ACM launches investigations into energy auctions

The Netherlands Authority for Consumers and Markets (ACM) has launched investigations into the functioning of energy auctions for consumers. ACM recently received indications that these energy auctions do not always function well. ACM will be examining whether energy auctions offer what they promise, and also whether or not competition between energy suppliers is restricted. If so, consumers might have missed out on certain benefits. If it turns out that something is not right, ACM will step in. If it is revealed that the auctions do function properly, then it is important that consumers know that they can take part in energy auctions with confidence.

Energy auctions are good for the market

For consumers, energy auctions are an easy way to switch energy suppliers. That way, the share of consumers that switch increases, and, as a result thereof, so will competition in the energy market. Every year, various organizations organize numerous energy auctions. In the run-up to an energy auction, organizations recruit as many consumers as possible that may wish to switch. The auctions themselves are usually left to specialized firms. They run the auctions where energy companies offer competitive energy contracts. At the end of the auction, consumers can then accept these offers, thus switching energy companies.

The energy market, and switching energy suppliers

In 2013, approximately 13 percent of all energy consumers switched energy suppliers. Of all consumers, 44 percent has switched energy suppliers at least once. Over 75 percent of the switchers have switched individually, while 15 per cent have done so through an auction or a collective. Virtually all switchers (94 percent) are satisfied with the switching process. By switching, consumers are able to save up to EUR 300 per year.

In late-2013, the average energy bill of Dutch households was EUR 1,727. The energy market is a highly concentrated market. The combined market share of the ‘big three’ (Eneco, Essent and Nuon) is approximately 80 percent.