Energy retail and consumer protection

  • Retail
MMR_Retail_Report

2023 ACER-CEER Market Monitoring Report - monitoring the retail markets in 2022

ACER and the Council of European Energy Regulators (CEER) publish today their Energy Retail and Consumer Protection 2023 Market Monitoring Report (MMR).

On annual basis, ACER and CEER monitor the European internal energy markets of electricity and natural gas. 2022 was an unprecedented year for EU energy consumers and retail markets, as the post-pandemic recovery and Russia’s invasion to Ukraine caused wholesale energy prices to spike, which then heavily impacted consumers’ bills.

Against this background, this year’s energy retail and consumer protection MMR (based on 2022 data) looks at:

  • The number of measures implemented in EU Member States as a response to the energy crisis, the budget allocated for financial support to consumers and how this evolved during the year in different countries.
  • The status of retail energy markets across Europe.
  • The European energy consumption and energy retail price patterns over 2022.
  • The level of consumer information provided via energy bills and the number of consumer complaints handled during 2022.
  • The level of consumer protection and engagement (including how the role of consumer and the definition of energy poverty changed) across Europe.
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What are the main findings?

  • In most Member States, retail electricity and gas prices rose significantly in response to wholesale price spikes. Despite the recent (2023) wholesale electricity prices reductions, end-user prices are falling at slower rates.  
    During the crisis, governments in each Member State stepped in to support their residential and industrial consumers. Such support comes at a cost to national budgets. An important lesson from 2022 is the need to further target support measures (if needed) and to incentivise cutting energy consumption.
  • The crisis triggered demand reductions, particularly among industrial customers. On the contrary, energy demand in the household sector was not highly affected by the energy crisis.
  • While in some Member States the uptake for fixed price contracts increased (compared to 2021), in others, customers switched to a variable price or other type of price contracts.
  • The number of consumer complaints increased during the 2022 crisis.
  • Thirteen Member States have successfully rolled out smart meters, while five countries have not yet started the roll-out. Hence not all consumers have the same opportunities to actively engage in energy markets.
  • Consumer bills and comparison tools fail to meet the criteria as set out in EU laws. High-quality tools are needed for consumers’ informed choices.
  • Practice shows that electricity household consumers are willing to reduce peak-time usage. 
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Report

The report also provides a series of recommendations, including:

  • A list of possible targeted support measures that Member States could opt for in the future.
  • The need to enhance monitoring and simplify access to information, so consumers can be more engaged, even in rapidly evolving market situations.
  • The requirement for comparison tools covering the entire market to meet the standards set by EU law. It is key that consumers are able to understand their bills and are in a position to take informed decisions about their energy consumptions.

Access the 2023 energy retail and consumer protection MMR.

See the corrigendum.

Infographic

Access the report's infographic.

Webinar

Missed our webinar? See the slides and watch the recording.


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Decarbonised gases

  • Gas
MMR banner

2022 ACER-CEER Market Monitoring Report - monitoring the gas wholesale markets in 2021

This new Decarbonised Gases Volume describes the current state of EU decarbonised gases and hydrogen, and it examines the regulatory provisions and market context that may drive their evolution in the mid-term.

In particular, it looks at:

  • Renewable and low carbon gases production, consumption and price levels, as well as their prospects from now until 2050;
  • Key regulatory provisions governing the access of decarbonised gases to the market; and
  • Infrastructure expansion required to facilitate the use of biomethane and hydrogen.

Report

What are the main findings?

  • Current production of renewable and low carbon gases is modest relative to future policy expectations;
  • Production goals have been accelerated as a result of the supply diversification efforts due to the Russian invasion of Ukraine in 2022;
  • Numerous challenges are being identified that may hinder the expansion of decarbonised gases and hydrogen production, including the need for:
    • improving infrastructure interconnections,
    • developing greater end-use demand,
    • new infrastructure investments; and
  • Energy regulators see the need to clarify the regulatory, financial and technical aspects in time to ensure gas sector decarbonisation and clean hydrogen sector development.

Key recommendations

The Report includes a set of recommendations on how to facilitate the access of decarbonised gases to the market and how to strike a balance between enabling a decarbonised gases market and ensuring regulatory certainty. 

The main regulatory recommendations can be grouped into six areas:

  • Technical rules – quality of gas must be defined;
  • Market rules – access to networks should be facilitated;
  • Access conditions – appropriate tariffing arrangements needed;
  • Participation – identification of the appropriate bodies to undertake new roles needed;
  • New investments – frameworks must be defined;
  • Support – early phase technologies need to be identified.

Access the Decarbonised Gases Volume.

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Monitoring the internal natural gas markets

  • Gas
MMR banner

2022 ACER-CEER Market Monitoring Report - monitoring the gas wholesale markets in 2021

The MMR offers an overview of EU gas markets in 2021 and in the first half of 2022. This edition focuses on analysing the various drivers causing unprecedented price escalation, includes recommendations for further market development and contains proposals to secure supplies and to hedge price exposure.

Report

The report looks at:

  • gas market developments and the drivers of the unprecedented gas price rise,
  • the level of competition and gas market functioning using mainly the metrics in the ACER Gas Target Model,
  • the positive effects on markets of the implementation of the gas Network Codes.

It has a set of recommendations:

  • to speed up a single Internal Gas Market in Europe,
  • to secure gas supplies for Winter 2022 and hedge price exposure amid the challenging market circumstances.

The main findings of the 2021 Gas MMR are:

  1. Record high EU LNG imports (mostly from the US) and falling gas demand are (so far) offsetting the lower Russian pipeline flows in 2022.

  2. Markets expect gas prices to remain high in the coming months driven by concerns regarding supply.

  3. The EU gas market delivers benefits in terms of trade, innovation signals and security of supply. The focus is on finding policy responses to secure supply (e.g. filling storage, diversification of supply etc.).

Access the report.

Webinar recording

Missed our webinar? See the presentation and the recording.


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Energy retail and consumer protection

  • Retail
MMR banner

2022 ACER-CEER Market Monitoring Report - monitoring the retail markets in 2021

The ACER-CEER Energy Retail and Consumer Protection Volume of the Market Monitoring Report offers an overview of retail energy market developments across the European Union during 2021. Given the significance of the current energy crisis in Europe the Volume also includes some recent pricing information for 2022 which has been provided by VaasaETT.

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    It looks at:

    • retail market performance, supplier concentration levels and the availability of gas and electricity offers to consumers;
    • the price paid by energy consumers for both gas and electricity across the European Union; and
    • the impact of high energy prices on household expenditure. 

    It issues a set of recommendations:

    • to ensure that measures to assist consumers in response to the energy crisis are targeted at those most in need; 
    • to ensure that quality comparison tool websites are available to European energy consumers; and
    • to ensure that National Regulatory Authorities (NRA) check the compliance of energy consumer bills with the common rules for the internal market for electricity. 
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    Report

    Some main findings:

    1. Retail energy prices started an upward trend at the end of 2021, these price increases to continue during 2022 and into 2023.
    2. Electricity and gas price increases will put a greater number of consumers at risk of energy poverty.
    3. Supplier bankruptcies have resulted in less choice in the market for energy consumers.
    4. Consumers have demonstrated a preference for fixed price contracts. However, suppliers will struggle to offer such contracts at competitive prices in 2022 and likely into 2023.

    See the report.

    Webinar

    Missed our webinar? Watch the recording here!


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    Prequalification processes for the provision of balancing services

    • Electricity
    Electricity pylon

    2022 Market Monitoring Report - monitoring the electricity wholesale markets in 2021

    As part of its electricity wholesale market monitoring, ACER conducted a study on the prequalification processes for the provision of balancing services. The ACER study:

    • Provides an overview of the different electricity balancing prequalification approaches in Europe;
    • Identifies some practices that may be considered by grid operators to remove market entry barriers for new and small market participants, including consumers, in providing balancing services.

    Transmission System Operators (TSOs) must keep the electricity system constantly in balance. To maintain system frequency, TSOs procure balancing services from Balancing Service Providers (BSPs).

    EU rules (the Electricity Balancing Regulation) require TSOs to develop prequalification processes for potential BSPs. This allows potential BSPs (such as generators or consumers) to provide proof that they fulfil the requirements for rendering one or more types of balancing services necessary to guarantee the grid frequency.

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    How does this ACER study support EU security of energy supply and consumers?

    Demand response programmes allow consumers to adjust their consumption at key times to help grid operators to manage peak electric demand and lower system costs. Currently consumers do not participate to a large extent in electricity markets. However, the flexibility that smaller market participants (including demand response, distributed generation and energy storage solutions) could provide is needed more and more for security of supply. ACER strives to remove barriers that hamper these smaller market participants entering and participating in electricity markets.

    For example, some consumers are capable of providing balancing services through bi-directional charging of their electric vehicles (EVs). For the integration of electric vehicles into balancing services, a prequalification process is necessary. This process should prove the technical suitability of the assets for providing the different types of balancing products. In the product prequalification processes for providing balancing services, the TSO verifies the compliance of the assets of the BSP with the technical requirements set by the TSO.

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    Report

    Overall, there is considerable scope for grid operators to reduce market entry barriers to new and small market participants, including small-scale demand response, in providing balancing services.

    • Electricity balancing prequalification approaches differ significantly across Member States (MSs) and across balancing products.
    • Only a few TSOs apply a simplified approach to product prequalification for some balancing products on a general basis.
    • Prequalification of groups of units is still not possible in some MSs. Moreover, where it is possible, some TSOs do not allow generation and consumer/demand units to be aggregated in the same group. This may represent an entry barrier for new market participants that aggregate multiple types of units (e.g. EVs, solar PV panels, household consumers, etc.).
    • In the first-time prequalification of groups comprising small units (e.g. EVs, solar PV panels, household consumers, etc.), a few TSOs still require each individual unit to prequalify separately. On the contrary, some TSOs make simplifications or exceptions to simplify and speed-up the prequalification of these groups.
    • There is considerable room for TSOs to simplify the re-prequalification of groups when they are subject to changes in units such as add-ons and removals. Some TSOs limit the need for this re-prequalification to only significant changes.

    The ACER study showcases some practices that could be considered by TSOs to improve and simplify the product prequalification process for new and small market participants, including demand response:

    • Setting a product prequalification for groups aggregating any type of technology;
    • Setting a threshold for re-prequalification only after significant changes in prequalified units or groups;
    • Using type-approval for small units;
    • Verifying the compliance of assets to technical requirements during the service delivery rather than before.

    Access the ACER Study.

    Dashboard

    Check out the interactive charts (filter by country or balancing service).

    Yes

    Progress of European electricity market integration

    • Electricity
    Power pole

    2022 Market Monitoring Report - monitoring the electricity wholesale markets in 2021

    The MMR presents the main results of monitoring the European electricity and gas markets and recommends further actions to foster their integration.

    In 2022, unlike during previous years, ACER does not publish a single report gathering all monitored aspects of wholesale electricity markets but rather a series of brief overviews of electricity markets in 2021. The progress report on European wholesale electricity market integration is the third of these publications. It follows the ACER overview of the key developments in European wholesale electricity markets in 2021 (February 2022). In addition, ACER published its Final Assessment of the EU Wholesale Electricity Market Design in April 2022.

    Report

    ACER finds progress in short-term electricity market integration but forward market liquidity remains modest. The main wholesale electricity market integration trends identified in 2021:

    • Moderate increases in levels of cross-zonal capacity where Net Transfer Capacity calculations apply, consistent with ACER's 70% monitoring report;
    • Progress in the integration of EU markets in day-ahead, intraday (instrumental for the large scale integration of renewable energy resources) and in particular balancing markets;
    • A European platform for operating the imbalance netting process was achieved (24 June 2021). The platform coordinates ‘imbalance netting’, a process optimising the use of frequency restoration reserves among Transmission System Operators (TSOs);
    • Although forward market liquidity generally decreased in 2021, liquidity remained stable in day-ahead markets, and continued increasing in intraday markets. Overall, intraday liquidity has been increasing steadily since 2019; and
    • TSOs need to make a further 40% of cross-zonal capacity on electricity interconnectors available to meet the minimum 70% target.

    Access the ACER progress report on European wholesale electricity market integration.

    Yes

    Key developments in European electricity wholesale markets

    • Electricity
    Electric pillars in a forest

    2022 Market Monitoring Report - monitoring the electricity wholesale markets in 2021

    The MMR presents the main results of monitoring the European internal electricity and gas markets and recommends further actions to foster their integration, as well as providing guidance and evidence on how energy markets can perform more efficiently.

    It normally comprises three volumes analysing respectively: the Electricity Wholesale Market, the Gas Wholesale Market, and the Energy Retail Market and Consumer Protection. 

    In 2022, unlike previous years, ACER will not publish a single report gathering all monitored aspects of the Wholesale Electricity Markets in 2021 but a series of brief overviews. This overview is the first of these publications.

    Report

    What were the main monitoring trends in wholesale electricity markets in 2021?

    • Recovery of the electricity demand was driven by the economic recovery. This led to a series of changes in generation technologies. Coal was more used compared to 2020 to meet increased demand. As a result, generation from fossil fuels did not decrease in 2021. Generation from renewables was above fossil fuels for the second year in a row and new renewables installed capacity kept on increasing, contributing to the energy transition.

    • A sharp increase in coal generation took place due to the economic recovery driving demand and high gas prices, partially hampering renewables generation growth.

    • The well-known sharp increase of electricity wholesale prices in all countries contributed to reinforce coal usage and fostered a debate on consumer protection and empowerment. To different degrees, all European countries have been affected, especially those dependent on gas for a large portion of their electricity generation.

    • A constant increase of negative Day Ahead electricity prices compared to pre-pandemic values brings into focus the need for storage and demand side response, and on the importance of consumer empowerment.

    Access the report.

    Dashboard

    Generation from renewables was above fossil fuels for the second year in a row and new renewables installed capacity kept on increasing, contributing to the energy transition.

    Check the evolution of generation from renewable energy sources compared to fossil fuels by selecting the years 2020 and 2021.

    Select the years 2016 - 2021, and see how the installed capacity from renewable and conventional generation technologies has changed over the years.

    Access the dashboard.

    Yes

    ACER-CEER Market Monitoring Report 2021

    • Electricity
    • Gas
    • Retail
    MMR

    ACER-CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2020

    The Electricity Volume of the Market Monitoring Report (MMR) provides information on the status of Europe’s electricity wholesale markets in 2020. The MMR covers the European Union (EU) Member States and, for some topics, the United Kingdom, Norway, Switzerland and the Energy Community (EnC) Contracting Parties (CPs).

    The Gas Volume of the MMR presents the results of monitoring the status of the European gas markets in 2020 and the progress made towards a fully functioning internal gas market in the light of the existing EU Regulation. This year, the Volume puts further emphasis on tracking the progress towards decarbonising the European gas markets.

    The Retail Volume looks back at the developments in Europe’s energy retail markets and customer protection measures during 2020. Notwithstanding this, the unprecedented increase in electricity and gas wholesale prices that have taken place in the second half of 2021 merit a few moments of reflection. It is important to note that while energy prices decreased in 2020 in response to the COVID-19 pandemic, during 2021 wholesale energy prices have increased significantly as a result of various supply and demand-related factors in Q3 20211 . These wholesale price increases will, result in energy consumers paying higher prices for energy needs and will disproportionately impact the vulnerable and energy poor.

    Electricity Wholesale Volume

    Gas Wholesale Volume

    Energy Retail and Consumer Protection Volume

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    ACER-CEER Market Monitoring Report 2020

    • Electricity
    • Gas
    • Retail
    MMR

    ACER-CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2019

    2020 has been a challenging year with the current global health pandemic. Besides our usual comprehensive assessment of developments in the electricity and gas sectors and progress towards the completion of Europe’s internal energy market (IEM), this year in our Market Monitoring Report (MMR) we therefore also provide insights on the impact of the COVID-19 on Europe’s energy markets.

    This MMR (based on 2019 data) comprises three volumes: electricity wholesale markets, gas wholesale markets, and retail markets and consumer rights. The latter now contains the various ACER and CEER reports in one volume. Each volume contains insights on how the pandemic has impacted Europe’s energy systems. For example, the retail volume provides an overview of the responses of the National Regulatory Authorities (NRAs) to protect consumers’ energy supply and measures to support suppliers. The wholesale gas and electricity volumes report on the unprecedented decline in demand.

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    Energy regulators keep the lights on and Europe’s energy markets working

    Keeping the lights on and energy markets functioning is the normal job of the energy regulator. At no time is this role more important than during a global health crisis. Keeping the lights on and hospitals equipment running saves lives. Guaranteeing essential services such as gas, heat and power for household appliances and devices such as laptops enables people to work from home. Despite the crisis, the electricity and gas market integration process did not stall. This is good news. It also speaks of the value of having integrated well-functioning energy markets.

    Building Europe’s green recovery and the role of market monitoring

    In a post-COVID-19 era, achieving a sustainable and resilient recovery will be a priority. In this context, cost-efficient integration of the internal energy market supported by extensive market monitoring becomes more relevant than ever. Market monitoring captures the status of energy markets and identifies remaining barriers to EU market integration. In particular, the integration of power markets and the decarbonisation of gas are critical to meet the ambitious energy and climate policy targets set for Europe. In our view, the Green Deal is an opportunity to integrate sustainability objectives into Europe’s plans to economic recovery.

    Key Findings and Recommendations

    Europe’s clean energy transition must be built on an efficient and well-integrated IEM. Overall, keeping the focus in market integration is key to ensuring the EU energy union targets are met in a cost-efficient manner.

    Electricity and gas market integration continued to progress in 2019

    Progress in the functioning of Europe’s electricity wholesale markets is noticeable, though more advances are needed (in particular, finalising day-ahead market coupling). Available instruments must be utilised to increase the efficient use of interconnectors as required by the 70% cross-zonal capacity target and we are pleased to report that we will soon publish a dedicated report on this. Looking ahead, sizable security of supply benefits are expected as Europe shifts towards a better approach to assess resource adequacy.

    Build upon the current gas market framework to decarbonise gas

    Gas wholesale markets continue to function well based on the implementation of the current market rules. However, with the European Commission’s proposal to reduce emissions further for Europe to be on a responsible path to becoming climate neutral by 2050, as well as the resources earmarked for the EU recovery plan, the currently low uptake of carbon neutral gases will need increased attention. We recommend that any upgrade of the internal gas market rules, targeting an increasingly decarbonised sector, be built on the foundations of the current market framework. This to avoid the transition leading to new national market fragmentations, whilst at the same time retaining the significant benefits for consumers already in place.

    Without efficient energy infrastructure investment Europe will not be able to deliver on the ambitious decarbonisation outlook set for Europe’s energy sector. ACER and CEER have recently set out a suite of recommendations to improve infrastructure planning and regulatory oversight in our joint ACER/CEER position paper on the review of the TEN-E Regulation. In the joint ACER/CEER Gas Bridge beyond 2025 Conclusions paper we also address important regulatory issues such as power to gas networks or repurposing existing gas networks for hydrogen.

    Electricity prices for household and industrial consumers throughout Europe increased in 2019

    Retail gas prices also increased for households but they fell for industrial gas consumers. Our monitoring shows that the state of retail markets is more disparate across the Union than for wholesale markets.

    Tackling climate change will involve a profound transformation of our economy and will significantly influence the way we use and interact with energy in our everyday life. For the energy transition to be successful, consumers will need to be informed, supported and nudged throughout this transformation. Our market monitoring underlines the importance of ensuring that consumers have ample choice and that their rights are adequately protected, not least the more vulnerable consumer segments. This requires well-functioning retail markets. We are committed to continue monitoring progress towards the completion of a well-functioning internal energy market and to maintain the stability of the energy system as a whole during and after this time of crisis.

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    Electricity Wholesale Volume

    Gas Wholesale Volume

    Energy Retail and Consumer Protection Volume

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    ACER-CEER Market Monitoring Report 2019

    • Electricity
    • Gas
    • Retail
    MMR

    ACER-CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2018

    In 2018, annual average day-ahead (DA) electricity prices increased in all bidding zones, except in Romania. The highest annual average DA prices were observed in the British, Italian, Irish (Single Energy Market, SEM), Greek and Iberian markets, whereas the lowest annual average DA prices were recorded in the Bulgarian, Nordic and German markets. The number of price spikes (200) significantly decreased in 2018 compared to the previous two years (more than 1,000 each year). The significant drop in the number of DA price spikes across the EU is partly the result of mild weather conditions, which smoothened the load and therefore diminished the frequency of scarcity in most Member States (MSs) in 2018. Future situations of scarcity are likely to result in the reappearance of more frequent price spikes. In the absence of market power or price manipulation, price spikes may be a sign of well-functioning markets and tend to reduce the need for implementing capacity mechanisms (CM), possibly categorised as state aid, to the benefit of end consumers.

    Although price convergence is not an objective as such, it provides an indication of the level of electricity market integration. In 2018, different levels of price convergence persisted across Europe. Average absolute DA price spreads ranged from less than 0.5 euro/MWh on the borders between Estonia and Finland, Portugal and Spain, and Latvia and Lithuania, to 10 euros/MWh or more on several borders, e.g. on all Bulgarian and British borders, or on the border between Austria and Italy (see Table i). The persistent price differentials confirm how relevant it is to complete market coupling on all borders and to maximise the amount of cross-zonal capacity made available for trade, particularly on borders with the highest price spreads.

    Electricity Wholesale Volume

    Gas Wholesale Volume

    Retail Markets Volume

    Consumer Empowerment Volume

    Yes
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