A survey recently conducted in the Nordic countries shows that most household customers know that they can switch electricity supplier. At the same time, the survey shows that many customers are inactive. The main reason for inactivity is often that the saving potential is considered too small.
Below are some of the findings from the web survey conducted in September 2018 among a representative sample of 6,000 Nordic electricity customers; 1,500 respondents from Denmark, Finland, Norway and Sweden. All respondents participate in the decision-making regarding the electricity contract in their household.
The survey shows that 26 per cent of electricity customers have been active and signed an electricity contract in the past year. On top of that, 16 per cent have compared contracts in the past year without switching and are so-called aware customers. 58 per cent have neither switched nor compared contracts in the past year or more, and are, hence, considered ‘inactive’ customers.
The share of active customers is highest in Finland. Norway and Finland have the highest shares of aware customers. The Danish customers are the most inactive ones.
Amongst those that have neither signed nor compared electricity contracts the last year (so-called inactive customers), the most common reasons given for not switching/comparing are satisfaction with current contract and small financial gains.
All in all, Danish customers differ from the other Nordic customers. They use less electricity; have a lower level of activity in the electricity market; have less knowledge both of terms of contracts, the market players and price comparison tools; they also have less confidence in the electricity market. Finnish and Swedish customers are similar when it comes to consumption, activity level and reasons for (not) switching/comparing contracts. Norwegian customers stand out, with a much higher consumption of electricity, compared to others. In addition, Norwegian customers find the switching process somewhat easier than the other customers in the survey.
Active customers spend the least on electricity, have the best knowledge of the electricity market and find it the easiest to switch contracts. In addition, they regularly compare contracts. Inactive customers are characterized not only by rarely switching and comparing contracts, but also by knowing the least about their electricity consumption. They have the poorest knowledge of the electricity market as such, as well as their own terms of contract, are the ones that read the least of the information on their bill compared to the rest of the respondents and find it most difficult to switch contracts.
When it comes to gender and age differences, these can be summed up as follows. Men are somewhat more active electricity customers than women; they more often compare contracts, initiate new contracts themselves, know more about both the electricity market and their contractual terms, read more of the information on the bill and find the switching process easier. However, compared to men, women deem it more important to have a green contract, and prefer more strongly that they receive a combined bill rather than receiving two separate bills from their grid company and supplier. Younger electricity customers have the poorest knowledge of the electricity market and their own contractual terms, find it more difficult to sign contracts and are the ones that read the least of the information on their bill.
The Nordic energy regulators (NordREG) will now analyze the results of the survey and use it as one of many inputs when the retail markets in the Nordic region are developed further.
For more information please contact:
Mattias Johansson, Retail Market Expert at Energimarknadsinspektionen and Chair of NordREG Retail Market Working Group, +46 16 16 27 42
Søren Brandt Clausen, Forsyningstilsynet,+45 4171 5381
Patrick Malén, Legal Adviser at Energiavirasto, +358 5050 126
Stian Andre Staurvik Skaalbones, Adviser at Norges vassdrags- og energidirektorat, +47 22 95 90 29
Read the main report “Nordic Customer Survey 2018 – Consumer behavior in the Nordic electricity market”.