Electricity & gas

Authority criticizes too little competition in energy

Many people have no overview of their energy costs and rarely change supplier.

(Bild: Alexander Schwarzl (Symbolbild))

Although electricity and gas prices are currently falling again, this does not change the lack of competition. The competition authority and E-Control are criticizing "monopolistic orders of magnitude" and too little transparency. The next area to be scrutinized is district heating.

Electricity and gas prices are high, yet most households do not change their tariff. "One in two has never changed supplier," says E-Control board member Wolfgang Urbantschitsch. Individual suppliers therefore have dominant market positions, and Natalie Harsdorf-Borsch, head of the Federal Competition Authority, even speaks of "monopoly-like proportions" on the gas market. She and Urbantschitsch see customer inertia when it comes to switching. "There is competition, but nobody goes there," says Harsdorf-Borsch. 

Electricity price brake not good for competition
The electricity price brake is also counterproductive for competition. This is because if a price is above 10 cents per kilowatt hour, the amount above this is usually covered by the state. Consumers have little incentive to switch. This is why the state suppliers in particular benefit. Small suppliers, on the other hand, find it difficult to gain a foothold in the market with attractive offers.

"There is competition, but nobody goes there."

Natalie Harsdorf-Borsch, Bundeswettbewerbsbehörde

Bild: Lukas Ilgner/VGN Medien Holding / picturedesk.com

One problem is that many customers do not even have an overview of how much they are paying. 84 percent of gas customers do not know how high their gas price is, 68 percent do not know their tariff for kilowatt hours of electricity. Urbantschitsch calls for more transparency and criticizes inconsistent index adjustment clauses. Customers need to know their costs in order to be able to make a decision. 

High dominance of suppliers in the countries
Harsdorf-Borsch illustrates the dominance of individual providers using several examples in the gas sector: in Vienna, for example, alternative gas providers only account for around a quarter. In the second largest network in Lower Austria, EVN has a market share of 70 percent, and this is even higher for electricity. The situation is very clear in the west of Austria, where the regional suppliers achieve market shares of over 90 percent, with a peak value of 97 percent in Vorarlberg.

BWB also wants to take a close look at the district heating market
However, BWB also sees reason to examine the district heating sector and is now launching an industry survey. Around 30 percent of Austrians are supplied in this way, and the authority wants to take a closer look at district heating operators in urban centers in particular.

These have a natural monopoly there, but are not subject to E-Control's control. Prices have been subject to major upward fluctuations in recent years.