Large power companies lose more than a million customers in three years | Companies

The loss of customers by large electricity companies (Endesa, Iberdrola and Naturgy) is a trend that has been observed for some years. However, the decline seems to have been exacerbated by the Covid pandemic, to the point that more than a million of the clients of these companies (specifically, 1,120 million) have changed suppliers in the last three years, according to data from the CNMC for the third quarter of 2018, and those provided by companies as of September 30, 2021.

The situation is especially serious in the case of Endesa, which has lost in this time 786,535 contracts, 7.5%, both in the free and regulated markets. This evolution has meant that, for the first time, Iberdrola has exceeded it in quota of market in Spain, therefore, although the client portfolio of the latter has also suffered, the fall has been less, with a decrease of 168,514, which represents 1.7% less in three years (see graph).

As this is a net loss (the transfer of users from their regulated traders to the free market, or vice versa, has not compensated for the bleeding) the lost supplies have gone directly to swell the portfolios of independent traders of the liberalized market, such as Repsol, Cide, Fenie, Audax, Holaluz, Aldro and others. The CNMC had registered a total of 288 electricity retailers at the end of 2020.

In this way, Endesa and Iberdrola have dropped from the mythical barrier of 10 million customers each: the first has gone from 10,523 million in 2018 to 9,736 million at this time and the second, from 10,120 million to 9,951 million in the same period. The decline occurs both in its free market clients (and in the regulated one, although in this case, many have been able to switch to the free market subsidiary of the same group.

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Although the CNMC does not provide recent data on the retail electricity market, which could show the behavior of consumers amid the sharp rise in prices in the wholesale market, which on many days exceeds 200 euros MWh, which directly hits domestic under the regulated price (the so-called PVPC), Naturgy has increased its client portfolio in the free market 4% between August and the end of November. The company has launched two tariffs, called Compromiso, at 60 and 65 euros / MWh for two years.

Despite everything, Naturgy, the third in the sector at a certain distance from the first two, has also suffered a net loss of customers of 4% since 2018, to almost 165,000 supplies. In addition, the energy company lost, according to the CNMC, between 2018 and 2020 almost three points of free market share: from 13.1% to 10.3%.

Independent companies, such as Repsol or Holaluz, benefit from the portfolio lost by large companies

In the case of Endesa, the transfer at the end of the third quarter “has not been significant”, according to a spokesperson, who adds that “we will have to wait for the accumulated at the end of December” to see the effect.

According to data from the latest annual report on retail trade from the CNMC, that of 2020, the four main groups in the sector (including EDP) supplied 78.6% of the free market, compared to 86.5% three years earlier. A share won by independent companies, which have gone from 13.5% to 21.4% (from 2.4 million to 4 million clients). Data that may have varied in a year as relevant as this, the second of the pandemic and with historical price records in the pool since last August.

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Although the regulated PVPC market (which, on the contrary, enjoyed minimum prices in 2020 due to the sharp decline in demand for landfills) had been shrinking in favor of the free market thanks to the campaigns of independent electricity companies, some data collected by the Regulatory body point out that in recent months there has been a transfer to the regulated one, since this is the one that gives the right to vulnerable consumers to receive the social bonus, a cut in the bill that the Government has increased up to 70% in certain cases.

According to the latest CNMC change of supplier report, in 2020, the predominant movements have corresponded to transfers to the free market from the regulated market (15.6%). In the opposite direction, it was 13.6%.

Despite the losses of the large companies, given the magnitude of the electricity market, with almost 30 million of supply points, the former Unesa companies continued to control at the end of 2020 the aforementioned 78.6%: Iberdrola had a 35% share; Endesa, 28.4%, Naturgy, 10.3% and EDP Spain, 5%. This company sold its client portfolio, just over 900,000 in light, to the French TotalEnergy a year ago now.

A market in which it is difficult to compete

Free. The free market traders, both those of the traditional and independent groups, are taking advantage of the escalation in the prices of the pool to which the PVPC is referenced (10.9 million supply points or 37% of the total at the end of 2020 ) to try to fish in that area. However, the free marketers do not have too much margin to make offers, since the prices are also high for them.

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Repsol. After the large companies, which continue to dominate the market, despite having lost more than a million customers in three years, Repsol is listed. Its position as the first independent is given by the portfolio of clients it acquired from Viesgo, the smallest of the integrated electricity companies. According to data from the CNMC, Repsol’s electricity and gas subsidiary had a 3.6% market share at the end of 2020 and almost 675,000 customers.

Share. Among the rest of the independents, Cide, Fenie, Audax, Holaluz, Aldro, Flip, Som Energía, Factor Energía stood out. However, independent companies (more than 200) barely exceed a combined share of 21% of the market.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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