The report analyses the functioning of the retail electricity markets in the five Nordic countries and Åland by looking at regulatory frameworks, competition, and customer satisfaction. The aim has been to find commonalities and to allow countries to learn from each other. It also analyses the reactions of market participants to the price shock caused by the Ukraine war to see what can be learned from the crisis to improve retail markets.
The analysis shows a clear need to help retailers compete fairly. It also highlights the importance of giving customers the support they need to make informed choices.
To meet these needs, the report recommends the following reforms:
- Enforcement of Regulations and Sanctioning: Strengthening enforcement of existing regulations and imposing adequate sanctions on retailers to encourage them to operate within legal boundaries and to discourage unfair practices. National regulatory authorities or industry associations could assist their retailers by providing them with clear interpretations of the regulations and model contracts so that there are fewer grey areas.
- Enhancing Information Given to Customers: Stricter requirements for suppliers to inform customers about contract features and clearer electricity bills to aid consumer understanding. The information could also be in the form of a public list of retailers receiving a lot of justified customer complaints.
- Further Development of Price Comparison Tools: Continual improvement and maintenance of price comparison tools to ensure reliability and prevent deceptive offers. For example, to appear at the top of the list, the minimum period of validity of a good contract could be one year before different conditions apply.
- Improved Customer Protection for SMEs: Exploring options to enhance customer rights for SMEs to address information asymmetry issues they face, possibly through rights to withdraw from a contract like those for consumers.
- Introduction of Customer Awareness Campaigns: Promoting energy conservation through effective campaigns targeting both households and SMEs, which have shown success in Denmark, Finland, and Sweden.