Electricity market opening for households - lessons to learn

1. Market opening for households –
lessons to learn
Rolands Irklis
Commissioner
Public Utilities Commission
14.03.2014.

2. Is it the best time for market opening?
Opinions and
myths?
No existing retail
competition for
Latvenergo in
household sector
Or facts?
Latvenergo is the only
electricity provider and
market player in Latvia
Lack of
interconectors with
Scandinavian market
areas are threat to
competition

3. Competition in household sector
Opinion
On the 3rd of March,
2014 there were 4
retail competitors with
offers for households
Fact
No existing retail
competition for
Latvenergo in
household sector

4. NordPoolSpot
Lack of
interconectors with
Scandinavian market
areas are threat to
competition
Opinion
Price differences in
between Nord Pool
Spot areas are
nothing unusual
Fact

5. Market participants in free electricity market
Latvenergo is the only
electricity provider and
market player in Latvia
Opinion
Latvenergo retail
market share has
decreased to 81%
Fact
Data source: Competition Council report on electricity trade in free market
Market participant Market share on
year 2012 4th
quarter
SIA "Baltic Energy Pool" <1%
SIA "BCG Riga" <1%
SIA "Enefit" <30%
SIA "Enerģijas avots" <10%
SIA "Inter Rao Latvia" <1%
AS "Latvenergo" >70%
75% of all electricity consumed is beeing traded in free
market. The rest 25% is regulated market with
households.

6. Legal and household sector
What is the difference
between legal and
household sector?

7. Legal and household sector
Legal entities Household entities
Consumers with large volumes Consumers with low volumes
Small investment in client
management
Large investments in client
management
Higher demand elasticity, smart
meters – ability to diversify products
Low demand elasticity, lack of smart
meters – the products are simple,
generally flat, fixed prices

8. Latvian household markets specialities
Obligation to include discount in the bill for
low income households (not approved yet).
Single bill (electricity price + distribution
tariff + component for subsidized energy).
Additional obligations regarding
customer service.
Retailer centred
model

9. Where should be balance between
consumer`s convenience and retailers
convenience?

10. Any questions?
Sabiedrisko pakalpojumu regulēšanas komisija, Ūnijas iela 45, Rīga, LV-1039
Tālr. 67097277, e-pasts: sprk@sprk.gov.lv, mājas lapa: www.sprk.gov.lv
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