentioned Electric Ireland for electricity and 91% of respondents spontaneously mentioned BGE for gas. Respondent s spontaneous awareness has improved across newer entrants to the energy market: PrePayPower, Energia and Pinergy. Knowledge of pricing structures is low with a decline in customers who were able to provide an estimate of the unit cost of the electricity/gas they consume at 12% and 5% respectively. Awareness of types of energy offers are low for both electricity and gas markets, with over a third of customers stating they were not aware of alternative offers available to them. Switching rates among those surveyed were 12% for electricity and 16% for gas. The rate of switching amongst dual fuel customers is 20%. Gas and electricity customers who automatically continue with their current supplier when the initial 12 month contract expired increased to 60% for electricity and 57% for gas. Satisfaction with current provider and absence of motivation were the top reasons not to switch. The perception in ease of switching has dropped by 10% for electricity and 8% for gas customers. Domestic duel fuel customers increased to 59%, with the most common reason for using a single supplier relating to savings and convenience. Levels of bill understanding is low with 48% electricity and 45% gas customers indicating they can easily identify if their bill is based on an actual or estimated reading. Figure 5.1, Trends in domestic customer responses to the 2016 Consumer Survey 43

44 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? The findings of the 2016 consumer survey give further insight into the levels and trends in switching and new registrations in The survey allows for an indicative measure of consumers awareness of the options available in the markets and their ability to switch provider, along with consumer s understanding of their tariffs and supplier communications. Non-Domestic customer: engagement, awareness and switching 81% of SME electricity customers and 87% of gas customers were satisfied with their current supplier in Electric Ireland had the top level of spontaneous awareness for the electricity market at 74%. The differential between Electric Ireland and other suppliers has reduced to less than 20% higher than the closest competitor (SSE Airtricity). Bord Gáis Energy had the top level of awareness for the gas market at 85% and holds a large differential of 36% between the next most frequently mentioned supplier: Energia at 49%. Knowledge of pricing structures is low with customers who were able to provide an estimate of the unit cost of the electricity/gas they consume at 28% and 17% respectively. 36% of electricity SME customers and 31% of gas SME customers have not attempted to compare offers from other suppliers. The level of switching amongst respondents reduced to 22% in the SME electricity market and increased to 26% in the gas market. 90% of SME electricity customers and 92% of SME gas customers who switched during the previous twelve months stated that the switching process was easy or very easy. SME respondents indicated that the motivation for switching was overwhelmingly driven by financial imperatives, with 87% of electricity and 85% of gas switchers citing saving money on the bill as the primary reason for switching supplier. Figure 5.2, Trends in domestic customer responses to the 2016 Consumer Survey It is evident from the results of the consumer survey that a number of factors influence customer s perceptions and engagement in the market. These factors include trust and satisfaction with suppliers, understanding of bills and the switching process and how easy customers find the comparison of tariffs. 44

45 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? While customers have a high level of satisfaction with the service from their suppliers overall, more work needs to be done to inform customers of: the benefits of switching, comparing offers and understanding their bill. Questions on smart metering were included for the first time in 2016 in order to establish levels of awareness and interests in the information available through smart meters in advance of their rollout. Awareness and interest in smart meters Domestic Non-Domestic 52% of domestic electricity customers and 65% of gas customers would be willing to share their information collected by the smart meter with their supplier to avail of new tariffs and services. 60% of domestic electricity customers and 61% of gas customers indicated they would find information from a smart meter helpful for the management of their home energy consumption. 89% of SME electricity customers and 90% of gas customers would be willing to share their information collected by the smart meter with their supplier to avail of new tariffs and services. 86% of SME electricity customers and 97% of gas customers indicated they would find the information from a smart meter helpful for the management of their organisations energy consumption. Figure

46 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Summary Consumer Survey Overall the 2016 consumer survey found high levels of customer satisfaction with all suppliers. Customer awareness remains focussed on incumbent suppliers for both gas and electricity. However, awareness of new entrants is increasing. The survey found low levels of knowledge and awareness across customers in terms of tariff structures, energy offers and bill configuration. The 2016 survey asked questions about smart metering for the first time, and found that customers are interested in smart meters and the additional services and benefits they can offer. SME customers display greater energy engagement levels in terms of switching and interest in smart meters. This is mainly driven by the potential for financial savings. 46

47 6 Customer Protection WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Introduction It is the CER s statutory obligation to ensure a high standard of protection for final customers in the electricity and gas markets. In this regard the CER has introduced a number of measures and tools aimed at protecting customers through a range of policy decisions. A key policy tool used by the CER is the Supplier Hand Book, which sets out the minimum service levels that electricity and gas suppliers must comply with this includes areas aspects such as of marketing, vulnerable customers, complaint handling, billing, disconnections and PAYG meters. The CER monitors compliance with these requirements through formal annual audits. The findings of the formal audits are published annually and are briefly mentioned in Chapter 8 of this report. Customers in debt and those who are disengaged with the market may experience worse outcomes in the energy retail markets. Due to the essential nature of energy supply it is imperative that such customers are protected. This section outlines the trends in debt flagging, customer complaints, PAYG installs and disconnections in In dealing with customers that are in arrears, suppliers must take a number of steps prior to disconnecting a property. The disconnection of a customer s energy supply should always be the last resort and all suppliers are required to offer a payment plan and PAYG to customers in arrears in advance of proceeding to disconnect. Suppliers must also facilitate a customer that wishes to nominate a third party to represent them 6. The figure below illustrates the structure of this chapter, which follows the supplier handbook and the steps taken before disconnecting a customer, along with the metrics which are monitored by the CER in this area. 6 e.g. money advisor including MABS, a recognised charity or Social Welfare Representative. 47

48 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Debt Flagging Disconnection Areas of Customer Protection Arrears Pay as you go financial hardship meters Payment Plans Debt Flagging When a customer requests to change to a new supplier, the existing supplier has the facility to inform the new supplier of outstanding debt if it is above the industry thresholds approved by the CER 7. The new supplier can then choose whether to proceed with or cancel the change of supplier (CoS) request where this flag has been raised. The debt flagging process has been in place since October 2011 and the CER monitors the use of the debt flagging facility by both losing and gaining suppliers on an on-going basis. The tables below show the total number of debt flagged change of supplier requests that were raised in the electricity market in 2015 and Table 6.1 shows that the number of debt flags has decreased in electricity between 2014 and 2016 and table 6.2 shows that the number of debt flags in gas has increased over time. In Q % of electricity switches raised a debt flag, compared to 1.27% in the same quarter in However, the number of CoS being cancelled by the Supplier increased from 21.8% to 36%. 7 Domestic threshold: 225 for > 60 days from due date. Small business & unmetered supply: 600 for > 30 days from due date. Medium sized business: 1,200 for > 30 days from due date. 48

49 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Electricity Debt Flags Q Q Q Q Q Q Q Q Total 2015 Total 2016 Total Debt Flags 1, , Total debt Flags as % of overall Switches % of debt Flagged CoS requests cancelled Debt Flagged CoS not cancelled 1.61% 1.29% 1.11% 1.27% 0.71% 0.70% 0.80% 0.85% 1.32% 0.76% 35.30% 36.30% 33.10% 21.80% 28.57% 27.97% 33.12% 36% 31.63% 31.37% ,731 1,654 Table 6.1 Debt Flagging in Electricity Q Q In the gas market, the number of debt flags as a percentage of overall switches has remained broadly static at 1%. However, the percentage of CoS requests cancelled has increased from 37% to 41%. Gas Debt Flags Q Q Q Q Q Q Q Q Total 2015 Total 2016 Total Debt Flags Total debt Flags as % of overall Switches % of debt Flagged CoS requests Cancelled Debt Flagged CoS not cancelled 0.65% 0.98% 1.25% 0.93% 0.71% 1% 2% 1% 0.95% 1.21% 46.29% 52.33% 44.03% 37.13% 47% 55% 50.52% 41% 44.94% 48% Table 6.2 Debt Flagging in Gas Q Q At the start of 2016 the CER published a decision paper on debt management in the electricity and gas retail markets (CER/16/014). This supplemented the CERs previous decision in 2011 (CER/11/823) whereby debt transfer would apply to customers who had received a free Pay As You Go meter for financial hardship reasons. Following a review of consulted issues and a meeting with the industry, the 49

50 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? CER issued the decision not to mandate debt transfer or to introduce debt blocking into the market. It was decided that the debt flagging process would also remain the same at this time. The possibility to introduce a further flag may be reviewed in the future. Arrears and Payment Plans The CER has begun to collect data on the number of customers in arrears and on payment plans per quarter, including their value and length. Figures detailing the number of customers in arrears and on payment plans per market segment will be published on a quarterly basis. Arrears refers to the number of customers by market segment that were in arrears at the end of the reporting period regardless of the value of the arrears. As shown in table 6.3, between 9% and 14% of customers across all segments were in arrears in Q However, it is important to note that this includes all customers that were in arrears for one billing period or more in the reporting period. Total number of customers in arrears and on payment plans in Q Domestic Electricity Non-Domestic Electricity Domestic Gas Non-Domestic Gas Total Arrears 271,173 29,408 75,090 2, ,947 Payment Plans 14, ,057 Table 6.3 A better measure of customers who are continuously having difficulty paying their bills is the number of customers who have entered into a payment plan arrangement with their supplier, which is a specific payment arrangement with a supplier to cover outstanding arrears on their bills. A payment plan can include those arranged to recoup a debt, regardless of the debt source (i.e. financial hardship, fraud, credit, estimated reads, etc.). As shown in table 6.4, as a percentage of total customers the number of customers per market segment on payment plans is much lower than for customers in arrears, which may indicate that there are relatively low levels of customers in long term arrears. 50

51 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? % customers in Arrears or payment plans 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Domestic electricity Non-domestic electricity Domestic gas Non-domestic gas Arrears On payment plans Figure 6.1 Pay as You Go Meters PAYG This section looks at the trend in the installation of PAYG financial hardship meters. Suppliers may not disconnect for reasons of non-payment of account unless they have offered a PAYG meter to the customer. In instances where it would not be appropriate to offer a PAYG meter, such as the customer not being able to use the meter or where there is no suitable location for the meter in the premises, the supplier must offer an alternative. Currently Bord Gáis Energy, Electric Ireland, Energia, Flogas and SSE Airtricity provide PAYG meters for financial hardship in the electricity and gas domestic markets. ESB Networks and GNI are responsible for installing PAYG meters free of charge for customers in financial difficulty at the request of suppliers (on foot of a customer agreeing to the installation of a meter). The CER will continue to monitor the installation of PAYG financial hardship meters in its quarterly reports. A number of suppliers also offer lifestyle choice prepayment options in the electricity sector (Electric Ireland, Pinergy and PrePayPower). This is provided in the form of a PAYG meter unit that acts as a budget controller in series with the existing meter. The lifestyle choice prepayment meter is therefore an asset of the supplier rather than ESBN. Consequently, the lifestyle choice prepayment models require 51

52 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? customers to pay additional daily service charges (customers in difficulty availing of free PAYG hardship meters do not incur these additional charges). For gas, GNI provides all PAYG meters. If a customer wishes to avail of a lifestyle choice meter in gas this is purchased from GNI through their supplier. In 2016, PrePayPower entered the gas market for the provision of lifestyle choice prepayment meters. Electricity PAYG financial hardship installs Q Q Q Q Q Q Q Q Total Monthly Total Cumulative Installations Total Cumulative Installs Total Quarterly Installs Figure 6.2 Electricity PAYG financial hardship installs Q Q Q Q Q Q Q Q ,010 70,580 73,288 75,177 77,101 78,742 80,072 81,026 4,152 3,287 2,478 1,889 1,921 1,641 1, Table 6.4, Total and cumulative number of electricity PAYG installs for reasons of financial hardship Gas PAYG Installs Q Q Q Q Q Q Q Q Total Cumulative Installs Total Quarterly Installs % financial hardship 94,927 97,317 99, , , , , ,858 1,896 1,959 1, ,003 1,276 1,075 1, % 89.28% 89.11% 78.82% 70.09% 77.35% 70.98% 41.25% 52

53 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Table 6.5, Total and cumulative number of gas PAYG installs Gas PAYG Installs Q Q Q Q Q Q Q Q Total Cumulative Installations Total Monthly Figure 6.3 It can be seen from tables 6.5 and 6.6 and figure 6.4 that the total number of monthly PAYG installs by ESBN and GNI decreased between 2014 and Appendix 5.3 details the electricity PAYG meter installation rate per supplier; in Q Bord Gáis Energy had the highest financial hardship PAYG installation rate, of 0.07%. This was calculated by dividing the number of meter installs per quarter by the number of customers of each supplier per quarter. Table 6.6 details the Gas PAYG financial hardship meter installation rate per supplier. For Q Electric Ireland had the highest installation rate of 0.09%. 53

54 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? 7,000 Total Number of PAYG Installs ,000 5,000 5,075 5,975 6,120 Electricity PAYG Installs 4,000 3,000 2,000 1,000 0 Q ,096 Q ,920 Q ,341 Q ,064 4,152 3,287 2,478 1, Q Q Q Q Q Q Q Q Gas PAYG Installs Figure 6.4, total number of electricity and gas PAYG installs per quarter Disconnections The disconnection/ de-energisation of a customer s energy supply should always be the last resort and all suppliers are required to offer a payment plan and prepayment solution to customers in advance of proceeding to disconnect. This section analyses trends in disconnections in both electricity and gas Disconnections Total Disconnections of customers for non-payment of account (NPA) declined in 2016 compared to 2015; by 12% in electricity and 21% in gas. The total number of disconnections between Q and Q was 6,879 for electricity and 2,787 for gas. Total NPA Disconnections Electricity 17,794 17,441 12,391 8,731 7,783 6,879 Gas 4,560 7,558 6,279 3,998 3,542 2,787 Table 6.6, total (domestic and business) disconnections There are various reasons for the decline in disconnections over time, including the work that was undertaken by all stakeholders in early 2014 that reviewed the market processes, and the voluntary agreement introduced by most energy suppliers committing to never disconnect an engaging customer. 54

55 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? The requirement placed on suppliers to offer payment plans and financial hardship meters instead of disconnecting customers in the first instance has also benefited those in financial difficulty. It is likely that improving economic conditions in recent years has also contributed to this decrease in disconnections. Total (Domestic and Business) NPA disconnections 20,000 15,000 10,000 5,000 17,704 17,441 4,560 7,558 12,391 6,279 8,731 7,783 6,879 3,998 3,542 2, Electricity Disconnections Gas Disconnections Figure 6.5, trend in NPA disconnections from Disconnections Domestic and Non Domestic Electricity Market The CER receives data on electricity disconnections 8 that were completed for nonpayment of account reasons on a monthly basis from ESBN 9. This section analyses the data on validated electricity non-payment of account (NPA) disconnections 10. Total Domestic disconnections per supplier Electric SSE Bord Pre Pay Ireland Airtricity Gais Power Energia Pinergy Panda Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov This data has been validated by suppliers in advance of publication. 9 NPA can cover customers in arrears that have been disconnected because they cannot pay due to financial hardship or disconnected customers who choose not to pay debt. Currently such customers cannot be distinguished in the data. This NPA data does not include data on self-disconnections. This data includes disconnections of PAYG customers due to fraud/theft. 10 PrePayPower states that, as a prepay supplier, it only disconnects in situations where they suspect a site of being vacant or in instances of fraud based on an analysis of vend and consumption data. 55

56 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Dec Table 6.7, Total domestic disconnections by supplier, January 2016 December 2016 Total Non-Domestic disconnections per supplier Electric Bord PrePay Energia Airtricity Ireland Gais Power Pinergy Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Table 6.8, Total non-domestic disconnections by supplier, January 2016 December 2016 From tables 6.7 and 6.8 it can be seen that the majority of disconnections due to NPA were for domestic customers. Figure 6.6 shows the trend in disconnections for 2015 and 2016 compared to the trend in installation of PAYG financial hardship meters. Without a PAYG system in place which provides an option for customers facing difficulty in paying their electricity bills, disconnections could be significantly higher. 1,800 1,600 1,400 1,200 1, Total domestic electricity disconnections compared to PAYG installs 1, ,577 1,358 1,187 1,082 1, PAYG financial hardship installs Domestic Disconnections Figure 6.6, Total (Domestic and Business) Electricity Disconnections compared to PAYG financial hardship installs for January 2015 to December

57 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Percentage change in electricity disconnections between 2014 and 2016 Total Domestic Non-Domestic % change between 2014 and % -13% 2% % change between 2015 and % =19% 22% Table 6.9 A more relevant measure of comparing disconnection levels between suppliers is their disconnection rate per 10,000 customers. This takes into account the customer numbers of the suppliers and is an accurate measure of disconnection intensity per supplier Domestic Electricity Disconnections per 10,000 customers - Electric Ireland SSE Airtricity Bord Gáis Energy Prepaypwer Energia Figure

58 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Disconnections Domestic and non-domestic Gas Market There are three types of disconnections 11 in gas: credit locks, disconnect meters (DMs) and street isolations (CTSRs). This section only focuses on the disconnections that were undertaken for non-payment of account (NPA) reasons 12. Total domestic gas disconnections per supplier Bord Gáis Energy SSE Airtricity Flogas Electric Ireland Energia Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Table 6.10, Total domestic disconnections by supplier, January 2016 December 2016 Total non-domestic gas disconnections per supplier Bórd Gáis Energy SSE Airtricity Flogas Electric Ireland Energia VAYU Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The CER receives separate data reports on all three from GNI. To determine the disconnections that were completed for non-payment of account reasons (NPA), the CER assumes all credit locks were completed for NPA reasons and sends each supplier the GPRNs that relate to their DMs and CTSRs so that the supplier can identify the remaining NPA disconnections. The CER then add together all the CLs and the NPA identified DMs and CTSRs to derive an estimate for total gas NPA disconnections. 12 This data has been validated by suppliers in advance of publication. 58

59 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Table 6.11, Total non-domestic disconnections by supplier, January 2016 December 2016 Figure 6.8 shows the trend in gas disconnections compared to the trend in installation of PAYG financial hardship meters. The chart indicates that without a PAYG system, disconnections would be higher. Total gas disconnections compared to PAYG installs Gas PAYG (financial hardship) installs Domestic Gas Disconnections Figure 6.8, Total Domestic Gas Disconnections compared to PAYG financial hardship installs for January 2015 to December 2016 Percentage change in gas disconnections between 2014 and Total 2016 Domestic Non-Domestic % change between 2014 and % % -6.59% % change between 2015 and % -26% 88% Table 6.13 In analysing the disconnection levels of suppliers, it is important to examine disconnections as a proportion of customer numbers to determine the intensity of disconnections by supplier. The table below shows the domestic disconnection rate per 10,000 customers per supplier over time. 59

60 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Domestic Gas Disconnections per 10,000 customers Bord Gáis Energy SSE Airtricity Flogas Electric Ireland Energia Figure Disconnections Vacant premises proxy Anecdotal evidence suggests that a significant number of disconnected properties are in fact vacant. The following section examines proxy data on the level of vacant premises in gas. Gas 13 The figure below shows the trend in disconnections exemplifying the impact of adjusting the number of disconnections with installed PAYG meters and removing the impact of vacant premises. The chart indicates that without a PAYG system, disconnections would be higher. In addition, similar to the case in electricity it can be seen that when proxy figures for vacant sites are removed, disconnections are less. 13 There is a longer time period used to measure disconnected vacant sites in gas (6 months) because some gas customers may choose to disconnect gas as it is less of a necessity at particular times of the year (e.g. during the summer). 60

61 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? 700 Domestic Gas Disconnections adjusting for PAYG & Vacant Premises Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Domestic Disconnections Disconnections plus PAYG Installs Domestic Disconnections less Vacant PAYG Installs for financial hardship Figure 6.10 Customer Complaints The CER monitors three sources of customer complaints data: Information from the CER customer complaints team (CCT), new customer complaints information received from suppliers and the Consumer Survey. Customer complaints information is presented at an aggregate level. The CER will publish complaints information from the network companies in due course. The CER has recently begun to collect data from suppliers on a yearly basis concerning the number of complaints they have received from customers. Complaints are defined as a customer s expression of dissatisfaction. Market Segment Number of Total customers % of total complaints in 2016 customers Domestic Electricity 12,395 2,041, % Non-Domestic Electricity 1, , % Domestic Gas 5, , % Non-Domestic Gas , % Dual Fuel 1,408 Total 20,497 2,931, % 61

62 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Table 6.13, total complaints in 2016 As shown in table 6.14, the number of complaints as a % of total customers in 2016 is 0.7% Supplier Complaints Figure 6.11 Figures 6.11 and 6.12 compare the total number of complaints to suppliers and complaints as a percentage of customers between 2015 and The total number of complaints has increased between 2015 and 2016 but as a percentage of overall customers the numbers of complaints are low. In addition, as 2015 was the first year of reporting on customer complaints the figures for 2016 should be more accurate. Supplier Complaints % 0.9% 0.8% 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% Domestic Electricity Non-Domestic Electricity Domestic Gas Non-Domestic Gas Figure

63 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Summary Customer Protection There were 648 debt flags raised in the electricity market in Q (corresponding to approximately 1.32% of all CoS requests in that quarter) and 922 in Q (corresponding to approximately 1.27% of all CoS requests in that quarter). There were 241 debt flags raised in the gas market in Q (corresponding to 1% of gas switches) and 237 raised in Q The % of debt flagged CoS requests cancelled has fluctuated between 37% and 55% between 2015 and In 2016, there were 5,846 PAYG financial hardship meters installed for electricity and 4,423 for gas. This compares to 11,806 and 6,382 installed in 2015 respectively. Disconnections of customers for non-payment of account (NPA) declined in 2016 compared to 2015; by 12% in electricity and 21% in gas. The total number of disconnections between Q and Q was 6,879 for electricity and 2,787 for gas. 63

64 7 Audits of Compliance Introduction WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? The CER regularly conducts audits of compliance to ensure that suppliers are meeting their regulatory obligations. As part of this ongoing compliance work, in 2016 the CER audited suppliers adherence to the rules in relation to deposits for domestic customers. These requirements are set out in the CER s Supplier Handbook. In 2016 the CER also conducted its annual audit of accredited price comparison websites. Audit of Deposit Requirements in the Supplier Handbook The CER s Supplier Handbook sets out the minimum service requirements that suppliers must adhere to in their dealings with energy customers. It comprises of individual Codes of Practice that cover all key areas of customer-supplier interaction, including: billing, disconnections, marketing, vulnerable customers and Pay As You Go meters. These rules are in place to ensure that customers enjoy a high standard of protection in their dealings with licensed suppliers and are in in line with CER s legislative duties 14. In 2016, the CER conducted an audit of supplier s compliance with sections and of the Code of Practice on Customer Billing and Disconnection for household customers. The audit examined the: Process of requesting a deposit from a customer; Criteria used by the supplier to determine when a deposit is requested; Process of informing the customer on how to improve their credit worthiness; Process used by the supplier to refund a deposit; and 14 S.I. No. 452 of 2004 European Communities (Internal Market in Natural Gas) S.I. No. 60 of 2005 (Electricity) European Communities (Internal Market in Electricity) 64

65 WHAT PROTECTION DO YOU HAVE AS AN ENERGY CUSTOMER? Suppliers obligation to make the customer aware of any social arrangements in relation to deposits. The audit gathered evidence through a call for documented information and through site visits of suppliers premises. The CER undertook an extensive audit and did not find any supplier in breach of the deposit requirements. Since the audit was conducted the CER updated the Supplier Handbook and a revised version of the Supplier Handbook is now published (CER ). It introduced further requirements to ensure that information on deposit requirements are readily available to business customers: suppliers are required to have a fair, transparent and reasonable policy to determine the amount requested from customers as deposit. The policy must be available to any person who requests it in an appropriate format. 16 Audit of Price Comparison Websites The CER accredits price comparison websites which meet defined standards in terms of accuracy and reliability. Each year the CER audits compliance with the accreditation rules. The 2016 audit found that Bonkers.ie and Switcher.ie was found to be compliant with the principles set out in the Accreditation Framework ril% pdf 16 Decision 38 in CER Review of the Supplier s Handbook Decision and Further Consultation %20and%20Further%20Consultation.pdf. 65

66 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? 66

67 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? 8 Customer Switching Introduction This section contains data on customer switching activity with a breakdown of supplier switches in the relevant markets. Data on new registrations is also examined. Registrations represent the total number of sites that were connected in a period 17. Switching refers to the action where a customer changes from one supplier to another. It is measured by the number of completed switches in a period (not the number of switching requests). There is a free and easy switching process in place in Ireland which facilitates customers that wish to switch their supplier. Switching information is critically important in monitoring the effectiveness of competition, the level of customer engagement in the market and the choices available to customers. Competition in the electricity and gas markets is driven by engaged customers that look for suppliers offering attractive products and tariffs. There are a number of factors that may impede switching, such as absence of clear information, complexity of tariffs and lack of trust in the market. Evidence suggests that a large proportion of customers have never switched supplier. Consequently, only a portion of customers are availing of the benefits of switching and the discounted offers available in the market (between 2011 and 2016 switching has ranged between 11% and 15%). Non-domestic customers may also be affected by a lack of transparency in prices and contracts offered by suppliers, as due to the nature of bespoke plans there are no comparison tools currently available. Through the CER s new market monitoring framework, data is being collected on the number of customers renegotiating their plans with their supplier (internal switching). This gives some further insight into customer engagement in the retail market and shows that the number of renegotiations is a significant addition to the switching rate. While the switching rate overall has decreased in recent years, it is still high relative to a number of EU countries. The 2015 ACER-CEER Market Monitoring Report detailed the switching rate in Ireland in 2014 in comparison to other EU countries. Ireland in electricity had the second highest switching rate of 14% after Portugal, while in gas in had the highest switching rate across all EU countries of 18.7%. 17 New registration data may include a small number of sites that were reconnected/ reregistered in addition to sites that are new to the system. Switching data does not include new registrations 67

68 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Electricity Market Switching and New Registrations This section analyses the level and trend in switching and new registrations in the electricity market by supplier and customer category Total Switching The total number of switches completed in the electricity market in 2016 was 317,719. This represented an increase from 2015, during which time 303,187 customers switched. Switching remained above the 20,000 level per month throughout The average switching rate in electricity in 2015 was 13.53%. This rate compares well internationally and is indicative of an active market 18.Below represents the total switching by quarter. 85,000 80,000 75,000 70,000 65,000 Total Switching ,000 Q1 Q2 Q3 Q Figure 8.1 Below represents the switching rate per year which shows that switching has steadily increased year on year since Total Electricity Market Total Number of Switches Switching rate , , , , , , , ,719 21% 21% 15% 11% 12% 14% 13.53% 14.13% Table 8.1Total switching in electricity 18 According to the VaasaETT description of levels of switching 68

69 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Switching Rate % 20% 21% 15% 10% 15% 11% 12% 14% 13.53% 14.13% 5% 0% Axis Title Switching rate Figure 8.2 Total Number of Switches Q1 79,380 78,448 68,381 Q2 81,918 75,060 80,276 Q3 79,886 77,080 81,894 Q4 76,535 72,599 81,926 Total 317, , ,477 Table Switching by customer category Domestic switching peaked in the first six months of 2009 following the entry of Bord Gáis Energy and SSE Airtricity into the domestic market. Switching in the business sectors is more volatile than in the domestic sector and this reflects seasonal and contractual influences. Contract renewal dates in the LEU sector generally take place around October and January and this explains some of the differences in levels across each year. The level of switches for each market segment in the electricity sector over time are shown below. 69

70 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? 5.000% 4.500% 4.000% 3.500% 3.000% 2.500% 2.000% 1.500% 1.000% 0.500% 0.000% % Switching Rate per Sector per Month Total Switches Domestic Small Business Medium Business LEU Figure Net Switching by Supplier Net switching represents the net gain or loss in customer numbers experienced by suppliers. It is estimated by the gain in customers less the loss in customers experienced by the supplier. Figure

71 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? The table below outlines the net switching levels across suppliers between 2015 and Net switching for Electric Ireland and SSE Airtricity was negative for 2016; for all other suppliers it was positive. Net Switching Per Supplier Electricity Net Switching Electric Ireland Energia SSE Airtricity Bord Gáis Energy PrePayPower Pinergy Others Q ,520 7,073 1,062-3, ,039 Q ,534 4,019-7,399 6,102 1,580-3,232 Q ,624 5,821-8,469 11,599 3, ,747 Q ,888 3,798-9,293 14,083 4, ,867 Q ,037 10,548-4,139 7,333 3, ,547 Q ,328 9,190-8,862 8,327 3,796 1,621 7,257 Q ,791 3,422 1,231 4,118 4,105 1,189 4,728 Q ,833 5,433-7,855 5,306 3, ,615 Table 8.3 Net switching in electricity by supplier, Q Q Table 8.3 can be compared to the market share data presented in this report and for 2016 shows growth in customer numbers for Energia, Bord Gáis Energy, PrePayPower and Pinergy New Registrations New registrations in electricity are situations where a customer has a new connection or has moved into a site, which has been de-energised for at least 3 months and has remained vacant during the three month period 19. Electric Ireland continues to be the supplier associated with the majority of new registrations in electricity. It s share of new registrations was 77% of total registrations for 2016, compared to 80% in 2015 and 86% in When a new customer wishes to register for the supply of electricity to their premises, they are given the opportunity to choose a supplier. If they do not choose, their default supplier will be Electric Ireland. The CER is currently taking action through industry fora to ensure all suppliers have an equal opportunity to avail of new registrations. 19 ESB Networks. Sites normally remained registered to a supplier for 3 months after they are deenergised 71

72 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Figure 8.5 New Electricity registrations over time by supplier, January 2010-December

73 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Internal Switching in Electricity and Gas Internal switching or renegotiations refer to situations where a new contract term, tariff or terms & conditions have been negotiated between the supplier and the customer. These can be initiated either by the Supplier or the customer. Data on renegotiations complements that collected on switching and helps to provide a more complete picture of customer engagement and the options open to customers. This analysis looks at the number of successfully completed renegotiated contracts 20 Total Number of Successful Internal Electricity Switches Domestic Electricity Non Domestic Electricity Figure 8.6 Total Number of Successful Internal Gas Switches Domestic Gas Non-Domestic Gas 20 New data captured under the market monitoring framework may be subject to change 73

74 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Figure

75 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Gas Market Switching and New Registrations This section analyses the levels and trends in switching and new registrations across suppliers in the gas market, as well as providing information on switching by customer segment Total Switching The total number of switches completed in the gas market in 2016 was 93,434. This represented a decrease in the total number compared to 2015 where 106,862 switches were completed. Gas Switching Q1 Q2 Q3 Q Figure 8.8 Total Number of Switches Q1 25,305 23,997 26,979 Q2 22,946 26,330 26,305 Q3 23,002 30,363 28,189 Q4 22,181 29,060 25,384 Total 93, , ,857 Table 8.4 The average number of switches per month between January 2010 and January 2015 was 8,868 with an average of 7,786 switches per month between January 2016 and December The highest rate of switching in 2016 was between April and May with 8,874 switches. The switching rate in gas in 2016 was 14.4%. This represented a lower proportion to that in 2015 (which had a rate of approximately 16%). By international comparison the gas market is still considered a very active market with regard to switching. 75

76 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Total Gas Market Total Number of Switches Switching rate , , , , , ,862 93,434 15% 17% 17% 18% 17% 16% 14.4% Table 8.5 Total switching in gas Switching by category The trend in switching for the domestic and IC gas market segments varies quite significantly throughout each year. More detailed graphs showing the switching rate per year for domestic and non-domestic gas customers can be found in Appendix 1. Figure Net Switching by Supplier The data from table 8.6 shows that, similar to the case in 2014 and the experience in electricity, Bord Gáis Energy consistently experienced a net loss in customer numbers in Electric Ireland has experienced a net gain since it entered the domestic market in March 2011 and it continued to experience significant net gains in gas throughout

77 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Figure 8.10 The table below outlines the net switching levels across suppliers in Bord Gáis Energy experienced the highest net loss of customers for 2016 while Energia experienced the largest net gain. Flogas, PrePayPower, Vayu and Electric Ireland also had a net gain in customers for SSE Airtricity Net Switching Per Supplier Bord Gáis Electric Energia Flogas Gazprom VAYU PrePayPower Energy Ireland Q ,076 1,423 1, Q , ,511 1,986 1, Q , , Q ,141-3,207-1, , ,084-2,675 5,997 9,472 1, ,277-4,645 4,151 3, ,675 Table 8.6 Net Switching in Gas by Supplier, Q Q

78 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? New Registrations New gas registrations are defined by GNI as the situation where a new meter is fitted or a meter is unlocked at sites where there is no supplier registered 21.The figure below shows the trend in new registrations by supplier since January Figure 8.10 New Registrations in Gas By Supplier, January 2010 December 2016 In 2016, Bord Gáis Energy continued to be the supplier associated with the majority (67.76%) of new registrations in the gas market. Its share of new registrations was slightly more than for 2015 (64.57%). Though it had a net loss of customers through switching in 2015 and 2016, new registrations are not included in the figures for switching and so its total loss in market share was decreased through new registrations. 21 A registration unlock is where the site has been locked for greater than 18 months and there has been no consumption since the lock was carried out and no customer registered. 78

79 NUMBER OF DUAL FUEL CUSTOMER SWITCHES HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Dual Fuel Switching The CER has also begun to collect data on the number of dual fuel switches per month. A dual fuel customer is defined as a site that has both gas and electricity accounts with the same supplier (whether on a specific dual fuel tariff or not). The 'dual fuel switching' indicator refers to the number of dual fuel customers (measured by MPRN/GPRN) that switched, either one account or both gas and electricity, per month. The data is provide by suppliers to the CER. Table 5.3 and Figure 5.3 demonstrate the level of duel fuel switches between January 2016 and December Jan16 Feb16 Mar16 Apr16 May16 Jun16 Jul16 Aug16 Sep16 Oct16 Nov16 Dec16 Total Dual Fuel Switches 8,941 11,018 9,342 9,682 7,137 8,217 7,018 9,628 7,418 7,735 7,853 6,081 Total Switches 31,825 37,450 35,410 38,091 33,963 32,810 33, ,707 34,209 31,406 40,534 26,776 % dual fuel Table Number Of Dual Fuel Switches Domestic Electricity Domestic Gas Domestic Dual Fuel Figure

80 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Defaults to Standard Tariffs Data is also received from suppliers on a yearly basis on the overall number of customers who defaulted to standard tariffs. The indicator refers to the automatic default of a current customer at the end of a contract to a tariff that does not have a new customer discount or a contract term associated with it Number of customers defaulting to standard tariffs, Domestic Electricity Small Business Electricity Domestic Gas IC Gas Figure 8.11 Figure 8.11 shows the number of customers per market segment that defaulted to standard tariffs in There were 2,041,316 customers in the domestic electricity market in % of customers defaulting to standard tariffs in 2016 Domestic Small Business Electricity Electricity Domestic Gas IC Gas % of total customers 6.95% 4.75% 7.00% 2.33% % of customers who switched in the last 12 months 51.04% 24.17% 50.58% 16.57% Table 8.8 In 2016, approximately 51% of domestic electricity customers that had switched supplier in the last 12 months defaulted to a standard tariff, when their initial discount period ended. This amounted to 6.95% of all electricity customers. 7% of all gas customers defaulted to standard tariffs, at the end of a discount period, amounting to over 50% of gas customers who switched supplier in the last 12 months. While this is a low percentage of customers overall, taken as a percentage of customers on fixed term discounted plans this indicates that a large number of 80

81 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? customers who were active in the market did not renegotiate their contract or switch in Lower numbers of business electricity and gas customers defaulted to standard tariffs, however a significant proportion of business customers negotiate bespoke contracts with suppliers. Summary Customer Switching Switching rates in both the electricity and gas markets are above 10%. Under the VasaETT description of the levels of switching, the electricity and gas markets are considered active and Ireland ranks well globally in terms of switching rates. The total number of switches completed in the electricity market in 2016 was 317,719. This represented an increase from 2015, during which time 303,187 customers switched. The total number of switches completed in the gas market in 2016 was 93,434. This represented a decrease in the total number compared to 2015 where 106,862 switches were completed. New data on internal switching and dual fuel switching shows that there are also a significant number of internal switches on a monthly basis. Approximately 20-30% of switches per month are dual fuel switches. 81

82 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? 9 Market Share Consumption and Customer Numbers Introduction This section contains market share data for the main electricity and gas suppliers in Ireland. Data is presented in terms of actual customer numbers and consumption (MWhs/GWhs) for 2016 as well as showing the change in percentage share since Electricity Market The electricity market is comprised of four different market segments covering different DUoS groups (distribution use of system groups or DGs) 22 Domestic market this covers the residential/household end of the market including urban residential customers and rural residential customers that have a connection to the low voltage network. Small-sized business market this covers small businesses with a low voltage nonmaximum demand connection. Medium-sized business market this includes unmetered public lighting & other unmetered connections and businesses with a low voltage maximum demand connection. Large energy users (LEU) market this includes businesses connected to the medium voltage, 38kV and 110kV network and those connected to the electricity transmission system. 22 A DUoS charge is a fee that ESB Networks charges to electricity suppliers for use of the electricity distribution system. The amount of DUoS that ESBN charges a supplier for each customer depends on which DUoS Group a customer is classified as, which is based on several factors including the voltage a premises is connected at, the type of meter installed, or if electricity is exported. Source: ESB Networks. 82

83 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? The electricity market comprises a range of both very large and very small suppliers. Those that have at least a 1% MWh share of consumption are reported separately in each specific market. In Q4 of 2016, Panda Power reach 1% domestic market share in terms of consumption, so it is reported on separately in this report. It is worth noting that in electricity, the others category in some segments includes data on suppliers that are not necessarily active in the electricity retail market, i.e. they are self-suppliers, or they only have very few sites. The activity of these companies generally does not have a significant impact on overall trends. Nonetheless, some suppliers not active in the retail market with only one/two sites may generate a relatively high proportion of MWhs within the Others category Overall trends in retail electricity In the electricity market, the total number of customers in 2016 was 2,253,814 and total consumption was 25,569,506 MWhs. This represented an increase of 0.01% of customer numbers and an increase of consumption by 0.02% overall compared to Domestic Market Small Business Medium Business Electricity Customer Numbers Q Q Q Q % change between 2015 and ,031,040 2,034,414 2,037,556 2,041,316 2,041,316 2,030,110 2,024, % , , , , , , % 25,636 25,726 25,828 25,965 25,965 25,385 24, % LEU 1,752 1,763 1,775 1,796 1,796 1,744 1, % Total Market 2,243,442 2,246,782 2,249,764 2,253,814 2,253,814 2,241,399 2,236, % Table

84 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Electricity Customers Consumption (MWhs) Q Q Q Q % change between 2015 and 2016 Domestic Market Small Business Medium Business 2,383,011 1,950,281 1,811,098 2,286,356 8,430,746 8,441,817 8,261, % 1,000, , , ,660 3,656,005 3,653,279 3,590, % 1,059, , ,868 1,059,910 4,101,135 4,079,341 4,060, % LEU 2,236,475 2,326,128 2,435,893 2,383,124 9,381,620 8,897,831 8,222, % Total Market 6,679,727 6,126,283 6,068,446 6,695,050 25,569,506 25,072,268 24,135, % Table 9.2 As shown in table 9.3, there was little change in the level of consumption per customer between 2015 and 2016 in all segments. Consumption per customer for 2015 and 2014 kwhs/customer % Change Domestic Market 4,130 4, % Small Business 19,790 19, % Medium Business 157, , % LEU 522,362 5,101, % Table Domestic Electricity Market In the domestic electricity market, total customer numbers in Q were 2,041,316 and total consumption was 2,286,356 MWhs, compared to 2,030,110 customers and total consumption of 2,222,735 MWhs in Q

85 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Domestic Market Share 5.06% 1.24% 1.07% 5.81% 6.13% 1.35% 0.27% 1.20% Electric Ireland 5.56% Airtricity Bord Gáis Energy 15.90% 14.62% 56.21% 17.27% 16.87% 51.35% PrePayPower Energia Pinergy Others Panda (a) Customer Nos (b) MWhs 9.1 Q4 Domestic Electricity market Share Q Domestic Market Share % change Q3-Q4 % change Sites MWhs Sites MWhs Sites MWhs Electric Ireland 1,147,420 1,173, % -0.37% -3.38% -3.36% SSE Airtricity 298, , % 0.06% -0.83% -1.35% Bord Gáis Energy 324, , % -0.25% 1.03% 1.02% PrePayPower 118, , % 0.02% 0.68% 0.63% Energia 103, , % 0.35% 1.48% 1.71% Pinergy 25,333 30, % 0.04% 0.16% 0.21% Panda % -1.05% - - Others % 0.04% -0.22% -0.06% Total 2,041,316 2,286,354 Table 9.4 Number of sites and MWhs per supplier In Q4 2016, Electric Ireland held the greatest market share with 51.35% of total consumption. However, its market share decreased by 3.36% between 2015 and 2016 in terms of consumption and remains below the 60% threshold at which it was deregulated. Energia gained the most between Q and Q4 2016, with an increase of 1.71% of market share. SSE Airtricity also lost 1.35% of market share by consumption between Q and Q Bord Gáis Energy has overtaken SSE Airtricity in holding second greatest market share by consumption in Q4 2016, with 17.27% over 16.87% respectively. The remaining key suppliers are Energia with 6.13%, PrePayPower with 5.56%, Pinergy with 1.35% and Panda with 1.20%. 85

86 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? The graphs below show the trend in market share from the beginning of 2009 to the end of 2016 in terms of customer numbers and consumption. Electric Ireland s market share decreased between 2009 and 2011 but has remained just above 50% between 2011 and Significant gains have been made over time by Bord Gáis Energy and SSE Airtricity and more recently by PrePayPower and Energia. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Domestic electricity market share trend over time by customer numbers Electric Ireland SSE Airtricity Bord Gáis Energy PrePayPower Energia Others Pinergy Panda Figure % 80% 60% 40% 20% 0% Domestic Electricity market share trend over time by consumption Electric Ireland SSE Airtricity Bord Gáis Energy PrePayPower Energia Others Pinergy Panda Figure

87 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Small-sized business electricity market In the small-sized business electricity market, total customer numbers in Q were 185,061 and consumption was 949,382 MWhs, compared to 185,481 customers and total consumption of 950,658 MWhs in Q The following graph shows the percentage breakdown by supplier. 5.18% SME Market Share 0.56% 0.08% 4.43% Electric Ireland 19.74% 43.87% 27.72% 35.90% Airtricity Bord Gáis Energy 12.89% 18.32% 12.60% 18.70% Energia PrePayPower Others (a) Customer Nos (b) MWhs Figure 9.4 Q4 Small-Sized Business Electricity market Share Q Small Business Market % change Q3-Q4 % change Share Sites MWhs Sites Sites Sites MWhs Electric Ireland 81, , % 0.05% -3.26% -2.52% SSE Airtricity 33, , % -1.62% -1.88% -1.42% Bord Gáis Energy 23, , % 0.15% 1.61% 1.2% Energia 36, , % -0.97% -0.78% -0.99% Others 9,565 48, % 2.38% 4.31% 3.74% Total 184, ,660 Table 9.5 Number of sites and MWhs per supplier In Q4 of 2016, Electric Ireland held the largest market share in the small and medium business market, with 35.9% of the market. Electric Ireland did however lose 2.52% from Energia held the second largest share with 27.72% followed by SSE Airtricity with 18.7%, and Bord Gáis Energy with 12.6%. 87

88 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? The largest decrease in market share in this segment was for Electric Ireland with a loss of 2.52% in consumption between Q and Q Bord Gáis Energy gained the most market share in this segment, with an increase of 1.2% in consumption between 2015 and The graphs below show the market share of each supplier in the small business electricity sector between 2009 and % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% SME market share over time by customer numbers Electric Ireland Energia SSE Airtricity Bord Gáis Energy Others Figure % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% SME market share over time by consumption Electric Ireland Energia SSE Airtricity Bord Gáis Energy Others Figure

89 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Medium-Sized Business Electricity Market In the medium sized business market total customer numbers in Q were 25,965 and total consumption was 1,059,910 MWhs, compared to total customer numbers in Q of 24,742 and total consumption of 1,054, 762 MWhs. Medium-Sized Business Electricity Market Share 0.91% 4.93% 2.67% 5.80% Electric Ireland 22.13% 32.00% 39.46% Airtricity Bord Gáis Energy 4.02% 60.69% Energia 7.33% 12.23% Vayu Others 7.82% (a) Customer Nos (b) MWhs Figure 9.7 Q4 Medium Business Electricity market Share Q Medium Business % change Q3-Q4 % change Market Share Sites MWhs Sites MWhs Sites MWhs Electric Ireland 15, , % -0.23% 0.76% 0.73% SSE Airtricity 1, , % -3.3% -3.56% -5.58% Bord Gáis Energy 1,043 82, % -0.31% 0.08% 0.36% Energia 5, , % 1.36% -1.33% 0.05% Vayu , % -0.03% 0.15% 0.26% Others 1,281 61, % 2.51% 3.91% 4.19% Total 25,965 1,059,911 Table 9.6 Number of sites and MWhs per supplier In Q Electric Ireland held the greatest market share in the medium business market with 39.46% of the market by consumption. This was followed by Energia with 30%, SSE Airtricity with 12.23% and Bord Gáis Energy with 7.82%. SSE Airtricity lost the most in terms of consumption between 2015 and 2016, with a decrease in 5.58% of market share by consumption. All other suppliers gained a 89

90 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? slight increase in market share (in terms of consumption) between 2015 and 2016, but none of relevant significance. The figures below show the market share trend in terms of customer numbers and MWhs from 2009 to Q in the medium business sector. Electric Ireland experienced a decline in its market share over a number of years following price deregulation of the business market in October 2010, however its market share increased between 2013 and Bord Gáis Energy s market share has declined over time. SSE Airtricity s market share increased following deregulation but decreased in recent years. In summary, from figures 7.8 and 7.9 we can see a diversification of market share in the medium business market over time. 100% 80% 60% 40% 20% Medium business market share over time by customer numbers 0% Electric Ireland Energia SSE Airtricity Bord Gáis Energy Vayu Others Figure % 80% 60% 40% 20% 0% Medium business market share over time by consumption Electric Ireland Energia SSE Airtricity Bord Gáis Energy Vayu Others 90

91 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Figure Large Energy Users (LEUs) In the LEU electricity market total customer numbers in Q were 1,796 and total consumption was 2,383,124 MWhs, compared to 1,744 customers and total consumption of 2,291,271 MWhs in Q LEU Market Share 7.13% 7.80% 3.24% 11.41% Electric Ireland 18.93% 9.35% 15.09% 41.70% 12.93% 8.72% 21.36% 42.33% Airtricity Bord Gáis Energy Energia Vayu Others Customer Nos (b) MWhs Figure 9.10 Q4 LEU Electricity market Share Q LEU Market Share % change Q3-Q4 % change Sites MWhs Sites MWhs Sites MWhs Electric Ireland 749 1,008, % -1.52% -3.08% -3.04% SSE Airtricity , % -1.95% -3.6% -2.79% Bord Gáis Energy , % -0.01% -0.39% 1.92% Energia , % 0.07% 1.1% -0.2% Vayu , % 0.04% 0.99% -0.08% Others , % 3.38% 4.99% 4.19% Total 1,796 2,383,123 Table 9.7 Number of sites and MWhs per supplier In Q Electric Ireland held the greatest market share in the large energy users market with 42.33% of the market by consumption. This was followed by SSE Airtricity with 21.36%, Energia with 12.93% and Bord Gáis Energy with 8.72%. The largest decrease in market share in this segment was for Electric Ireland with a loss of 3.04% in consumption between Q and Q This was closely followed by SSE Airtricity with a loss of 2.79% in consumption between Q and 91

92 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Q Bord Gáis Energy gained the most market share in this segment, with an increase of 1.92% in consumption between 2015 and The figures below show the market share in terms of customer numbers and consumption from 2009 to Q SSE Airtricity has experienced gains in terms of customers and consumption since % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% LEU market share over time by customer numbers Electric Ireland Energia SSE Airtricity Bord Gáis Energy Vayu Others Figure % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% LEU market share over time by consumption Electric Ireland Energia SSE Airtricity Bord Gáis Energy Vayu Others Figure

93 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Gas Market The gas market is reported as four different market segments Domestic market this represents non-daily metered (NDM) residential customers. Industrial and commercial (IC) market represents businesses with a supply point capacity of below 3,750kWh and consumption level below 73,000kWh Fuel variation tariff (FVT) market NDM gas customers with a supply point capacity of above 3,750kWh and consumption level above 73,000kWh. Regulated tariff formula (RTF) market annual consumption of between 5.5GWhs and 264 GWhs. This section contains the market share data for all gas suppliers. Data is presented in terms of actual customer numbers and consumption (GWhs) for Q as well as showing the change in percentage share since the previous year. From the Q annual report, the gas market share segments will change based on discussions with GNI to better align the names and classifications of the gas market segments with the GNI code of operations. A number of the current nondomestic gas definitions were defined when under price regulation, so are now no longer applicable after deregulation of the market. 93

94 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? The only market segment that will change will be the current RTF market, which will be split into the Daily Metered (DM) and Large Daily Metered (LDM) market segments. FVT-eligible gas will be renamed medium-sized non-domestic gas. These changes are set out below: Current Name of Market Segment Total Non-domestic gas Industrial/Commercial gas (NDM IC customers with a SPC below 3,750kWh) Revised Names and definitions Total non-domestic gas Industrial/Commercial gas (NDM IC customers with a SPC below 3,750kWh) Fuel-Variation Tariff eligible gas (NDM FVT customers with a SPC above 3,750 kwh) Regulated Tariff Formula eligible gas (Annual consumption of between 5.5GWhs and 264GWhs) Medium-sized non-domestic gas (NDM FVT customers with a SPC above 3,750 kwh) Daily Metered (DM) Customers Large Daily Metered (LDM) Customers excluding power gens Overall trends in retail gas Customer Numbers - Gas Market Domestic Market Q Q Q Q % change between 2015 and , , , , , , , % IC 23,801 23,780 23,840 24,043 24,043 23,740 23, % FVT 1,790 1,792 1,798 1,761 1,761 1,789 1, % RTF % Total Gas Market 672, , , , , , , % Table

95 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Domestic Market Q Consumption - Gas Market (GWhs) Q Q Q % change between 2015 and ,103 1, ,500 7,284 7,158 6, % IC ,991 1,893 1, % FVT ,459 2,419 2, % RTF 2,235 2,242 2,060 2,192 8,726 8,286 6, % Total Gas Market 6,919 4,371 3,111 6,062 20,460 19,756 19, % Table 9.9 In the gas market, the total number of customers in 2016 was 677,668 and total consumption was 20,460m GWhs. There was an overall decrease of 2.44% in customer numbers (with varied change across all market segments). Consumption increased across all market segments with an overall total of 3.56%. These changes represent an increase in gas consumption by customers, the greatest increase was exhibited by RTFs. Domestic Market Consumption per customer, kwhs % change between 2015 and ,134 11, % IC 79,739 82, % FVT 1,353,270 1,396, % RTF 32,245,136 33,691, % Table

96 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Domestic gas market In the domestic gas market, the total number of customers in Q was 648,992 and total consumption was 2,495GWhs. 5.74% 22.75% 5.86% 0.4% 14.27% 50.97% Domestic Market Share 6.38% 6.45% 0.19% Airtricity 21.96% 14.82% 50.19% BG Energy Electric Ireland Flogas Energia PPP (a) Customer Nos (b) GWhs Table 9.11 Number of sites and GWhs per supplier Q Bord Gáis Energy SSE Airtricity Electric Ireland Domestic Market Share % change Q3-Q4 % change Sites GWhs Sites GWhs Sites GWhs 332,150 1, % -1.51% -0.29% -0.07% 92, % 0.54% 0.07% -0.53% 148, % 0.64% -0.22% -1.06% Flogas 37, % 0.03% -0.04% 0.86% Energia 38, % 0.1% 0.13% 0.6% Others 2,613 5 Total 651,605 2,500 Figure 9.13 Q4 Domestic gas market Share In Q Bord Gáis Energy held the greatest market share in the domestic gas market with 50.97% of the market by customer numbers. This was followed by Electric Ireland with 22.75%, SSE Airtricity with 14.27%, Energia with 5.86% and Flogas with 5.74%. The largest decrease in market share in this segment was for Bord Gáis Energy with a loss of 0.29%% in customer number between Q and Q Energia 96

97 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? gained the most market share in this segment, with an increase of 0.13% in consumption between 2015 and The figures below show the market share trends in terms of customer numbers and GWhs from 2009 to Q There has been a significant change in Bord Gáis Energy s market share over time 23. This is a result of more suppliers entering the market, which has led to greater diversity and choice for Ireland s gas consumers. 100% 80% 60% 40% 20% Domestic gas market share over time by customer numbers 0% Bord Gáis Energy SSE Airtricity Electric Ireland Flogas Energia PrePayPower Figure % 80% 60% 40% 20% Domestic gas market share over time by consumption 0% Bord Gáis Energy SSE Airtricity Electric Ireland Flogas Energia PrePayPower Figure Which as the previous incumbent was price regulated until

98 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? Industrial and commercial (IC) Gas market In the IC gas market, the total number of customers in Q was 24,043 and total consumption was 632 GWhs. NDM IC Market Share 1.90% 4.77% 4.21% 3.94% Airtricity 20.32% 22.90% 43.52% % 37.9% Bord Gáis Energy Electric Ireland Flogas Energia 6.59% 5.48% (a) Customer Nos (b) GWhs Figure 9.16 Q4 IC gas market Share Q Bord Gáis Energy NDM IC Market Share % change Q3-Q4 % change Sites GWhs Sites GWhs Sites GWhs 10, % 4.97% -0.38% 1.82% SSE Airtricity 1, % -0.08% -0.59% -0.82% Electric Ireland 1, % -0.15% -0.45% -0.57% Flogas 5, % -6.72% 1.30% -0.92% Energia 4, % 0.97% 0.00% -0.24% Vayu % 1.00% 0.13% 0.73% Total 24, Table 9.12 Number of sites and GWhs per supplier In Q Bord Gáis Energy held the greatest market share in the industrial and commercial gas market with 43.52% of the market by customer numbers. This was followed by Flogas with 22.9% and Energia with 20.32%. The largest decrease in market share in this segment was for SSE Airtricity with a loss of 0.59% of the market in terms of customers between Q and Q Flogas increased its market share by 1.3% 98

99 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? The figures below show that market share has changed significantly between Q and Q in terms of customer numbers and consumption. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% IC gas market share over time by customer numbers Bord Gáis Energy SSE Airtricity Electric Ireland Flogas Energia Vayu Others Figure % 80% 60% 40% 20% IC gas market share over time by consumption 0% Bord Gáis Energy SSE Airtricity Electric Ireland Flogas Energia Vayu Figure Fuel Variation Tariff (FVT) Gas market24 In the FVT gas market, the total number of customers in Q was 1,761 and total consumption was 2,459 GWhs. 24 There are no longer regulated business tariffs; however, the reporting structure has been maintained for 99

100 HOW HAS THE MARKET DEVELOPED IN THE LAST YEAR? FVT Market Share 23.40% 14.54% 3.01% 37.37% 21.93% 14.35% 3.37% 36.47% Airtricity Bord Gáis Energy Electric Ireland Flogas Energia 20.05% 1.65% 22.39% 1.5% Vayu (a) Customer Nos (b) GWhs Figure 9.19, Q4 FVT gas market Share Q Bord Gáis Energy FVT[1] eligible % change Q3-Q4 % change Market Share Sites GWhs Sites MWhs Sites MWhs % 3.78% -0.87% 2.35% SSE Airtricity % 0.60% -0.06% -1.19% Electric Ireland % -0.16% 0.42% 0.32% Flogas % -4.48% -0.13% -1.58% Energia % 0.04% 0.87% 0.60% Vayu % 0.22% -0.22% -0.50% Total 1, Table 9.13 Number of sites and GWhs per supplier In Q Bord Gáis Energy held the greatest market share in the fuel variation tariff gas market with 35.83% of the market by customer numbers. This was followed by Energia with 23.4%, Flogas with 20.05% and Vayu with 14.54%. consistency and to allow for comparison 100