Commission for Regulation of Utilities Electricity and Gas ... · The final section of the report...

Information Paper

Reference: CRU18210 Date Published: 26/09/2018

An Coimisiún um Rialáil Fóntas

Commission for Regulation of Utilities

Electricity and Gas Retail

Markets Report Q1 2018

An Coimisiún um Rialáil Fóntas Commission for Regulation of Utilities

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Public/ Customer Impact Statement The purpose of this report is to provide industry, consumers and interested stakeholders with

relevant information1 on the development of competition in the electricity and gas retail markets

in the first quarter of 2018.

Retail market monitoring forms an important part of CRU’s activities. The information collected

through retail market monitoring helps to inform new policy and in the assessment of existing

regulations.

This report is part of a suite of reports including monthly switching reports, quarterly reports,

annual reports and emerging reports based on new market monitoring data which CRU began

publishing in 2016. The information on the retail markets as provided in this report gives an insight

into how the retail market is functioning and can highlight any specific issues that need to be

addressed.

This report details changes in market shares in the electricity and gas retail markets up to the end

of Q1 2018 and presents information about customer switching, renegotiations, prices and levels

of discounts available. The report also provides up to date information on trends in disconnections,

PAYG installs and debt flagging.

For any queries on this report please contact [email protected].

Revisions

Version Published Update

1 26/09/2018 Report published

1 The primary sources of data in this report are: Electricity: MRSO (Meter Registration System Operator), ESBN (ESB Networks) and Gas: GPRO (Gas Point Registration Operator), GNI (Gas Networks Ireland). Information for a number of market monitoring indicators is also provided by suppliers.

mailto:[email protected]


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Table of Contents

PUBLIC/ CUSTOMER IMPACT STATEMENT ................................................................................... 2

TABLE OF CONTENTS ................................................................................................................... 3

GLOSSARY OF TERMS AND ABBREVIATIONS ................................................................................ 6

EXECUTIVE SUMMARY ........................................................................................................... 8

KEY MESSAGES ...................................................................................................................................... 9

1. INTRODUCTION .......................................................................................................... 13

1.1 BACKGROUND................................................................................................................................ 13

1.1.1 CRU’S ROLE IN RETAIL MARKET MONITORING ...................................................................... 13

1.1.2 RELATED DOCUMENTS ....................................................................................................... 13

2. ELECTRICITY AND GAS RETAIL PRICES .................................................................................... 15

2.1 WHOLESALE ENERGY PRICES ............................................................................................................ 17

2.2 DOMESTIC ELECTRICITY PRICES ......................................................................................................... 18

2.3 DOMESTIC GAS PRICES .................................................................................................................... 19

2.4 DOMESTIC DUAL FUEL PRICES .......................................................................................................... 20

2.5 CHANGES IN STANDING CHARGES AND UNIT CHARGES OVER TIME ......................................................... 21

2.6 NUMBER OF CUSTOMERS ON DIFFERENT PLANS – ELECTRICITY .............................................................. 22

2.7 NUMBER OF CUSTOMERS ON DIFFERENT PLANS- GAS .......................................................................... 24

2.8 NUMBER OF CUSTOMERS DEFAULTING TO STANDARD TARIFFS .............................................................. 24

2.9 FEATURES OF PLANS ....................................................................................................................... 26

2.10 COMPONENTS OF PRICES ............................................................................................................... 27

2.11 SUMMARY – ELECTRICITY AND GAS RETAIL PRICES ............................................................................. 29

3. MARKET SHARE – DOMESTIC ELECTRICITY ............................................................................. 31

3.1 DOMESTIC ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS ....................................... 31

3.2 SUMMARY – MARKET SHARE – DOMESTIC ELECTRICITY ........................................................................ 32

4. MARKET SHARE – DOMESTIC GAS ......................................................................................... 33

4.1 DOMESTIC GAS MARKET SHARE BY CUSTOMER NUMBERS AND GWHS ................................................... 33

4.2 SUMMARY – MARKET SHARE – DOMESTIC GAS .................................................................................. 34

5. CUSTOMER SWITCHING AND RENEGOTIATIONS .................................................................... 35

5.1 ELECTRICITY, GAS AND DUAL FUEL SWITCHING IN Q1 2018 .................................................................. 35


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5.2 RENEGOTIATIONS ........................................................................................................................... 38

5.3 SUMMARY – CUSTOMER SWITCHING AND RENEGOTIATIONS ................................................................. 40

6. FINANCIAL HARDSHIP PAYG .................................................................................................. 42

6.1 SUMMARY – FINANCIAL HARDSHIP PAYG .......................................................................................... 45

7. DEBT FLAGGING .................................................................................................................... 46

7.1 SUMMARY – DEBT FLAGGING ........................................................................................................... 47

8. DISCONNECTIONS ................................................................................................................. 48

8.1 DISCONNECTIONS – TOTAL .............................................................................................................. 48

8.2 DISCONNECTIONS - ELECTRICITY MARKET ........................................................................................... 49

8.3 DISCONNECTIONS - GAS MARKET ...................................................................................................... 51

8.4 SUMMARY – DISCONNECTIONS ......................................................................................................... 52

9. ARREARS AND PAYMENT PLANS............................................................................................ 53

9.1 SUMMARY – ARREARS AND PAYMENT PLANS ...................................................................................... 55

10. BUSINESS ELECTRICITY AND GAS COST COMPONENTS ......................................................... 57

10.1 ELECTRICITY ................................................................................................................................. 60

10.2 GAS ........................................................................................................................................... 61

11. BUSINESS ELECTRICITY AND GAS PLANS AND PRICES ............................................................ 62

11.1 SMALL BUSINESS ELECTRICITY PRICES .............................................................................................. 62

11.2 IC GAS PRICES ............................................................................................................................. 63

11.3 EUROSTAT NON-DOMESTIC ELECTRICITY AND GAS PRICES .................................................................. 64

11.4 SUMMARY .................................................................................................................................. 67

12. BUSINESS ELECTRICITY MARKET SHARE ............................................................................... 68

12.1 SMALL BUSINESS ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS ............................. 68

12.2 MEDIUM BUSINESS ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS ......................... 70

12.3 LARGE ENERGY USERS ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS ...................... 72

13. BUSINESS GAS MARKET SHARE ............................................................................................ 74

13.1 INDUSTRIAL AND COMMERCIAL GAS MARKET SHARE BY CUSTOMER NUMBERS AND GWHS ..................... 75

13.2 MEDIUM SIZED NON-DOMESTIC MARKET SHARE BY CUSTOMER NUMBERS AND GWHS .......................... 77

13.3 DM MARKET SHARE BY CUSTOMER NUMBERS AND GWHS ................................................................ 79

13.4 LDM MARKET SHARE BY CUSTOMER NUMBERS AND GWHS ............................................................... 81

14. MARKET CONCENTRATION .................................................................................................. 83

14.1 ELECTRICITY MARKET SEGMENTS .................................................................................................... 83


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14.2 GAS MARKET SEGMENTS ............................................................................................................... 87

15. NON-DOMESTIC DISCONNECTIONS .............................................................................. 91

16. CONCLUSION ................................................................................................................... 93

ANNEX 1 OVERVIEW OF ELECTRICITY PASS THROUGH COSTS AND CHARGES FOR

2017/18 ................................................................................................................................. 94

1 ELECTRICITY MARKET SEGMENTS ......................................................................................................... 94

2 CONSUMPTION ................................................................................................................................. 94

3 OVERVIEW OF CHARGES...................................................................................................................... 95

4 GENERATION CHARGES ...................................................................................................................... 97

5 NETWORK CHARGES .......................................................................................................................... 98

6 PUBLIC SERVICE OBLIGATION LEVY (PSO) ............................................................................................. 99

7 ELECTRICITY TAX ............................................................................................................................. 100

ANNEX 2 OVERVIEW OF GAS PASS THROUGH CHARGES AND COSTS FOR 2017/18 .... 101

1 GAS MARKET SEGMENTS .................................................................................................................. 101

2 CONSUMPTION ............................................................................................................................... 101

3 NETWORK CHARGES ........................................................................................................................ 102

4 CARBON TAX................................................................................................................................... 104

ANNEX 3 CHARGES IN THE BUSINESS MARKETS DEVELOPMENTS SECTION ................. 105

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Glossary of Terms and Abbreviations

Abbreviation or Term Definition or Meaning

AQ Annual Quantity

BGE Bord Gáis Energy

CfD Contract for Difference

CoS Change of Supplier

CRU Commission for Regulation of Utilities

CTSR Street Isolation

DLAF Distribution Loss Adjustment Factor

DM Daily Metered

DMs Disconnect Meters

DUoS Distribution Use of System

ESBN ESB Networks

FVT Fuel-Variation Tariff

GNI Gas Networks Ireland

GPRN Gas Point Reference Number

GWhs Gigawatt Hours

HHI Herfindahl-Hirschman Index

IC Industrial/Commercial

I-SEM Integrated Single Electricity Market

kWhs Kilowatt Hours

LDM Large Daily Metered

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LEU Large Energy Users

MPRN Meter Point Reference Number

MWhs Megawatt Hours

NBP National Balancing Point

NDM Non-Daily Metered

NIAUR Northern Ireland Authority for Utility Regulation

NPA Non-Payment of Account

PAYG Pay As You Go

PSO Public Service Obligation

RTF Regulated Tariff Formula

SEAI Sustainable Energy Authority of Ireland

SEM Single Electricity Market

SEMO Single Energy Market Operator

SMP System Marginal Price

SPC Supply Point Capacity

TUoS Transmission Use of System

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Executive Summary Retail market monitoring forms an important part of the CRU’s activities. The information gleaned

through market monitoring helps to inform new policy and aids in the assessment of existing

regulations. The information and analysis provided in this report aims to provide insight into how

the electricity and gas retail markets are functioning and to highlight any specific issues that may

need to be addressed.

The purpose of this quarterly report is to provide consumers, industry and other interested

stakeholders with relevant information on the key developments in the electricity and gas retail

markets in Q1 2018. The report draws on a range of data sources from the past quarter and

provides an overview of the electricity and gas retail markets.

The report begins with an overview of electricity and gas retail prices, including the components

of customers’ bills and final retail prices.

The next section of the report presents domestic market developments with regard to the status

of suppliers’ shares in the domestic market segments, and customer engagement in terms of

switching.

The next part of the report focuses on consumer protection through an analysis of Pay As You Go

(PAYG) meters, effective debt flagging2 processes, disconnections, and arrears and payment

plans.

The final section of the report presents business market developments during Q1 2018 in terms

of business electricity and gas cost components, plans and prices, the status of suppliers’ market

share in the business segments, metrics of market concentration, and non-domestic

disconnections.

The key messages from the Q1 2018 Report are outlined in the next section.

2 When a customer requests to change to a new supplier, the existing supplier has the facility to inform the new supplier of outstanding debt if it is above the industry thresholds approved by the CRU. The new supplier can then choose whether to proceed with or cancel the change of supplier (CoS) request where this ‘flag’ has been raised.

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Key Messages

Electricity and Gas Prices

▪ A total of 7 suppliers announced price increases in the first half of 2018, based on

increased wholesale costs and regulated charges. Supplier’s increases and

effective dates for tariff changes are outlined in this report.

▪ The All island wholesale electricity price (System Marginal Price, SMP) from 2012

to June 2018 is presented in this report. The average SMP price from January to

June for 2018 was 23% higher than the average price for 2017 and 40% higher than

the average price for 2016.

▪ The wholesale gas price at the UK trading hub, which sets the wholesale gas price

in Ireland, also increased in 2017 and 2018. The average price of gas between

January and June 2018 was 25% higher than for 2017, and 51% higher than 2016.

▪ In March 2018, the least expensive estimated annual bill (EAB) in electricity (based

on typical consumption of 4,200kWhs) for a standard plan was with BE Energy at

€964.59. The least expensive discounted plan was with Bord Gáis Energy with an

estimated annual bill of €810.93.

▪ The least expensive estimated annual bill in gas (based on typical annual

consumption of 11,000kWhs) for a standard plan was with Just Energy at €734.17.

The least expensive discounted plan was with Flogas with an estimated annual bill

of €627.93.

▪ In 2018 Electric Ireland, Energia, Bord Gáis Energy, Just Energy, Panda Power and

SSE Airtricity offered dual fuel plans to customers with price discounts for domestic

customers that avail of both services from the same supplier. The least expensive

dual fuel offer was with Bord Gáis Energy with an estimated annual bill of €1,400.

Market Share – Domestic Electricity

▪ End of Q1 2018, Electric Ireland had the largest domestic electricity market share,

with 49.75% of the market in terms of consumption. This was followed by Bord Gáis

Energy with 17.43%, SSE Airtricity with 14.89%, Energia with 8.54%, PrePayPower

with 5.82%, Panda with 1.57% and Pinergy with 1.53%.

▪ 2017 was the first year that Electric Ireland’s share fell below 50%, and it stayed

below this level in Q1 2018.

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Market Share – Domestic Gas

▪ End of Q1 2018, Bord Gáis Energy had the largest market share in terms of

customer numbers, with 46.41% of the domestic gas market, followed by Electric

Ireland with 21.12%, SSE Airtricity with 14.01%, Energia with 7.59%, Flogas with

5.23%, and PrePayPower with 5.05%.

▪ 2017 was the first year that Bord Gáis Energy’s share fell below 50%, and it stayed

below this level in Q1 2018.

▪ Between Q1 2017 and Q1 2018 Bord Gáis Energy lost 3.72% of market share in

terms of customer numbers. Energia increased its market share by 1.72%.

Switching and Renegotiations

▪ The total number of customers switching in electricity was 79,866 in Q1 2018. This

represented a decrease in switching of 3.12% from Q4 2017, where there were

82,435 switches.

▪ The total number of customers switching in gas was 35,332 in Q1 2018. This

represented an increase in switching of 12.16% from Q4 2017, during which time

there were 31,502 customer switches.

▪ In Q1 2018 dual fuel switches represented 28% of total switches.

▪ The total number of internal switches/renegotiations in electricity in Q1 2018 was

43,975. This is an increase of 22% on the Q4 2017 figure of 36,066. The total

number of internal switches/renegotiations in gas in Q1 2018 was 11,306,

compared to 12,700 in Q4 2017 (11% decrease from Q4 2017).

▪ Between Q1 2017 and Q1 2018, Electric Ireland’s market share decreased by

1.41% in terms of consumption. Energia increased its market share by 2.05%, the

largest increase during the period.

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Financial Hardship PAYG and Debt Flagging

▪ The total number of electricity PAYG financial hardship installs in Q1 2018 was 431

compared to 847 in Q1 2017 and 1,028 in Q4 2017.

▪ The total number of gas PAYG installs in Q1 2018 was 1,601. 15.59% of these were

for financial hardship reasons. In the same period in 2017, 1,644 were installed,

with 32.97% for financial hardship reasons. This indicates that the installs were

being driven by lifestyle choice customers.

▪ There were 491 debt flags raised in the electricity market in Q1 2018, corresponding

to approximately 0.61% of all electricity Change of Supplier (CoS) requests in the

quarter. This represents a 4% increase from Q4 2017.

▪ 156 debt flagged CoS requests were cancelled in the electricity market in Q1 2018,

which means that 32% of debt flags resulted in a CoS request being cancelled.

▪ There were 321 debt flags raised in the gas market in Q1 2018, corresponding to

approximately 0.9% of all gas CoS requests in that quarter. This represents a 5.2%

increase from Q4 2017.

▪ 125 debt flagged CoS requests were cancelled in the gas market in Q1 2018, which

means that 39% of debt flags resulted in a CoS request being cancelled.

Domestic Electricity and Gas Disconnections

▪ The total number of disconnections in Q1 2018 was 1,229 for electricity and 300 for

gas.

▪ Between Q1 2017 and Q1 2018, the total number of electricity disconnections have

declined by 1% and the total number of gas disconnections have declined by 46%.

Arrears and Payment Plans

▪ Between 9% and 23% of customers across all customer segments were in arrears

in Q1 2018.

▪ Of those customers in arrears, 28% (electricity) and 34% (gas) were in arrears for

excess of 90 days.

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▪ The percentage of total customers per market segment on payment plans is 1.35%

for electricity and 0.68% for gas indicating that 27,896 electricity customers and

4,543 gas customers are on payment plans.

▪ In general, more payment plans are completed by electricity and gas customers

than broken.

Market Share – Non-Domestic Electricity and Gas

▪ End of Q1 2018, Electric Ireland had the largest share of the small business

electricity market in terms of consumption with 34.30%. Electric Ireland also held

the largest share of the market in terms of consumption in the medium business

electricity market with 38.92%, while SSE Airtricity held the largest share in the large

energy users market with 41.60%.

▪ End of Q1 2018, Bord Gáis Energy had the largest market share in the IC gas

market, with 44.46% in terms of customer numbers. Bord Gáis Energy also held the

largest market share in all other non-domestic gas market segments - 36.49% in

the medium sized non-domestic market, 28.88% in the DM market and 53.85% in

the LDM market.

Non-Domestic Electricity and Gas Disconnections

▪ The total number of non-domestic disconnections in Q1 2018 was 283 for electricity

and 41 for gas.

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1. Introduction

1.1 Background

1.1.1 CRU’s Role in Retail Market Monitoring

The Commission for Regulation of Utilities (CRU) is Ireland’s independent energy and water

regulator. CRU was established in 1999 and now has a wide range of economic, customer

protection and safety responsibilities in energy. CRU is also the regulator of Ireland’s public water

and wastewater system.

CRU’s primary economic responsibilities in energy cover electricity generation, electricity and gas

networks, and electricity and gas supply activities. The overall aim of CRU’s economic role is to

protect the interests of energy customers. CRU has an important related function in customer

protection by resolving complaints that customers have with energy companies.

CRU’s core focus in safety is to protect lives and property across a range of areas in the energy

sector. In 2014 CRU was appointed as Ireland's economic regulator of the Irish public water and

wastewater sector.

CRU has an important statutory role to protect energy consumers and to monitor the electricity

and gas retail markets to ensure that customers are benefitting from competition. A key strategic

goal of CRU is to protect consumers so they can benefit from competition through fully competitive

wholesale and retail markets. Retail market monitoring forms an important part of CRU’s activities,

in terms of providing oversight of the market, informing new policy and assessing existing

regulations.

Electricity and gas retail market reports are published by CRU on a quarterly basis and provide

information on trends in prices, switching, market share, and customer protection. The aim of

these reports is to provide an overview of competition in the electricity and gas retail markets and

provide consumers, industry and relevant stakeholders with information over time.

1.1.2 Related Documents

Further information on CRU’s role and relevant legislation can be found on CRU’s website at

www.cru.ie

http://www.cru.ie/

ELECTRICITY AND GAS RETAIL PRICES

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ELECTRICITY

AND GAS

RETAIL PRICES


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2. Electricity and Gas Retail Prices

This section outlines the range of plans offered by suppliers from January 2018 to March 2018 for

domestic electricity, gas and dual fuel customers, including their standard and highest discounted

plans. All information presented here is publicly available on price comparison and individual

supplier websites.

There are a large number of plans available to domestic and business customers. These plans

offer customers different tariffs comprised of standing and unit charges (and in some instances

other charges).

Suppliers can also offer different rates depending on the payment or billing methods of customers

(e.g. paperless, online, direct debit etc.). All suppliers are required to publish details of tariff plans

that are available to domestic customers. Suppliers of commercial customers often provide

bespoke plans and information on such plans is generally not published by suppliers. Some

suppliers also offer standard plans to business customers.

The first part of this section provides comparisons between suppliers for their standard and

discounted plans in gas and electricity, and details price changes by suppliers in Q1 2018.

This is followed by analysis of new data received by the CRU from suppliers. Data on the top ten

electricity, gas and dual fuel plans per supplier in terms of customer numbers is provided to the

CRU on a quarterly basis. This includes information on the price components of each plan,

discounts, consumption and customer numbers and has been used for analysis of the number of

customers on different levels of discounts and standard plans.

It should be noted that this does not represent all customers in the market as suppliers may have

more than ten plans which are not reported under the new market monitoring framework.

Price comparison websites are useful tools for customers to compare prices across suppliers.

CRU has an accreditation framework which reviews the energy price comparison service provided

by websites and only accredits a site if it meets defined standards for accuracy, transparency and

reliability. There are two CRU accredited price comparison websites: www.bonkers.ie and

www.switcher.ie.

Between Q4 2017 and the first half of 2018, a number of price increases were announced across

different suppliers and in addition the 2017/18 PSO levy came into effect. There are a number of

drivers for these price increases, including increased wholesale electricity and gas prices in 2017

and 2018 and increases in pass through costs in electricity. Between the 2016/17 and 2017/18

tariff year, total regulated costs (including transmission and distribution charges and market

operator charges) have increased by approximately 3.33%. The dates of announcements and

their effective dates impacting on final prices are outlined below.


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Supplier Price Change Details Effective date

Pinergy ➢ A price increase for electricity of

5.6% was announced on the 1st of

November 2017.

➢ A price increase of 9.38% for

electricity was announced on the

12th of July 2018.

1st December 2017

1st August 2018

Flogas ➢ A price increase for gas of 3.3%

was announced on the 1st of

November 2017.

➢ A price increase of 12.8% for gas

was announced on the 12th of July

2018.

1st December 2017

1st August 2018

Energia ➢ A price increase for electricity of

3.9% was announced on the 27th

of October 2017.

➢ A price increase for electricity of

7.6% and for gas of 12.38% was

announced on the 29th of June

2018

1st December 2017

1st August 2018

Bord Gáis Energy ➢ A price increase of 3.4% for gas

and 5.9% for electricity was

announced on the 29th of

September 2017.

➢ A price increase of 4.7% for gas

and 5.8% for electricity was

announced on the 6th July 2018.

1st November 2017

6th August 2018

PrePayPower ➢ A price increase of 0.09 cent a day

(€2.83 a month) was announced

on the 31st of October 2017.

➢ A price increase of 6.6% for

electricity and 7.5% for gas was

announced on the 3rd of July 2018.

1st December 2017

3rd August 2018

SSE Airtricity ➢ A price increase of 5.6% for


29th of September 2017.

➢ A price increase of 12.3% on gas

tariffs and 6.4% on electricity tariffs

was announced on the 14th of

June.

1st November 2017

14th July 2018


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Electric Ireland ➢ A price increase of 4% for


6th of October 2017.

➢ A price increase of 6.2% in

electricity and 8% in gas was

announced on the 27th of June

2018.

1st February 2018

1st August 2018

2.1 Wholesale Energy Prices

The wholesale electricity market in Ireland is jointly regulated by the CRU and the Northern Ireland

Authority for Utility Regulation (NIAUR). This market is known as the Single Electricity Market or

SEM. The SEM includes a centralised liquid spot market where electricity is bought and sold.

Suppliers purchase their requirements in half hour periods and pay the System Marginal Price

(SMP) in each half hour.

Between January and June 2018, the average SMP price for 2018 was 23% higher than the

average price for 2017 and 40% higher than the average price for 2016. For electricity the average

SMP is €58.33 per MWh in 2018 (between January and June). For 2017 overall, the average was

€47.46 per MWh, whereas in 2016 it was €41.80 per MWh.

The figure below shows the average monthly price of electricity in the SEM between 2014 and

2018, along with the average price across each year.

Figure 2.1: SMP €/MWh (Jan 2012 – May 2018)

The National Balancing Point (NBP) is the trading hub for gas in Britain and sets the Irish

wholesale gas price. The price of gas on the NBP in pence per therm of gas increased towards


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the end of 2017 and in the first part of 2018. As of June 2018, the average price of gas for 2018

was 25% higher than for 2017, and 51% higher than 2016.

The figure below shows the change in average monthly day ahead gas prices over time at the

NBP. It also shows the average price between 2014 and 2018.

Figure 2.2: NBP Day Ahead Gas (€/therm) (Jan 2012 – May 2018)

The year to date (January to June 2018) average for NBP gas (Day-ahead) is 64 cent/therm in

2018. For 2017, the average NBP price was 51 cent/therm. For 2016 the average was 42

cent/therm.

2.2 Domestic Electricity Prices

In order for a domestic electricity customer to accurately compare prices between suppliers, the

comparison of the estimated annual bill using the current typical consumption value of 4,200kWhs

across suppliers, is the best measure.

In Q1 2018 there were seven suppliers offering both standard and discounted plans for domestic

electricity, along with PrePayPower and Pinergy who offered PAYG plans exclusively. BEenergy

entered the domestic electricity market in Q2 2017 offering 24 hour and night saver tariffs. Note

that the estimated annual bill for Lifestyle Choice PAYG customers includes an additional supplier

service charge which is reflected in the price.

BEenergy offered the cheapest standard domestic estimated annual bill at the end of Q1 2018.

BEenergy is a new supplier having entered the market in 2017. This highlights the benefits of new

entrants into the market for customer prices. The most competitive discounted estimated annual

bill at the end of Q1 2018 was offered by Bord Gáis Energy.


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Standard Domestic Electricity Estimated Annual Bills (based on typical annual consumption of 4,200 kWhs)

December 2017 March 2018

Electric Ireland €971.56 €1,006.48

Energia €1,093.09 €1,093.09

Bord Gáis Energy €1,027.36 €1,027.36

SSE Airtricity €1,052.45 €1,052.52

Panda power €1,055.22 €1,071.81

Just Energy €960.99 €1,020.86

BEenergy €964.59 €964.59

PAYG Plans

PrePayPower €1,149.43 €1,149.43

Pinergy €1,149.27 €1,146.48

Electric Ireland €1,077.41 €1,112.33

Table 2.1: Standard Domestic Electricity Annual Average Bills

Most Competitive Discounted Domestic Electricity Estimated Annual Bills (based on typical annual consumption of 4,200 kWhs)


Electric Ireland €931.89 €965.01

Energia €819.10 €819.10

Bord Gáis Energy €810.93 €810.93

SSE Airtricity €871.41 €871.37

Panda power €912.21 €909.86

Just Energy €904.91 €888.63

BEenergy €964.59 €964.59

PAYG Plans

PrePayPower - €1,149.43

Pinergy €1,149.27 €1,146.48


Table 2.2: Most Competitive Discounted Domestic Electricity Estimated Annual Bills

2.3 Domestic Gas Prices

In order for a domestic gas customer to accurately compare prices between suppliers, the

comparison of the estimated annual bill using the current typical consumption value of

11,000kWhs across suppliers, is the best measure.

In Q1 2018 there were seven suppliers offering both standard and discounted plans for domestic

gas, Flogas and BGE also offered PAYG plans. Note that some gas suppliers charge an

installation fee for PAYG gas meters which is not included here.

Just Energy offered the cheapest standard domestic estimated annual bill at the end of Q1 2018.

Just Energy is a new supplier having entered the market in 2017. As in the case of electricity, this

highlights the benefits of new entrants into the market for customer prices. The most competitive

discounted estimated annual bill at the end of Q1 2018 was offered by Flogas.


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Standard Domestic Gas Estimated Annual Bills (based on typical annual consumption of 11,000 kWhs)



Energia €783.66 €783.66


Flogas €769.40 €769.40

Just Energy €675.35 €734.17


Panda Power - €778.37

PAYG Plans

Flogas €769.20 €769.20


PrePayPower €810.84 €810.84

Table 2.3: Standard Domestic Gas Estimated Annual Bills

Most Competitive Discounted Domestic Gas Estimated Annual Bills (based on typical annual consumption of 11,000 kWhs)

Gas December 2017 March 2018


Energia €686.68 €686.68


Flogas €627.93 €627.93

Just Energy €628.87 €628.87


Panda Power - €682.61

Table 2.4: Most Competitive Discounted Domestic Gas Estimated Annual Bills

2.4 Domestic Dual Fuel Prices

In Q1 2018 Electric Ireland, Energia, Bord Gáis Energy, Just Energy, Panda Power and SSE

Airtricity offered dual fuel plans to customers with price discounts for domestic customers that

avail of both services from the same supplier.

Bord Gáis Energy offered the cheapest dual fuel estimated annual bill at the end of Q1 2018. Two

new suppliers entered the duel fuel market in 2017, improving customer choice in this segment.

Highest Discounted Dual Fuel Estimated Annual Bills



Energia €1,455.11 €1,455.11

Bord Gáis Energy €1,539.00 €1,400.00

SSE Airtricity €1,477.58 €1,477.54

Just Energy €1,513.78 €1,507.76

PrePayPower €1,960.27 €1,960.27

Panda Power - €1,444.97

Table 2.5: Highest Discounted Dual Fuel Estimated Annual Bills


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2.5 Changes in Standing Charges and Unit Charges over

Time

Final electricity and gas bills are made up of a number of components; standing charges and unit

rates are charged and some suppliers may also levy other charges such as those associated with

pre-payment meters.

Standing charges for electricity and gas plans have not changed significantly over time. For

electricity, they have fluctuated between an average of approximately 34c per day and 37c per

day3 depending on the supplier. These charges should be seen in tandem with any other recurring

fixed charge that a supplier may charge customers.

Figure 2.3: Electricity standard unit rate over time

Figure 2.4: Electricity discount unit rate over time

3 This average excludes the standing charges associated with PAYG plans as additional service charges are also included.


22

Competition and discounts are usually associated with the unit charge for supplier’s plans. Figures

2.3 - 2.6 show the changes in electricity and gas standard and discount unit rates over time per

supplier and do not take into account standing charges or any other charges that a supplier may

charge customers. Overall for standard and discounted plans in both markets, unit rates have

increased from the end of 2017 and in the first part of 2018.

Figure 2.5: Gas standard unit rate over time

Figure 2.6: Gas discount unit rate over time

2.6 Number of Customers on Different Plans – Electricity

Under CRU’s extended market monitoring framework, data on the top ten contracts for each

supplier in terms of customer numbers is submitted to the CRU on a quarterly basis.


23

This includes data on the number of customers on each plan, the unit charge and standing charge,

total consumption for the period, the features of each plan and the annual average bill. This

analysis does not include all customers in the market but provides a good indication of the level

of up-take of discounted plans in the market.

Electricity Gas

Number of customers reported on top 10 plans for Q1 2018

1,186,923 523,478

Total number of customers in the market 2,061,214 663,332

% of total customers 58% 79%

Table 2.6: Customers on top 10 plans, Q1 2018

This section presents some analysis carried out with data for Q1 2018, looking at the proportion

of customers on different ranges of plans based on their combined unit and standing charges

compiled from information collected from suppliers on their top 10 plans. The annual average bills

presented here are based on 4,200kWh of consumption.

Figure 2.7: Customers on ranges of electricity bills, Q1 2018

Figure 2.7 shows the number of customers on a range of plans with different annual bills for Q1

2018 (as reported through market monitoring). This data indicates that the majority of customers

in the market, covered by the top 10 plans, are on plans within the higher range of annual average

bills.


24

This information is based on data received for Q1 2018 from suppliers detailing their top 10

electricity plans, based on the number of customers on each plan. This means that not every

customer in the market is detailed here and the data is only representative of the market as a

whole.

Analysis suggests that most customers are not on the highest discounted plan available, and in

many cases the discounted plans with the most customers have an annual average bill that is

only slightly below that of the standard tariff bill.

2.7 Number of Customers on Different Plans- Gas

Figure 2.8: Customers on ranges of gas bills, Q1 2018

Figure 2.8 shows the % of customers on different ranges of annual average bills in Q1 2018 (as

reported through market monitoring). This information is based on data received for this period

from suppliers detailing their top 10 gas plans, based on the number of customers on each plan.

2.8 Number of Customers Defaulting to Standard Tariffs

Data is received from suppliers on a yearly basis on the overall number of customers who

defaulted to standard tariffs. The indicator refers to the automatic default of a current customer at

the end of a contract to a tariff that does not have a new customer discount or a contract term

associated with it.


25

Figure 2.9: % of customers defaulting to standard tariffs in 2017

% of customers defaulting to standard tariffs in 2017

Domestic Electricity

Small Business Electricity

Domestic Gas

IC Gas

% of total customers 8.90% 5.23% 8.89% 3.72%

% customers who switched in the last 12 months

defaulting to standard tariff 65.23% 26.54% 49.31% 18.37%

Table 2.7: % of customers defaulting to standard tariffs in 2017

In 2017, approximately 65% of domestic electricity customers that had switched supplier in the

last 12 months defaulted to a standard tariff, when their initial discount period ended. This

amounted to 8.90% of all domestic electricity customers.

Approximately 9% of domestic gas customers defaulted to standard tariffs, at the end of a discount

period, amounting to 50% of domestic gas customers who switched supplier in the last 12 months.

This amounted to approximately 8.9% of all domestic gas customers

While this is a low percentage of customers overall, taken as a percentage of customers on fixed

term discounted plans this indicates that a large number of customers who were active in the

market did not renegotiate their contract or switch in 2017. This suggests low levels of repeat

switching in the market. Lower numbers of business electricity and gas customers defaulted to

standard tariffs, however a significant proportion of business customers negotiate bespoke

contracts with suppliers.


26

2.9 Features of Plans

In 2018 there was a large variety of payment methods available and different features across

different plans. Features included cash based and credit offers, green offers, loyalty schemes and

device based offers. These features are listed in the table below.

Energy based

services/Free items

▪ Climote heating control ▪ Nest learning thermostat ▪ GE Led Light Bulbs ▪ In Home Displays ▪ Boiler Services ▪ Green offers ▪ Hive Active

Cashback offers &

Points

▪ €50-€150 cashback ▪ 1000-4000 Tesco points ▪ €20-€50 free top ups ▪ Access to loyalty schemes ▪ €120 credit on first or second bill

Discounts ▪ 2%-20% Gas discounts ▪ 1%-26% Electricity discounts ▪ Duel fuel discount bundles

Payment Methods

▪ PAYG ▪ Direct Debit ▪ Bank Transfer ▪ Phone ▪ Cheque ▪ An Post

Unit Charges and

Standing Charges

▪ Standing charges do not vary widely ▪ Most discounts are off unit charges

Contract terms ▪ 12/24 month contract terms with exit fees ▪ Most customers default to standard tariffs

Table 2.8: Features of Plans available


27

2.10 Components of Prices4

Before electricity or gas is delivered to the final customer’s home it passes through a number of

stages. Therefore, the final retail price seen on a bill reflects the generation or extraction of energy,

the selling of that energy on wholesale markets, the cost of delivery to a household and the cost

to serve the customer.

The figures below illustrate the average contribution of each of the components to the average

electricity bill in Ireland, and how this compares with the EU average in 2017.

Eurostat Consumption Bands and Price Components

Eurostat publishes data on average end user prices for different domestic and

industrial/commercial electricity and gas markets. The most relevant band that is comparable

to average Irish domestic consumers is the DC band5. Eurostat breaks down the average

electricity prices for consumption bands according to three categories; energy and supply

charges, network charges, and taxes and levies.

In 2017, the percentage of the final charge that comes from the energy and supply element for

domestic electricity was higher in Ireland than the EU average. The networks component was

broadly similar, despite a lower population in Ireland. Finally, the taxes and levies element in

Ireland was lower than the EU average.

Figure 2.10: Price Components – Ireland vs EU6 (2017)

4 Analysis on the components of prices is normally covered in annual electricity and gas retail markets reports. However, information on this indicator was not included in the 2017 Electricity and Gas Retail Markets Annual Report as data for components of prices for 2017 was not available at the time. As a result, this information is included in the Q1 2018 report. 5 2,5000 -5,000 KWh of consumption. 6 Data was not available for all price components for Germany and Slovakia, therefore they are excluded from the EU average.

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Ireland

EU Average

Price Components Ireland vs EU

Energy & Supply Network Costs Taxes & Levies


28

The disaggregated price components for domestic electricity are shown below:

Figure 2.11: Disaggregated Domestic Electricity Price, Band DC (2017)

31%26%

40%47% 57%

36%

13%

34%

30%

36%

46%

41%

47%46%

30%34%

33%

79%

39% 32%

25%

39%34%

55%

20%

47%38%

31%37%

24%

36% 17%

32%

18%

38%36% 29%

18%38%

33%

18%

36%

36%

40%

16%

34%

34%

23%

34%

35%

24%

43%

25%

30%

38% 38% 36%

17%26%

31%

69%

28%34% 36% 36%

21% 21%

36% 34%30% 28%

5%

26%34%

52%

27%31%

21%

37%28% 32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%A

ust

ria

Bel

giu

m

Bu

lgar

ia

Cro

atia

Cyp

rus

Cze

ch R

epu

blic

Den

mar

k

Esto

nia

Fin

lan

d

Fran

ce

Gre

ece

Hu

nga

ry

Irel

and

Ital

y

Latv

ia

Lith

uan

ia

Luxe

mb

ou

rg

Mal

ta

Net

her

lan

ds

Po

lan

d

Po

rtu

gal

Ro

man

ia

Slo

ven

ia

Spai

n

Swed

en

Un

ite

d K

ingd

om

Ave

rage

c/kW

h

Energy & supply Network Costs Taxes & Levies


29

2.11 Summary – Electricity and Gas Retail Prices

▪ A total of 7 suppliers announced price increases in the first half of 2018, based on

increased wholesale costs and regulated charges. Supplier’s increases and effective dates

for tariff changes are outlined in this report.

▪ The All-Island wholesale electricity price (System Marginal Price, SMP) from 2012 to June

2018 is presented in this report. Between January and June 2018, the average SMP price

for 2018 was 23% higher than the average price for 2017 and 40% higher than the average

price for 2016.

▪ The wholesale gas price at the UK trading hub, which sets the wholesale gas price in

Ireland, also increased in 2017 and 2018. As of June 2018, the average price of gas for

2018 was 25% higher than for 2017, and 51% higher than 2016.

▪ In March 2018, the least expensive estimated annual bill in electricity (based on typical

consumption of 4,200kWhs) for a standard plan was with BE Energy at €964.59. The least

expensive discounted plan was with Bord Gáis Energy with an estimated annual bill of

€810.93.

▪ The least expensive estimated annual bill for a standard plan in gas (based on typical

annual consumption of 11,000kWhs) was with Just Energy at €734.17. The least

expensive discounted plan was with Flogas with an estimated annual bill of €627.93.

▪ In 2018 Electric Ireland, Energia, Bord Gáis Energy, Just Energy, Panda Power and SSE

Airtricity offered dual fuel plans to customers with price discounts for domestic customers

that avail of both services from the same supplier. The least expensive dual fuel offer was

with Bord Gáis Energy with an estimated annual bill of €1,400.

30

MARKET

DEVELOPMENTS

MARKET DEVELOPMENTS

31

3. Market Share – Domestic Electricity

3.1 Domestic Electricity Market Share by Customer Numbers and MWhs

This section outlines the market share of each supplier for Q1 2018 in terms of customer numbers

and consumption in MWhs. The percentage change in market share from the last quarter and

over the last year is also presented.

Figure 3.1: Q1 2018 Domestic Electricity Market Share (%)

Q1 2018 Domestic Market Share

Sites MWhs

Electric Ireland 1,117,091 1,261,351

SSE Airtricity 273,180 377,405

Bord Gáis Energy 331,836 441,814

PrePayPower 131,515 147,628

Energia 144,528 216,412

Pinergy 28,118 38,678

Panda 28,640 39,717

Others 6,306 12,365

Total 2,061,214 2,535,371

Table 3.1: Number of sites and MWhs per supplier

Domestic Market Share

(a) Customer Nos (b) MWhs

54.20

13.25

16.10

6.38

7.01

1.360.31

1.39

49.75

14.89

17.43

5.82

8.54

1.530.49

1.57

Electric Ireland

SSE Airtricity

Bord Gáis Energy

PrePayPower

Energia

Pinergy

Others

Panda

MARKET DEVELOPMENTS

32

Domestic Customers - change in market share

Q4 2017 – Q1 2018 Q1 2017 – Q1 2018

Sites MWhs Sites MWhs

Electric Ireland -0.39% 0.22% -1.44% -1.41%

SSE Airtricity -0.34% -0.48% -1.19% -1.61%

Bord Gáis Energy 0.04% -0.37% 0.03% 0.07%

PrePayPower 0.09% -0.17% 0.45% 0.30%

Energia 0.40% 0.58% 1.61% 2.05%

Pinergy 0.03% 0.06% 0.09% 0.13%

Panda 0.11% 0.06% 0.24% 0.29%

Others 0.07% 0.10% 0.21% 0.19%

Table 3.2: % change in market share for Q1 2017 – Q1 2018

3.2 Summary – Market Share – Domestic Electricity

▪ End of Q1 2018, Electric Ireland had the largest domestic electricity market share, with

49.75% of the market in terms of consumption. This was followed by Bord Gáis Energy

with 17.43%, SSE Airtricity with 14.89%, Energia with 8.54%, PrePayPower with 5.82%,

Panda with 1.57% and Pinergy with 1.53%. 2017 was the first year that Electric Ireland’s

share fell below 50%, and it stayed below this level in Q1 2018.

▪ Between Q1 2017 and Q1 2018, Electric Ireland’s market share decreased by 1.41% in

terms of consumption. Energia increased its market share by 2.05%, the largest

increase during the period.

MARKET DEVELOPMENTS

33

4. Market Share – Domestic Gas

4.1 Domestic Gas Market Share by Customer Numbers

and GWhs


and consumption in MWhs. The percentage change in market share from the last quarter and

over the last year is also presented.

Figure 4.1: Q1 2018 Domestic Gas Market Share (%)

Table 4.1: Number of sites and GWhs per supplier

Q1 2018 Domestic Market Share

Sites GWhs


SSE Airtricity 92,923 542

Electric Ireland 140,112 737

Flogas 34,670 225

Energia 50,336 294

Others 37,437 146

Total 663,332 3,618

MARKET DEVELOPMENTS

34

Table 4.2: % change in market share

4.2 Summary – Market Share – Domestic Gas

▪ End of Q1 2018, Bord Gáis Energy had the largest market share in terms of

customer numbers, with 46.41% of the domestic gas market, followed by Electric

Ireland with 21.12%, SSE Airtricity with 14.01%, Energia with 7.59%, Flogas with

5.23%, and PrePayPower with 5.05%. 2017 was the first year that Bord Gáis

Energy’s share fell below 50%, and it stayed below this level in Q1 2018.

▪ Between Q1 2017 and Q1 2018 Bord Gáis Energy lost 3.72% of market share in

terms of customer numbers. Energia increased its market share by 1.72%.

Domestic Gas- change in market share

Q4 2017 – Q1 2018 Q1 2017 – Q1 2018

Sites GWhs Sites GWhs

Bord Gáis Energy -0.81% -0.81% -3.72% -3.44%

SSE Airtricity -0.26% -0.08% -0.48% -0.04%

Electric Ireland -0.19%

-0.07% -1.03% -1.24%

Flogas -0.38% -0.23% -0.64% -0.24%

Energia 0.55% 0.69% 1.72% 1.61%

Others 1.09% 0.50% 4.14% 3.35%

MARKET DEVELOPMENTS

35

5. Customer Switching and Renegotiations

5.1 Electricity, Gas and Dual Fuel Switching in Q1 2018

Customer switching is a key indicator of retail competition and supplier activity within the retail

market. This section contains data on customer switching activity in Q1 2018.

Figure 5.1: Overall Switching in Electricity, Q1 2017 - Q1 2018

The total number of customers switching in electricity was 79,866 in Q1 2018, representing a

3.41% switching rate. This represented a decrease in switching of 3.12% from the previous

quarter, Q4 2017, where there were 82,435 switches and an increase in switching of 2.81% from

the same quarter of the previous year (Q1 2017) where there were 77,681 switches.

-5000

-3000

-1000

1000

3000

5000

7000

Net

Sw

itc

hin

g

Electricity Net Switching of Customers Per Supplier (January 2017 - March 2018)

Electric Ireland Energia SSE Airtricity Bord Gáis Energy

PrePayPower Others Pinergy Panda

MARKET DEVELOPMENTS

36

Month Total Number of Switches

Jan-17 21,626

Feb-17 26,926

Mar-17 29,129

Apr-17 25,944

May-17 23,137

Jun-17 24,386

Jul-17 25,638

Aug-17 27,124

Sep-17 27,498

Oct-17 25,536

Nov-17 31,488

Dec-17 25,411

Jan-18 25,507

Feb-18 28,898

Mar-18 25,461

Table 5.1: Total Monthly Switches in Electricity, Q1 2017 - Q1 2018

Figure 5.2: Overall Switching in Gas, Q1 2017 - Q1 2018

The total number of customers switching in gas was 35,332 in Q1 2018, representing a 5.10%

switching rate. This represented an increase in switching of 12.16% from the previous quarter, Q4

2017, during which time there were 31,502 customer switches, and an increase in switching of

15.74% from the same quarter of the previous year (Q1 2017) where there were 30,527 switches.

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

Net

Sw

itc

hin

g

Gas Net Switching of Customers per Supplier (January 2017 - March 2018)

SSE Airtricity Bord Gáis Energy Electric Ireland Energia

Flogas Gazprom VAYU PrePayPower

Just Energy Panda Power

MARKET DEVELOPMENTS

37

Month Total Number of Switches

Jan-17 9,066

Feb-17 10,092

Mar-17 11,369

Apr-17 10,261

May-17 10,629

Jun-17 9,986

Jul-17 9,522

Aug-17 10,639

Sep-17 11,353

Oct-17 9,743

Nov-17 12,587

Dec-17 9,172

Jan-18 11,519

Feb-18 12,288

Mar-18 11,525

Table 5.2: Total Switches in Gas, Q1 2017 - Q1 2018

The CRU has also begun to collect data on the number of dual fuel switches per month. A dual

fuel customer is defined as a site that has both gas and electricity accounts with the same supplier

(whether on a specific dual fuel tariff or not).

The 'dual fuel switching' indicator refers to the number of dual fuel customers (measured by

MPRN/GPRN) that switched, either one account or both gas and electricity, per month. The data

is provided by suppliers to the CRU.

Figure 5.3: Domestic Electricity, Gas, and Dual Fuel Switches, Q1 2016 - Q1 2018

0

1000

2000

3000

4000

5000

6000

7000

8000

Jan

-16

Feb

-16

Mar

-16

Ap

r-1

6

May

-16

Jun

-16

Jul-

16

Au

g-1

6

Sep

-16

Oct

-16

No

v-1

6

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Nu

mb

er o

f cu

sto

mer

sw

itch

es

Domestic Electricity Domestic Dual Fuel Domestic Gas

MARKET DEVELOPMENTS

38

Dual Fuel Switches

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17 Aug-

17 Sep-17

Oct-17 Nov-17

Dec-17

Jan-18

Feb-18

Mar-18


1,455 1,810 1,009 2,363 2,825 1,614 2,614 1,791 2,571 2,592 1,916 1,360 1,679 3,372 2,264

Domestic Gas 1,323 1,694 1,264 1,381 1,788 1,826 1,502 1,791 2,571 1,161 2,149 1,257 1,907 1,913 2,193

Domestic Dual Fuel

4,218 5,017 3,071 3,854 5,318 4,472 4,469 5,960 4,235 4,462 7,247 4,357 6,728 7,146 5,432

Total Domestic Switches

6,996 8,521 5,344 7,598 9,931 7,912 8,585 9,542 9,377 8,215 11,312 6,974 10,314 12,431 9,889

Electricity Switches

21,626 26,926 29,129 25,944 23,137 24,386 25,638 27,124 27,498 25,536 31,488 25,411 25,507 28,898 25,461

Gas Switches 9,066 10,092 11,369 10,261 10,629 9,986 9,522 10,639 11,353 9,743 12,587 9,172 11,519 12,288 11,525

Total Switches 30,692 37,018 40,498 36,205 33,766 34,372 35,160 37,763 38,851 35,279 44,075 34,583 37,026 41,186 36,986

% dual fuel 23% 23% 13% 21% 29% 23% 24% 25% 24% 23% 26% 20% 28% 30% 27%

Table 5.3: Dual Fuel Switches, January 2017 – March 2018

The total number of dual fuel switches in Q1 2018 was 32,634, corresponding to approximately

28% of all switches in the quarter. This represents an increase in switching of 23% in dual fuel

switches from Q4 2017, during which time there were 26,501 dual fuel switches.

5.2 Renegotiations

This section presents new market monitoring data on renegotiations in the electricity and gas retail

markets from January 2018 to March 2018. Internal switching or renegotiations refer to situations

where a new contract term, tariff or terms & conditions have been negotiated between a customer

and their current supplier. These can be initiated either by the supplier or the customer. Data on

renegotiations complements that collected on switching and helps to provide a more complete

picture of customer engagement and the options open to customers.

This analysis looks at the number of successfully completed renegotiated contracts7 (regardless

of whether initiated by the customer or the supplier or of the number of times an individual

customer renegotiated)8.

7 New data captured under the market monitoring framework may be subject to change 8 Data which was previously pending from suppliers on renegotiations has been submitted which will impact on figures compared to previous reports.

MARKET DEVELOPMENTS

39

Figure 5.4: Successful Domestic and Non-Domestic Electricity Renegotiations

The total number of internal switches in electricity in Q1 2018 was 43,975 compared to 36,066 in

Q4 2017, representing an increase of 22%.

Figure 5.5: Successful Domestic and Non-Domestic Gas Renegotiations

The total number of internal switches in gas in Q1 2018 was 11,306, compared to 12,700 in Q4

2017, representing a decrease of 11%.

MARKET DEVELOPMENTS

40

In Q1 2018, approximately 2.13% of electricity customers and 1.70% of gas customers

renegotiated their contracts with their current supplier. When added to the numbers of customers

who switched supplier in Q1 2018, it can be concluded that 5.54% of electricity and 6.80% of gas

customers looked for a better energy plan through either: switching supplier or renegotiating with

their current supplier.

5.3 Summary – Customer Switching and Renegotiations

▪ The total number of customers switching in electricity was 79,866 in Q1 2018. This

represented a decrease in switching of 3.12% from Q4 2017, where there were 82,435

switches.

▪ The total number of customers switching in gas was 35,332 in Q1 2018. This

represented an increase in switching of 12.16% from Q4 2017, during which time there

were 31,502 customer switches.

▪ Between January and March, dual fuel switches represented 28% of total switches.

▪ The total number of internal switches in electricity in Q1 2018 was 43,975 compared to

36,066 in Q4 2017. The total number of internal switches in gas in Q1 2018 was 11,306,

compared to 12,700 in Q4 2017.

ENERGY CUSTOMER PROTECTION

41

ENERGY

CUSTOMER

PROTECTION


42

6. Financial Hardship PAYG This section looks at the trend in the installation of Pay As You go (PAYG) meters. Prepayment

meters are split into two types; financial hardship PAYG meters and lifestyle choice PAYG meters.

PAYG financial hardship meters are offered in the domestic electricity and gas markets to

customers experiencing financial difficulty paying their bills. The cost of the meter and its

installation are socialised and the customer does not have to pay anything extra for the meter

itself.

If a customer is in arrears, they cannot be disconnected for reasons of non-payment of account

unless they have first been offered a PAYG meter by their supplier. In instances where it would

not be appropriate to offer a PAYG meter, such as the customer not being able to use the meter

or where there is no suitable location for the meter in the premises, the supplier must offer an

alternative.

The Codes of Practice require fair and robust customer processes to be in place for the installation

of such meters. Currently Bord Gáis Energy, Electric Ireland, Energia, Flogas and SSE Airtricity

provide PAYG meters for financial hardship in the electricity and gas domestic markets.

A number of suppliers also offer lifestyle choice prepayment options in the electricity sector

(Electric Ireland, Pinergy and PrePayPower). Customers may find such meters useful to manage

their consumption and spending on electricity.

For gas, GNI provides all the PAYG meters, both for financial hardship and lifestyle choices. If a

customer wishes to avail of a lifestyle choice meter in gas they obtain such from GNI through their

supplier. CRU will continue to monitor the installation of PAYG financial hardship meters in its

quarterly reports.

Electricity PAYG Financial Hardship Installs

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Total Cumulative

Installs 77,101 78,742 80,072 81,026 81,873 82,927 84,090 85,118 85,549

Total Quarterly

Installs 1,921 1,641 1,330 954 847 1,054 1,163 1,028 431

Table 5.1: Total and cumulative number of electricity PAYG installs for reasons of

financial hardship


43

Table 5.2 Total and cumulative number of gas PAYG installs

The total number of PAYG financial hardship installs by ESBN declined between the beginning of

2016 and the beginning of 2017 but has seen an increase in the second part of 2017 before

decreasing again in 2018. The number of PAYG installs for gas increased, the majority being

related to lifestyle choice customers.

Figure 5.1: Total number of PAYG installs between Q1 2014 and Q1 2018

Table 5.3 details the electricity PAYG meter installation rate per supplier. This was calculated by

dividing the number of meter installs per quarter by the number of customers of each supplier per

quarter.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Total Number of PAYG Installs Q1 2014 - Q1 2018

Electricity PAYG Installs Gas PAYG Installs

Gas PAYG Installs

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Total Cumulative

Installs 100,749 101,736 102,499 102,940 103,482 104,021 104,360 104,602 104,852

Total Quarterly

Financial Hardship

Installs

703 987 763 441 542 539 339 242 250

% of quarterly

installs for

financial hardship

70.09% 77.35% 70.98% 41.25% 32.97% 22.08% 18.02% 13.95% 15.59%


44

Electricity PAYG Financial Hardship Install Rate

Electric Ireland

SSE Airtricity Bord Gáis

Energy Energia

Q3 2014 0.33% 0.32% 0.31% -

Q4 2014 0.24% 0.18% 0.18% 0.01%

Q1 2015 0.24% 0.20% 0.16% 0.02%

Q2 2015 0.18% 0.19% 0.24% 0.03%

Q3 2015 0.13% 0.13% 0.17% 0.02%

Q4 2015 0.10% 0.11% 0.12% 0.01%

Q1 2016 0.11% 0.03% 0.02% 0.00%

Q2 2016 0.08% 0.02% 0.03% 0.00%

Q3 2016 0.07% 0.07% 0.09% 0.02%

Q4 2016 0.05% 0.05% 0.07% 0.02%

Q1 2017 0.05% 0.03% 0.06% 0.02%

Q2 2017 0.06% 0.08% 0.06% 0.02%

Q3 2017 0.07% 0.03% 0.06% 0.02%

Q4 2017 0.07% 0.02% 0.04% 0.01%

Q1 2018 0.02% 0.03% 0.02% 0.01%

Table 5.3: Electricity PAYG installation rate

Table 5.4 details the Gas PAYG financial hardship meter installation rate per supplier.

Gas PAYG Financial Hardship Install Rate

Electric Ireland SSE Airtricity Bord Gáis

Energy Flogas

Q1 2014 0.12% 0.56% 0.32% 0.58%

Q2 2014 0.24% 0.66% 0.50% 0.41%

Q3 2014 0.22% 0.45% 0.42% 0.39%

Q4 2014 0.15% 0.26% 0.26% 0.23%

Q1 2015 0.05% 0.16% 0.12% 0.05%

Q2 2015 0.21% 0.29% 0.32% 0.17%

Q3 2015 0.25% 0.24% 0.21% 0.15%

Q4 2015 0.13% 0.13% 0.10% 0.09%

Q1 2016 0.14% 0.16% 0.09% 0.04%

Q2 2016 0.22% 0.27% 0.12% 0.03%

Q3 2016 0.14% 0.13% 0.11% 0.13%

Q4 2016 0.09% 0.07% 0.06% 0.07%

Q1 2017 0.12% 0.08% 0.08% 0.01%

Q2 2017 0.12% 0.06% 0.09% 0.04%

Q3 2017 0.05% 0.03% 0.07% 0.03%

Q4 2017 0.07% 0.02% 0.03% 0.02%

Q1 2018 0.07% 0.04% 0.04% 0.01%

Table 5.4: Gas PAYG installation rate


45

6.1 Summary – Financial Hardship PAYG

▪ The total number of electricity PAYG financial hardship installs in Q1 2018 was

431 compared to 847 in Q1 2017 and 1,028 in Q4 2017.

▪ The total number of gas PAYG installs in Q1 2018 was 1,601. 15.59% of these

were for financial hardship reasons. In the same period in 2017, 1,644 were

installed, with 32.97% for financial hardship reasons. This indicates that the

installs were being driven by lifestyle choice customers.


46

7. Debt Flagging Where a customer requests to change to a new supplier, the customer’s existing supplier has the

facility to inform the new supplier if the customer has an outstanding debt, above the industry

thresholds approved by the CRU9.

The new supplier can then choose whether to proceed with or cancel the change of supplier (CoS)

request where this ‘debt flag’ has been raised. The debt flagging process has been in place since

October 2011 and CRU monitors the use of the debt flagging facility by both losing and gaining

suppliers on an on-going basis.

In Q1 2018 there were 491 debt flags in the domestic electricity market. The number of debt flags

has decreased by 15% between Q1 2017 and Q1 2018 and increased by 4% between Q4 2017

and Q1 2018. The number of CoS requests cancelled, as a result of a debt flag, has decreased

between Q1 2017 and Q1 2018 and between Q4 2017 and Q1 2018, both in total numbers and

percentage of debt flags raised.

Electricity

Debt Flags Q1

2016

Q2

2016

Q3

2016

Q4

2016

Q1

2017

Q2

2017

Q3

2017

Q4

2017

Q1

2018

Total Debt Flags 560 572 637 648 578 664 503 470 491

Total Debt Flags as % of Overall Switches

0.71% 0.70% 0.80% 0.85% 0.74% 0.90% 0.63% 0.57% 0.61%

Debt Flagged CoS Requests Cancelled

160 160 211 232 235 240 168 164 156

% of Debt Flagged CoS Requests Cancelled

29% 28% 33% 36% 41% 36% 33% 35% 32%

Debt Flagged CoS not cancelled

400 412 426 416 343 424 335 306 325

% of Debt Flagged CoS Requests not cancelled

71% 72% 67% 64% 59% 64% 67% 65% 68%

Table 7.1: Debt Flagging in Electricity Q1 2016 – Q1 2018

In the domestic gas market there were 321 debt flags in Q1 2018. The total number of debt flags

has increased by 1.3% between Q1 2017 and Q1 2018 and by 5.2% between Q4 2017 and Q1

2018. The number of CoS requests cancelled, as a result of a debt flag, has remained at the same

levels between Q1 2017 and Q1 2018, but has increased between Q4 2017 and Q1 2018, both

9 Domestic threshold: ≥ €225 for > 60 days from due. Small business & unmetered supply: ≥ €600 for > 30 days from due. Medium sized business: ≥ €1,200 for > 30 days from due.


47

in total numbers and percentage of debt flags raised. Of the debt flags raised the percentage that

led to a refusal of a CoS request increased by 22% between Q4 2017 and Q1 2018, from 32% to

39%.

Gas

Debt Flags Q1

2016 Q2

2016 Q3

2016 Q4

2016 Q1

2017 Q2

2017 Q3

2017 Q4

2017 Q1

2018

Total Debt Flags 180 319 384 241 317 440 398 305 321

Total Debt Flags as % of overall Switches

0.7% 1.4% 1.7% 1.1% 1.0% 1.4% 1.3% 1.0% 0.9%

Debt flagged CoS requests cancelled

84 176 194 99 126 197 146 99 125

% of Debt Flagged CoS Requests Cancelled

47% 55% 51% 41% 40% 45% 37% 32% 39%

Debt Flagged CoS not cancelled

96 143 190 142 191 243 252 206 196

% of Debt Flagged CoS Requests not cancelled

53% 45% 49% 59% 60% 55% 63% 68% 61%

Table 7.2: Debt Flagging in Gas Q1 2016 – Q1 2018

7.1 Summary – Debt Flagging

▪ There were 491 debt flags raised in the electricity market in Q1 2018, corresponding to

approximately 0.61% of all electricity CoS requests in the quarter. This represents a

4% increase from Q4 2017, when 470 debt flags were raised, corresponding to

approximately 0.57% of all CoS requests in that quarter.

▪ 156 debt flagged CoS requests were cancelled in the electricity market in Q1 2018,

which means that 32% of debt flags resulted in a CoS request being cancelled.

▪ There were 321 debt flags raised in the gas market in Q1 2018, corresponding to

approximately 0.9% of all gas CoS requests in that quarter. This represents a 5.2%

increase from Q4 2017, when 305 debt flags were raised, although this also

corresponded to approximately 1% of all gas CoS requests in that quarter.

▪ 125 debt flagged CoS requests were cancelled in the gas market in Q1 2018, which

means that 39% of debt flags resulted in a CoS request being cancelled.


48

8. Disconnections The disconnection/ de-energisation of a customer’s energy supply should always be the last resort

and all suppliers are required to offer a payment plan and prepayment solution to customers in

advance of proceeding to disconnect. This section analyses trends in disconnections in both

electricity and gas for Q1 2018.

In early 2014 CRU, in conjunction with industry and the Department of Communications, Energy

and Natural Resources10, reviewed the market processes to ascertain if more could be done in

further reducing disconnections (e.g. by increasing uptake of PAYG).

While this work was ongoing CRU imposed a moratorium on the disconnections, which was lifted

on 20th February 2014. In May 2014, a voluntary agreement was introduced by most energy

suppliers which saw them committing to never disconnect an engaging customer.

The requirement placed on suppliers to offer payment plans and financial hardship meters instead

of disconnecting customers in the first instance has also benefited those in financial difficulty. It is

likely that improving economic conditions in recent years has also contributed to a decrease in

disconnections.

8.1 Disconnections – Total

The total number of disconnections in Q1 2018 was 1,129 for electricity and 300 for gas. Figure

8.1 shows the total number of disconnections for non-payment of account (NPA) between 2011

and 2017. Table 8.1 shows the annual number of disconnections from 2011 to 2017 and the

number of disconnections in Q1 2018.

Figure 8.1: Trend in NPA disconnections from 2011 – 2017

10 Since renamed to the Department of Communications, Climate Action and Environment


49

Total NPA

Disconnections 2011 2012 2013 2014 2015 2016 2017 Q1 2018

Electricity 17,794 17,441 12,391 8,731 7,783 6,789 4,626 1,129

Gas 4,560 7,558 6,279 3,998 3,542 2,787 2,144 300

Table 8.1: Total (domestic and business) disconnections in electricity and gas 2011 - Q1

2018

8.2 Disconnections - Electricity Market

CRU receives data on electricity disconnections 11 that were completed for non-payment of

account reasons on a monthly basis from ESBN12. This section analyses the data on validated

electricity non-payment of account (NPA) disconnections13.

Table 8.2: Total domestic disconnections by supplier, January 2017 – March 2018

11 This data has been validated by suppliers in advance of publication. 12 NPA can cover customers in arrears that have been disconnected because they cannot pay due to financial hardship or disconnected customers who choose not to pay debt. Currently such customers cannot be distinguished in the data. This NPA data does not include data on self-disconnections. This data includes disconnections of PAYG customers due to fraud/theft. 13 PrePayPower states that, as a prepay supplier, it only disconnects in situations where they suspect a site of being vacant or in instances of fraud based on an analysis of vend and consumption data.

Total Domestic disconnections per supplier

Electric Ireland

SSE Airtricity

Bord Gais

Pre Pay Power

Energia Pinergy Panda Total

Jan-17 46 29 85 29 39 10 9 247

Feb-17 72 49 35 18 13 9 10 206

Mar-17 199 49 46 27 16 18 11 366

Apr-17 157 43 30 33 18 9 4 294

May-17 209 100 46 28 22 16 14 435

Jun-17 125 53 34 40 23 7 15 297

Jul-17 105 52 54 41 22 - 7 281

Aug-17 129 65 42 30 32 - 18 316

Sep-17 108 65 48 28 54 1 11 315

Oct-17 59 32 22 9 32 5 5 164

Nov-17 157 43 52 36 47 11 27 373

Dec-17 27 2 17 4 9 63 2 124

Jan-18 99 42 37 13 33 13 14 251

Feb-18 117 57 49 32 21 35 9 320

Mar-18 154 28 34 16 34 34 8 295


50

The majority of disconnections due to NPA in Q1 2018 were for domestic customers. The market

share of suppliers and rate of disconnections will be considered in the 2018 annual report, which

will look at the disconnection rate per 10,000 customers.

Figure 8.2 shows the trend in disconnections for 2015, 2016, 2017 and Q1 2018 compared to the

trend in installation of PAYG financial hardship meters. Without a PAYG system in place which

provides an option for customers facing difficulty in paying their electricity bills, disconnections

would be significantly higher.

Figure 8.2: Total Domestic Electricity Disconnections compared to PAYG financial

hardship installs for January 2015 to March 2018

% change in electricity disconnections between 2016 and 2018

Total Domestic Non-Domestic

% change between 2016 and 2017 -33% -33% -31%

% change between Q1 2017 and Q1 2018 -1% -6% -19%

Table 8.3: % change in electricity disconnections between 2016 and 2018

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Total domestic electricity disconnections compared to PAYG installs

PAYG financial hardship installs Domestic Disconnections


51

8.3 Disconnections - Gas Market

There are three types of disconnections14 in gas: credit locks, disconnect meters (DMs) and street

isolations (CTSRs). This section only focuses on the disconnections that were undertaken for non-

payment of account (NPA) reasons15.

Total domestic gas disconnections per supplier

Bord Gáis Energy

SSE Airtricity

Flogas Electric Ireland

Energia PrePay Power

Total

Jan-17 45 10 13 36 11 1 116

Feb-17 52 13 12 128 7 0 212

Mar-17 41 15 16 82 12 1 167

Apr-17 40 18 13 108 18 0 197

May-17 74 17 16 64 22 0 193

Jun-17 75 14 19 121 29 3 261

Jul-17 92 9 14 22 14 6 157

Aug-17 93 14 9 6 24 1 147

Sep-17 84 18 36 9 27 1 175

Oct-17 46 7 8 17 18 1 97

Nov-17 74 20 8 37 13 0 152

Dec-17 40 4 4 4 1 0 53

Jan-18 37 7 15 7 10 4 80

Feb-18 66 12 15 20 4 5 122

Mar-18 22 13 6 9 7 0 57

Table 8.4: Total domestic disconnections by supplier, January 2015 – March 2018

The market share of suppliers and rate of disconnections will be considered in the annual report,

which will look at the disconnection rate per 10,000 customers. Figure 8.3 shows the trend in gas

disconnections compared to the trend in installation of PAYG financial hardship meters. The chart

indicates that without a PAYG system, disconnections would be higher.

14 CRU receives separate data reports on all three from GNI. To determine the disconnections that were completed for non-payment of account reasons (NPA), CRU assumes all credit locks were completed for NPA reasons and sends each supplier the GPRNs that relate to their DMs and CTSRs so that the supplier can identify the remaining NPA disconnections. CRU then add together all the CLs and the NPA identified DMs and CTSRs to derive an estimate for total gas NPA disconnections. 15 This data has been validated by suppliers in advance of publication.


52

Figure 8.3: Total Domestic Gas Disconnections compared to PAYG financial

hardship installs for January 2015 to March 2018

% change in gas disconnections between 2016 and 2018

Total Domestic Non-Domestic

% change between 2016 and 2017 -23% -22% 32%

% change between Q1 2017 and Q1 2018 -46% -48% -29%

Table 8.5: Percentage change in gas disconnections between 2016 and 2018

8.4 Summary – Disconnections

▪ The total number of disconnections in Q1 2018 was 1,229 for electricity and 300 for

gas.

▪ Between Q1 2017 and Q1 2018, the total number of electricity disconnections have

declined by 1% and the total number of gas disconnections have declined by 46%.

-

100

200

300

400

500

600

700

Total domestic gas disconnections compared to PAYG installs

Gas PAYG (financial hardship) installs Domestic Gas Disconnections


53

9. Arrears and Payment Plans The CRU has begun to collect data on the number of customers in arrears and on payment plans

per quarter, including their value and length. Figures detailing the number of customers in arrears

and on payment plans per market segment will be published on a quarterly basis.

Arrears refers to the number of customers by market segment that were in arrears at the end of

the reporting period regardless of the value of the arrears. As shown in table 9.1, between 9%

and 23% of customers across all segments were in arrears in Q1 2018.

Total number of customers in arrears and on payment plans in Q1 2018


Non-Domestic Electricity

Domestic Gas Non-Domestic

Gas Total

Arrears 298,643 24,939 102,802 6,180 432,564

% of Customers in Arrears 14% 9% 15% 23% 14%

Payment Plans 27,896 0 4,543 0 32,439

% of Customers on Payment Plans 1.35% 0 0.68% 0 1.07%

Table 9.1: Total number of customers in arrears and on payment plans in Q1 2018

Of those customers in arrears, CRU has conducted analysis on the number of domestic electricity

customers in arrears for greater than 90 days in Q1 2018. In domestic electricity 28% of customers

in arrears have been so for greater than 90 days. In domestic gas 34% of those customers in

arrears have been so for greater than 90 days. This represented 82,505 and 34,977 customers in

electricity and gas respectively.

The option for customers to enter payment plans with their supplier provides an additional

measure of protection to customers who are continuously having difficulty paying their bills.

A payment plan arrangement is a specific payment arrangement with a supplier to cover

outstanding arrears on a customer’s bills. A payment plan can include those arranged to recoup

a debt, regardless of the debt source (i.e. financial hardship, fraud, credit, estimated reads, etc.).

4% Electricity

5% Gas

Customers in arrears

for over 90

days


54

As a percentage of total customers the number of customers per market segment on payment

plans is much lower than for customers in arrears (figure 9.2).

Figure 9.1: Number of Customers on payment plans in relation to the number of customers in arrears exceeding 90 days

Of the total customer numbers in electricity 1.35% (27,896) are on payment plans. In gas, 0.68%

(4,543) are on payment plans.

This is a relatively low percentage considering 4% (82,505) of total electricity and 5% (34,977) of

total gas customers are in arrears for over 90 days. Of those in arrears exceeding 90 days only

9% (electricity) and 4% (gas) are on payment plans.

There is scope for more customers that are in arrears to be on a payment plan. The CRU will keep

this under review.

The CRU has compiled information on the percentage of completed and broken payment plans

for Q1 2018, taken at an aggregate level across suppliers. On average more payment plans are

completed by electricity and gas customers than broken (Electricity: 57% completed; 43% broken.

Gas: 59% completed; 41% broken).

0

20,000

40,000

60,000

80,000

100,000

120,000

Number of Customers on payment plans in relation to the number of customers in arrears exceeding 90 days

On a Payment Plan In Arrears exceeding 90 days

Electricity Gas


55

9.1 Summary – Arrears and Payment Plans

▪ Between 9% and 23% of customers across all segments were in arrears in Q1 2018.

▪ 4% of total domestic electricity customers are in arrears for longer than 90 days. This

represents 28% of those electricity customers in arrears.

▪ 5% of total domestic gas customers are in arrears for longer than 90 days. This

represents 34% of those gas customers in arrears.

▪ The percentage of total customers per market segment on payment plans is 1.35% for

electricity and 0.68% gas indicating that 27,896 electricity customers and 4,543 gas

customers are on payment plans.

▪ Generally, more payment plans are completed by electricity and gas customers than

broken.

BUSINESS MARKET DEVELOPMENTS

56

BUSINESS

MARKET

DEVELOPMENTS

▪


57

10. Business Electricity and Gas Cost Components This section provides an overview of energy cost components for business customers and

discusses electricity and gas prices and the types of offers available to business customers. A

number of new business market monitoring metrics are presented here which will be updated on

a quarterly basis in the CRU’s market monitoring reports. Metrics on non-domestic market share

and disconnections are also presented here. The section is structured as follows:

Breakdown of electricity and gas cost

components

Overview of electricity and gas pass

through costs and charges for 2017/18

Overview of business electricity and gas

plans and prices

Review of green source products for

business customers

Market development

Non-domestic disconnections

Whilst final energy prices are primarily influenced by wholesale energy costs, a proportion of the

final price relates to regulated charges for use of the electricity and gas networks. These charges

are generally passed on to customers, but suppliers may choose to absorb changes to these

costs. Unregulated costs such as the wholesale cost of energy and supply costs faced by suppliers

are discussed in detail in a separate energy supply costs information paper (CRU17921).

Final energy prices are comprised of a number of different costs: wholesale (generation), network

and supply costs. Of these the network cost element is regulated, meaning that the charges are

set by the CRU and suppliers must pay these charges on behalf of their customers. In addition,

there are separate Public Service Obligation (PSO) levies and taxes. This includes the carbon tax

for gas.

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58

Generation

One of the primary components of final retail prices is the cost of wholesale energy. The variation

in wholesale market prices is outside the control of suppliers and the CRU. As the Irish energy

mix is highly dependent on natural gas, this is a major factor in determining final retail prices as

the price of electricity will often reflect movements in the natural gas price.

Details on the wholesale electricity market in Ireland (the Single Electricity Market) can be found

through the following link: Factsheet on the SEM. Historic costs in the wholesale market are

available on the SEMO website (see their Market Data section16) and reports relating to some of

the hedging options available to suppliers against movements in energy costs are available on

the All-Island Project website (see reports on - contracts for difference (CfDs), directed contracts

and PSO CfDs).

In addition to SEM wholesale cost, suppliers pay SEMO (the SEM market operator) a Market

Operator charge to recover the costs of administering the SEM to all electricity users. On the 1st

October 2018, the new I-SEM market will go live. The implementation of this market will require

changes to, and the replacement of, the systems used to currently operate and settle the existing

(SEM) wholesale market. This will also entail changes to wholesale charges.

Up until the end of 2015 Ireland imported circa. 95% of all gas requirements from Britain via

subsea interconnectors with the remainder coming from the Kinsale gas fields off the coast of

Cork. Therefore the wholesale price of gas in Ireland was set by reference to the wholesale price

at the trading hub in Britain (National Balancing Point or NBP) plus the cost of transport to Ireland

via the interconnectors. In December 2015, commercial gas from the Corrib gas fields in Mayo

began production and now provides up to 60% of peak day gas demand in Ireland. Although

Ireland is now primarily supplied by indigenous gas sources, the wholesale price has continued

to be set by reference to the wholesale price at the NBP.

Public Service Obligation (PSO)

The PSO levy is a Government initiative designed to support electricity generation plant to meet

national policy objectives of security of energy supply, the use of indigenous fuels (i.e. peat) and

of the use renewable energy sources in electricity generation.

Carbon Tax

The Carbon tax was introduced in 2010 and applies to mineral oils, natural gas and solid fuels

supplied for combustion in Ireland. All gas suppliers must apply this tax to customer’s bills. This

16 You will need to sign up to access the historic pricing information (note the price is referred to as the system marginal price or SMP for short). Signing up is a simple process but should you have any questions you should contact SEMO’s helpline – for details see http://www.sem-o.com/pages/contactus.aspx.

http://www.cer.ie/docs/000262/cer11075.pdf

http://www.sem-o.com/Pages/default.aspx

https://www.semcommittee.com/

http://www.sem-o.com/pages/contactus.aspx


59

energy tax was introduced as a means to incentivise manufacturers and suppliers to provide low

carbon services and products to the household consumer market.

Networks

The cost associated with the services of Networks, which involves sending electricity from

generation plants through the Transmission and Distribution system to customers’ premises, also

accounts for a very significant portion of the final price of electricity for customers. The same cost

applies for gas for the transport of gas through the Transmission and Distribution system.

The CRU undertakes revenue reviews known as “Price Controls” or “Price Reviews” for EirGrid

and ESB Networks in electricity, and for Gas Networks Ireland in gas. These revenue reviews

consider the costs of developing, maintaining and operating the electricity and gas systems. On

the basis of these five yearly revenue controls, the CRU approves the level of charges that the

network operators may levy for each tariff year, which usually runs from October to October.

Each supplier is charged on a per customer basis for access to the electricity or gas networks.

Each supplier has discretion in terms of how they pass these costs through to their final customers.

Supply

Supply costs refer to a supplier’s operating expenditure in supporting their business (e.g.

administrative costs). Supply costs are not detailed here but are the subject of a separate energy

supply costs information paper (CRU17921). While this paper focuses on domestic supply costs,

further information on the breakdown of supplier costs is provided. Section 4 of this paper gives

an overview of cost components for business electricity and gas.

Taxes

Suppliers are responsible for payment of an electricity tax and for returns/accounts in relation to

it. Of these costs, suppliers must charge their customers the PSO levy and all applicable taxes.

They may, however, choose to either absorb or charge the remaining costs to their customers.

A request for information was issued to suppliers in August 2017 requesting a breakdown of their

domestic and non-domestic supply costs. Based on this, the CRU has calculated the percentage

components of business electricity and gas costs to give an indication to business customers of

the components of their final bill. As there are large variations in consumption between different

types of businesses this will lead to different final bill breakdowns, however the graphs below

provide an overview of the components of costs for non-domestic customers faced by suppliers.

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60

10.1 Electricity

A breakdown of business electricity costs is presented below. As the PSO levy is applied

separately to small commercial customers (MIC < 30 kVA) and medium/large commercial

customers (MIC ≥ 30 kVA), two separate charts to account for this have been developed.

Figure 10.1: Business Electricity Total Costs (with PSO levy for small commercial

customers)

Figure 10.2: Business Electricity Total Costs (with PSO levy for medium/large commercial

customers)


61

The majority of costs for business electricity customers are comprised of fuel costs and network

costs.

10.2 Gas

A breakdown of business gas costs is presented below, based on a weighted average cost

component per customer for each gas supplier. The carbon tax has been calculated based on

consumption for an ‘SME1’ customer as defined by GNI, with 27,223kWh of annual gas

consumption.

Figure 10.3: Business Gas Costs


62

11. Business Electricity and Gas Plans and Prices This section provides information on small business electricity and Industrial and Commercial (IC)

gas plans and prices, based on information collected on a quarterly basis from suppliers by the

CRU. Information is received on the range of tariff plans that small electricity business (DG5

customers) and IC gas customers (with a supply point capacity below 3,750kWh and annual

quantities of below or greater than 73,000kWh of gas annually) are on for each supplier.

The number and range of plans offered by suppliers in these business segments varies widely,

and unlike domestic plans, there is no requirement in the CRU’s supplier handbook for suppliers

to publish details of these plans. A revised Supplier Handbook was published in April 2017, which

requires suppliers to publish a high level statement on their website regarding the methodology

used to determine energy tariffs for non-household customers. This statement should document

the considerations when setting energy tariffs for different categories of non-household

customers.

Suppliers offer a range of plans for small electricity business and IC gas customers, which can

include fixed energy prices for multi-year contracts, fixed term discount products off standard or

unit rates, business pay as you go contracts, variable rates and the option to fix all or a portion of

electricity prices for a certain usage period. A variety of contract terms and payment options are

available, while some suppliers require deposits and have penalty clauses associated with fixed

term contracts.

It should be noted that this section only covers the top ten commercial plans provided by suppliers.

The business market segment generally has a higher proportion of customers supplied under

bespoke plans than the domestic market segment. Generally these bespoke plans are not

included in the top ten plans provided by suppliers to the CRU. Therefore the average annual

customer bill under the top ten commercial plan bracket may be higher than that for those

customers who have signed up to a bespoke plan with a lower overall unit rate. The following

information in this section should be viewed under this caveat.

11.1 Small Business Electricity Prices

Currently, seven suppliers offer non-domestic electricity, namely Electric Ireland, Bord Gáis

Energy, Energia, SSE Airtricity, Flogas, Vayu and GoPower. The CRU receives information on

the standard business plans for suppliers with above 1% market share and where applicable their

top 10 small business electricity plans, which includes information on the average annual bill for

business customers on different plans, unit and standing charges, details of each plan and the

total consumption and number of customers for each plan.


63

Average annual bills for different non-domestic electricity consumption levels are shown below,

based on a weighted average across multiple supplier’s plans.

Figure 11.1: Weighted average annual bills for different non-domestic electricity

consumption levels

These plans contain a range of standing charges and unit charges, based on the tariff and meter

type and any discounts applied. The range of these charges as reported for Q1 2018 is shown

below.

Unit Charge

Lowest unit charge Highest unit charge Average unit charge

0.056c/kWh 0.21c.kWh 0.16c/kWh

There is a large range in these charges which is dependent on the consumption type and level

across different business customers.

Standing Charge

Lowest standing charge Highest standing charge Average standing charge

€0.56 per day €6.049 per day €1.105 per day

11.2 IC Gas Prices

Currently, seven suppliers offer non-domestic electricity, namely Electric Ireland, Bord Gáis

Energy, Energia, SSE Airtricity, Vayu, Flogas and PrePayPower. The CRU receives information


64

on the standard business plans for suppliers with above 1% market share and where applicable

their top 10 IC gas plans, which includes information on the average annual bill for business

customers on different plans, unit and standing charges, details of each plan and the total

consumption and number of customers for each plan.

Average annual bills for different IC gas consumption levels are shown below, based on a

weighted average across multiple supplier’s plans.

Figure 11.2: Weighted average annual bills for IC gas business consumption bands

These plans contain a range of standing charges and unit charges, based on the tariff and any

discounts applied. The range of these charges as reported for Q1 2018 is shown below.

Unit Charge

Lowest unit charge Highest unit charge Average unit charge

0.015c/kWh 0.058c/kWh 0.041c/kWh

Standing Charge

11.3 Eurostat Non-Domestic Electricity and Gas Prices

Eurostat publishes data on a bi-annual basis on average end user prices for different domestic

and industrial/commercial electricity and gas markets. Information is published on the prices for

Lowest standing charge Highest standing charge Average standing charge

€0.2214 per day €7.963 per day €1.046 per day


65

each consumption band in electricity and gas and on average prices across all consumption bands

compared to Euro Area average.

Figure 11.3: Average Electricity Prices (ex-VAT) to Business – All Consumption Bands

The price of electricity to business consumers in Ireland has been above both the EU and Euro

Area since the second half of 2011. In the second half of 2017 it was 11% and 7% above the EU

and Euro Area respectively. The graph below shows business electricity prices for different

consumption bands over time.

Figure 11.4: Non-domestic electricity prices over time, 2008 - 2017


66

The price of gas to business consumers in Ireland was below both the EU and Euro Area between

Semester 2 of 2009 and Semester 2 of 2013. Since 2013 this has fluctuated between the EU and

Euro area average.

Figure 11.5: Average Gas Prices (ex-Vat) to Business – All Consumption Bands

In the second half of 2017 the weighted average price of gas to business customers in Ireland

was 10% and 5% above the EU and Euro Area average respectively. The graph below shows

business gas prices for different consumption bands over time.

Figure 11.6: Non-domestic gas price over time, 2008 - 2017


67

11.4 Summary

▪ In semester 2 of 2017, business electricity prices increased in bands IA, IE and IF and

decreased in bands IB, IC and ID compared to semester 2 of 2016. Average price

increased in the dominant consumption band (IB) by 1.69%, being 4.28% higher than the

Euro Area average.

▪ Business gas prices decreased in all consumption bands from semester 2 2016 to

semester 2 2017. Average price decreased in the dominant consumption band (I4) by

6.9%, being 1.68% higher than the Euro Area average.


68

12. Business Electricity Market Share

12.1 Small Business Electricity Market Share by

Customer Numbers and MWhs


and consumption in MWhs for small business electricity customers. The percentage change in

market share from the last quarter and over the last year is also presented.

Figure 12.1: Q1 2018 Small Business Market Share (%)

Q1 2018 Small Business Market Share

Sites MWhs

Electric Ireland 72,522 360,305



Energia 38,965 297,273

Others 18,185 103,149

Total 184,584 1,050,579


Small Business Market Share


39.29

16.46

13.29

21.11

9.85

34.30

16.0111.58

28.30

9.82

Electric Ireland

Airtricity

Bord Gáis Energy

Energia

Others


69


Small Business - change in market share

Q4 2017 – Q1 2018 Q1 2017 – Q1 2018


Electric Ireland -0.47% 0.47% -3.89% -2.13%

SSE Airtricity -0.62% -0.26% -1.57% -1.62%

Bord Gáis Energy 0.15% -0.52% 0.14% -1.24%

Energia -0.33% -0.18% 1.48% 1.68%

Others 1.28% 0.48% 3.84% 3.32%

▪ End of Q1 2018, Electric Ireland had 34.30% of the small and medium business

electricity market in terms of consumption, followed by Energia with 28.30%, SSE

Airtricity with 16.01% and Bord Gáis Energy with 11.58%.

▪ Electric Ireland lost 2.13% of its market share in terms of consumption between Q1

2017 – Q1 2018, while Energia increased its market share by 1.68%.


70

12.2 Medium Business Electricity Market Share by


The medium business electricity segment is comprised of DG3 and DG4 (public lighting and

unmetered connections), DG4 and DG6 (Low voltage maximum demand). Prior to the beginning

of 2017, customer numbers for this segment for DG3 and DG4 were based on the number of

grouped MPRNs and single point unmetered connections. Grouped MPRNS can include any

number of physical connections or technical MPRNs.

From 2017, the reports for DG3 and DG4 include the number of physical connections to the

distribution system rather than at a grouped level, so the total number of customer numbers will

appear larger and reported market share of customer numbers in this segment has changed.

However, reporting of market share on a consumption basis has not changed.

Figure 12.2: Q1 2018 Medium Business Electricity Market Share (%)

Medium Business Market Share


18.65

1.82

1.01

76.31

0.240.09 1.88

38.92

9.956.66

34.13

2.34

0.30

7.72

Electric Ireland

SSE Airtricity

Bord Gáis Energy

Energia

Vayu

Panda Power

Others


71

Q1 2018 Medium Business Market Share

Sites MWhs

Electric Ireland 17,262 413,774


Bord Gáis Energy 939 70,766

Energia 70,63817 362,919

Vayu 222 24,856

Others 1,826 82,042

Total 92,570 1,063,254


Medium Business - change in market share

Q4 2017 – Q1 2018 Q1 2017-Q1 2018


Electric Ireland -0.20% -0.56% -1.07% -2.16%

SSE Airtricity -0.07% -0.05% -0.15% -0.51%

Bord Gáis Energy -0.07% -0.44% -0.15% -1.41%

Energia 0.06% -0.63% 6.09% 4.07%

Vayu -0.01% -0.03% -0.03% -0.27%

Others 0.29% 1.72% -4.68% 0.28%


▪ End of Q1 2018, Electric Ireland held 38.92% of the medium business market in terms

of consumption, followed by Energia with 34.13%, SSE Airtricity with 9.95%, Bord Gáis

Energy with 6.66% and Vayu with 2.34%.

▪ Between Q1 2017 – Q1 2018 Energia increased its market share by 4.07%, while

Electric Ireland’s market share decreased by 2.16%.

17 From 2017, the reports for DG3 and DG4 include the number of physical connections to the distribution system rather than at a grouped level, so the total number of customer numbers appears larger and reported market share of customer numbers in this segment has changed.


72

12.3 Large Energy Users Electricity Market Share by



and consumption in MWhs for large energy users. The percentage change in market share from

the last quarter and over the last year is also presented.

Figure 12.3: Q1 2018 LEU Electricity Market Share (%)

Q1 2018 LEU Market Share

Sites MWhs

Electric Ireland 658 767,715

SSE Airtricity 337 811,940

Bord Gáis Energy 167 149,396

Energia 416 397,435

Vayu 143 82,597

Others 153 295,307

Total 1,874 2,504,391


LEU Market Share


35.11

17.988.91

22.20

7.63

8.16

30.65

32.42

5.97

15.87

3.30 11.79

Electric Ireland

SSE Airtricity

Bord Gáis Energy

Energia

Vayu

Others


73

LEUs - Change change in market share

Q4 2017 – Q1 2018 Q1 2017-Q1 2018



SSE Airtricity 0.54% 1.03% 2.02% 7.68%

Bord Gáis Energy -0.61% -0.57% -0.01% -1.80%

Energia 0.45% 1.62% 3.02% 2.43%

Vayu 0.15% 0.15% 0.04% -0.12%

Others 1.06% 0.53% 1.62% 2.30%

Table 12.6: % change in market share for Q1 2017 to Q1 2018

▪ End of Q1 2018, SSE Airtricity held 41.60% of the market in terms of consumption,

followed by Electric Ireland with 30.65%, Energia with 15.87%, Bord Gáis Energy with

5.97% and Vayu with 3.30%. This is the first time that Electric Ireland’s market share

drops to a level below another market participant’s share and holds the second largest

share in the market.

▪ Between Q1 2017 to Q1 2018, Electric Ireland’s market share decreased by 10.48% in

terms of consumption, while SSE Airtricity’s market share increased by 7.68%.


74

13. Business Gas Market Share From the Q1 2017 report, the non-domestic gas market share segments presented in the CRU’s

quarterly market monitoring reports changed based on discussions with GNI to better align the

names and classifications of the gas market segments with the GNI Code of Operations. A number

of the current non-domestic gas definitions were defined when under price regulation, so are now

no longer applicable after deregulation of the market.

The only market segment that changed was the previous RTF market segment, which was split

into the Daily Metered (DM) and Large Daily Metered (LDM) market segments. FVT-eligible gas

was renamed medium-sized non-domestic gas for the purpose of reporting. These changes are

set out below:

Current Name of Market Segment Revised Names and definitions

Total Non-domestic gas Total non-domestic gas

Industrial/Commercial gas (Non-Daily Metered - NDM IC customers with a SPC below 3,750kWh)

Industrial/Commercial gas (NDM IC customers with a SPC below 3,750kWh)

Fuel-Variation Tariff eligible gas (NDM FVT customers with a SPC above 3,750 kWh)

Medium-sized non-domestic gas (NDM FVT customers with a SPC above 3,750 kWh)

Regulated Tariff Formula eligible gas (Annual consumption of between 5.5GWhs and 264GWhs)

Daily Metered (DM) Customers

Large Daily Metered (LDM) Customers excluding power generators.


75

13.1 Industrial and Commercial Gas Market Share by

Customer Numbers and GWhs


and consumption in MWhs for IC gas customers. The percentage change in market share from


IC Market Share

(a) Customer Nos (b) GWhs

Figure 13.1: Q1 2018 IC Gas Market Share (%)

Q1 2018 IC Market Share

Sites GWhs

Bord Gáis Energy 10,989 348

SSE Airtricity 1,117 31

Electric Ireland 2,924 110

Flogas 5,498 189

Energia 3,751 147

Vayu 435 35

Total 24,714 859


4.52

44.46

11.83

22.25

15.18

1.76 3.58

40.54

12.76

22.03

17.05

4.04

Airtricity

Bord Gáis Energy

Electric Ireland

Flogas

Energia

Vayu


76

IC - change in market share

Q4 2017 – Q1 2018 Q1 2017 – Q1 2018


Bord Gáis Energy 0.10% 0.17% -0.71% 1.73%

SSE Airtricity -0.09% -0.07% -0.36% -0.29%

Electric Ireland 0.46% 0.78% 5.11% 7.23%

Flogas 0.02% -0.43% -0.39% -1.17%

Energia -0.46% -0.52% -3.51% -7.26%

Vayu -0.03% 0.07% -0.14% -0.24%

Table 13.2: % change in market share for Q1 2017 to Q1 2018

▪ End of Q1 2018, Bord Gáis Energy had the largest market share in the IC gas market,

with 44.46% in terms of customer numbers. This was followed by Flogas with 22.25%,

Energia with 15.18%, Electric Ireland with 11.83%, SSE Airtricity with 4.52% and Vayu

with 1.76%.

▪ Between Q1 2017 to Q1 2018, Electric Ireland increased its market share by 5.11%,

while Energia’s market share decreased by 3.51%.


77

13.2 Medium Sized Non-Domestic Market Share by

Customer Numbers and GWhs


and consumption in MWhs for medium sized non-domestic customers. The percentage change in

market share from the last quarter and over the last year is also presented.

Medium Sized Non-Domestic Market Share


Figure 13.2: Q1 2018 Medium Sized Non-Domestic Market Share (%)

Q1 2018

Medium Sized Non-Domestic Market Share

Sites GWhs

Bord Gáis Energy 674 361

SSE Airtricity 68 31

Flogas 357 207

Energia 303 147

Vayu 251 135

Electric Ireland 194 110

Total 1,847 992


3.68

36.49

10.50

19.33

16.40

13.59

3.14

36.40

11.06

20.90

14.84

13.66

Airtricity

Bord Gáis Energy

Electric Ireland

Flogas

Energia

Vayu


78

Medium Sized Non-Domestic Market Share - change in

market share

Q4 2017 – Q1 2018 Q1 2017 – Q1 2018


Bord Gáis Energy -0.36% 0.43%

-0.31% -0.28%

SSE Airtricity 0.13% 0.06% 0.74% -0.25%

Flogas 0.08% -0.38% -1.00% -1.13%

Energia 0.22% -0.27% -7.09% -6.47%

Vayu -0.30% -0.09% -0.96% -0.99%

Electric Ireland 0.22%

0.24% 8.63% 9.13%


▪ End of Q1 2018, Bord Gáis Energy had the largest market share in the medium sized

non-domestic market, with 36.49% in terms of customer numbers. This was followed

by Flogas with 19.33%, Energia with 16.40%, Vayu with 13.59%, Electric Ireland with

10.50% and SSE Airtricity with 3.68%.

▪ Between Q1 2017 – Q1 2018, Electric Ireland increased its market share by 8.63% in

terms of customer numbers, while Bord Gáis Energy had a decrease in its market share

by 0.31%.


79

13.3 DM Market Share by Customer Numbers and GWhs


and consumption in MWhs for DM gas customers. The percentage change in market share from


DM Market Share


Figure 13.3: Q1 2018 DM Gas Market Share (%)

Q1 2018 DM Market Share

Sites GWhs




Gazprom 1 6

Energia 52 229

Vayu 39 161

Flogas 5 9

Total 232 915


8.19

28.88

21.12

22.41

0.43 16.81

2.16

9.12

26.70

19.95

25.05

0.69

17.56

0.94

SSE Airtricity

BG Energy

Electric Ireland

Energia

Gazprom

Vayu

Flogas


80

DM Market Share - change in market

share

Q4 2017 – Q1 2018 Q1 2017 – Q1 2018


Bord Gáis Energy -0.43% 0.97%

-4.90% -4.30%

SSE Airtricity 0.00% -0.21% -0.70% -2.70%

Electric Ireland -0.43% -0.10% 9.57% 8.73%

Gazprom 0.00% 0.18% -0.90% -0.40%

Energia 1.72% 0.33% -1.14% -0.05%

Vayu -0.86%

-1.10% -2.75% -1.74%

Flogas 0.00% -0.07% 0.82% 0.34%


▪ End of Q1 2018, Bord Gáis Energy had the largest market share in the DM market, with

28.88% in terms of customer numbers. This was followed by Energia with 22.41%,

Electric Ireland with 21.12%, Vayu with 16.81%, SSE Airtricity with 8.19%, Flogas with

2.16% and Gazprom with 0.43%.

▪ Between Q1 2017 – Q1 2018, Electric Ireland increased its market share by 9.57% in

terms of customer numbers, while Bord Gáis Energy had a decrease in its market share

by 4.90%.


81

13.4 LDM Market Share by Customer Numbers and GWhs


and consumption in MWhs for LDM gas customers. The percentage change in market share from


LDM Market Share


Figure 13.4: Q1 2018 LDM Gas Market Share

Q1 2018 LDM eligible Market Share

Sites GWhs




Energia 2 36

Vayu 5 123

Total 39 1,359


12.82

53.85

15.38

5.13

12.82 12.74

61.96

13.56

2.689.06

Airtricity

BG Energy

Electric Ireland

Energia

Vayu


82

LDM Market Share - change in market

share

Q4 2017 – Q1 2018 Q1 2017 – Q1 2018


Bord Gáis Energy 6.48% 0.68%

6.48% -1.75%

SSE Airtricity 2.29% 4.90% 2.29% 3.79%


Energia -2.77% 0.00% -2.77% 0.15%

Vayu 2.29%

0.81% 2.29%

0.55%


▪ End of Q1 2018, Bord Gáis Energy had the largest market share in the LDM market,

with 53.85% in terms of customer numbers, followed by Electric Ireland with 15.38%,

SSE Airtricity and Vayu each with 12.82% and Energia with 5.13%.

▪ Between Q1 2017 – Q1 2018, Bord Gáis Energy increased its market share by 6.48%

in terms of customer numbers, while Electric Ireland had a decrease in its market share

by 8.30%


83

14. Market Concentration

14.1 Electricity Market Segments

The HHI (Herfindahl-Hirschman Index) is a widely used metric to measure market

concentration18. With low market concentration, the ability of any market player to exploit market

power to the detriment of consumers is reduced and consumers can benefit from competition,

innovation and customer services.

HHI Index Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Small Business 2,803 2,739 2,680 2,584 2,542 2,494 2,450 2,454 2,418

Medium Business 2,899 2,826 2,840 2,833 2,832 2,869 2,861 2,963 2,888

Large Business 2,896 2,835 2,783 2,632 2,647 2,559 2,475 2,484 2,428

Table 14.1: HHI scores from Q1 2017 – Q1 2018

Overall, the HHI has remained fairly consistent over the last 9 quarters, from Q1 2016 to Q1 2018.

There has, however, been a steady decrease in the HHI in the small business and large business

segments over time, while there has been an increase in HHI in the medium business segment.

Table 14.1 is illustrated in Figure 14.1 below.

Figure 14.1: HHI trends over time (Q1 2016 – Q1 2018)

18 It is calculated as the sum of the squares of the market shares of all firms in the market, or the 50 largest firms if applicable. It ranges between 0, for an infinite number of small firms, and 10,000, for one firm with a 100% market share. The European Commission considers a HHI above 2000 to signify a highly concentrated market. The U.S. Department of Justice considers a market with a HHI of less than 1,500 to be a competitive marketplace, a HHI of 1,500 to 2,500 to be a moderately concentrated marketplace, and an HHI of 2,500 or greater to be a highly concentrated marketplace.

2000

2200

2400

2600

2800

3000

3200

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

HHI Trend Q1 2016 - Q1 2018

Small Business Medium Business Large Business


84

It is worth noting, however, that a high or low HHI is only an indication of market concentration

and needs to be viewed in combination with other measures of market conduct and performance.

It is for this reason that a GINI coefficient has been calculated for each market segment and will

be compared with the HHI scores.

The GINI coefficient is a commonly-used measure of inequality that condenses the entire

distribution for a market into a single number between 0 and 1: the higher the number, the greater

the degree of inequality19 in that market. The GINI coefficient is a numerical representation of a

Lorenz Curve, which maps the ratio of the number of participants in a market and the

corresponding market share of each participant.

The following graphs below represent the relationship between the percentages of participants in

the various business markets corresponding with their respective market share. Analysing the

blue line in the graphs below, for example, in the Medium Business DM market, 60% of the market

participants represent approximately 20% of the market in Q1 2016. In Q1 2018 this figure

decreases to 17%. The red line represents true ‘equality’. The GINI coefficient is a numerical

representation of the Lorenz Curve by calculating the surface area between the blue line and the

red line20.

Lorenz Curves for Small Business Market

19 Typically, a GINI coefficient of 0.35 would represent moderate inequality in a market, whilst a GINI Coefficient of 0.60 or higher would signal strong inequality. 20 If the area to the right of the red line and the left of the blue line is called ‘A’. The area to the right of the blue line is ‘B’. Then the GINI coefficient = (A/A+B).

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

arke

t sh

are

% of suppliers in market

GINI 0.60 Small Business Lorenz Curve Q1 2016

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

arke

t sh

are


GINI 0.58 Small Business Lorenz Curve Q1 2018


85

Lorenz Curves for Medium Business Market

Lorenz Curves for Large Business Market

Table 14.2 reports the GINI coefficient scores from Q1 2016 – Q1 2018. The GINI coefficient, like

the HHI, has remained relatively stable over time for the medium business segment, whilst it has

gradually fallen for the small business segment from 0.64 in Q1 2016 to 0.58 in Q1 2018 and for

the large business segment from 0.52 in Q1 2016 to 0.46 in Q1 2018. Figure 14.2 below illustrates

this trend.

GINI Coefficient Q1

2016 Q2

2016 Q3

2016 Q4

2016 Q1

2017 Q2

2017 Q3

2017 Q4

2017 Q1

2018

Small Business 0.64 0.63 0.62 0.61 0.61 0.60 0.59 0.58 0.58

Medium Business 0.55 0.53 0.53 0.52 0.52 0.52 0.53 0.53 0.52

Large Business 0.52 0.51 0.50 0.48 0.47 0.45 0.44 0.43 0.46

Moderate Inequality 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45

Strong Inequality 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6

Table 14.2: GINI Coefficient from Q1 2016 – Q1 2018

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

arke

t sh

are


GINI 0.55. Medium Business Lorenz Curve Q1 2016

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

arke

t sh

are


GINI 0.52 Medium Business Lorenz Curve Q1 2018

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

arke

t sh

are


GINI: 0.52. Large Business Lorenz Curve Q1 2016

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

akre

t sh

are


GINI 0.46 Large Business Lorenz Curve Q1 2018


86

Figure 14.2: GINI trends over time (Q1 2016 – Q1 2018)

▪ In the electricity market, the HHI (measure of market concentration) has seen a steady

decrease in the small business and large business segments over time, while there has

been an increase in the medium business segment.

▪ The GINI coefficient has remained relatively stable over time for the medium business

segment, whilst it has gradually fallen for the small business and large business

segments.


87

14.2 Gas Market Segments

HHI Index Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

I&C 2,699 2,675 2,636 2,675 2,700 2,710 2,596 2,615 2,612

FVT 2,536 2,534 2,479 2,531 2,515 2,537 2,473 2,290 2,301

DM 3,254 3,237 3,125 3,149 2,225 2,234 2,149 2,111 2,131

LDM - - - - 4,484 4,404 4,047 4,290 4,274

Table 14.3: HHI scores from Q1 2016 – Q1 2018

Overall, the HHI has remained fairly consistent over the last 9 quarters, from Q1 2016 to Q1 2018.

There has, however, been a decrease in the HHI for Medium Business DM from 3,254 in Q1 2016

to 2,131 in Q1 2018, with a big drop between Q4 2016 and Q1 2017. This is due to the revised

market segments, i.e. the split of the RTF market segment into the Daily Metered (DM) and Large

Daily Metered (LDM) market segments. The HHI has also fallen for the FVT market segment from

2,536 in Q1 2016 to 2,301 in Q1 2018. This table is illustrated in Figure 14.3 below.

Figure 14.3: HHI trends over time (Q1 2016 – Q1 2018)

As previously mentioned, a high or low HHI is only an indication of market concentration and

needs to be viewed in combination with other measures of market conduct and performance. It is

for this reason that a GINI coefficient has been calculated for each market segment and will be

compared with the HHI scores.

The following graphs represent the relationship between the percentages of participants in the

various business markets corresponding with their respective market share. Analysing the blue

line in the graphs below, for example, in the Medium Business DM market, 60% of the market

participants represent approximately 13% of the market in Q1 2016. In Q1 2018, this figure


88

increases to 20%. The red line represents true ‘equality’. The GINI coefficient is a numerical

representation of the Lorenz Curve by calculating the surface area between the blue line and the

red line21.

Lorenz Curves for I&C Market

Lorenz Curves for FVT Market

Lorenz Curve for DM Market

21 If the area to the right of the red line and the left of the blue line is called ‘A’. The area to the right of the blue line is ‘B’. Then the GINI coefficient = (A/A+B).

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

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GINI 0.42 I&C Lorenz Curve Q1 2016

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

arke

t sh

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GINI 0.41 I&C Lorenz Curve Q1 2018

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

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GINI 0.40 FVT Lorenz Curve Q1 2016

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

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GINI 0.33 FVT Lorenz Curve Q1 2018

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

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GINI 0.57 DM Lorenz Curve Q1 2016

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

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GINI 0.47 DM Lorenz Curve Q1 2018


89

Lorenz Curve for LDM Market

Table 14.4 reports the GINI coefficient scores from Q1 2016 – Q1 2018. The GINI coefficient, like

the HHI, has remained relatively stable over time, whilst falling for the Medium Business DM

segment over time. The GINI coefficient has also fallen from 0.40 in Q1 2016 to 0.33 in Q1 2018

for the FVT market segment. Figure 14.4 below illustrates this trend.

GINI Coefficient Q1

2016 Q2

2016 Q3

2016 Q4

2016 Q1

2017 Q2

2017 Q3

2017 Q4

2017 Q1

2018

I&C 0.42 0.42 0.41 0.42 0.42 0.43 0.41 0.41 0.41

FVT 0.40 0.40 0.39 0.40 0.39 0.43 0.40 0.33 0.33

DM 0.59 0.58 0.58 0.57 0.49 0.49 0.47 0.46 0.47

LDM - - - - 0.52 0.52 0.51 0.52 0.49

Moderate Inequality 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45

Strong Inequality 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6

Table 14.4: GINI Coefficient Scores Q1 2016 – Q1 2018

Figure 14.4: GINI trends over time (Q1 2016 – Q1 2018)

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

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t sh

are


GINI 0.52 LDM Lorenz Curve Q1 2017

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

% o

f m

arke

t sh

are


GINI 0.49 LDM Lorenz Curve Q1 2018


90

▪ In the gas market, the HHI has remained fairly consistent overall from 2016 to Q1 2018.

There has, however, been a decrease in the HHI for FVT and DM from Q1 2016 to Q1

2018. This is due to the revision of the definition of market segments. There has been

a decrease in the HHI in the LDM sector from Q1 2017, when this sector was introduced,

to Q1 2018.

▪ The GINI coefficient, like the HHI, has remained relatively stable over time, whilst falling

for the FVT and DM segments over time.


91

15. Non-Domestic Disconnections The total number of non-disconnections in Q1 2018 was 283 for electricity and 41 for gas. These

represent a 2% decrease in electricity non-domestic disconnections and a 5% decrease in gas

compared to the number of non-domestic disconnections in Q4 2017. Tables 15.1 and 15.2 below

show total non-domestic disconnections for January 2016 to March 2018 in electricity and gas

respectively.

Table 15.1: Total Non-Domestic Electricity Disconnections per Supplier, January 2016 –

March 2018

Total Non-Domestic Electricity Disconnections per Supplier

Electric Ireland

Energia SSE

Airtricity

Bord Gáis

Energy

PrePay Power

Pinergy

Panda

Flogas Total

Jan-16 85 45 18 16 - - - - 164

Feb-16 81 23 15 31 - - - - 150

Mar-16 122 28 18 25 - - - - 193

Apr-16 110 28 23 26 - - - - 187

May-16 136 43 40 13 3 2 - - 237

Jun-16 68 31 12 14 - - - - 125

Jul-16 70 24 17 17 - - - - 128

Aug-16 79 28 20 14 - - - - 141

Sep-16 82 25 24 18 - - - - 149

Oct-16 38 30 21 8 - - - - 105

Nov-16 49 27 26 20 - - - - 131

Dec-16 41 14 8 8 - - - - 80

Jan-17 22 40 22 16 - - - - 100

Feb-17 42 26 17 18 - - - - 103

Mar-17 39 37 28 18 1 - - - 123

Apr-17 38 13 18 6 0 0 - - 75

May-17 53 33 32 13 0 1 - - 132

Jun-17 34 20 8 8 1 1 1 - 73

Jul-17 40 28 12 19 3 0 1 - 103

Aug-17 46 19 17 21 1 0 - - 104

Sep-17 39 21 13 33 0 0 - - 106

Oct-17 41 8 13 19 - - - 3 84

Nov-17 80 21 21 27 2 3 1 1 156

Dec-17 20 4 3 19 1 1 1 - 49

Jan-18 50 23 22 16 0 1 1 0 133

Feb-18 28 20 20 25 2 3 1 0 99

Mar-18 21 21 10 8 0 1 0 0 51


92

Total Non-Domestic Gas Disconnections per Supplier

Bord Gáis

Energy

SSE Airtricity

Flogas Electric Ireland

Energia VAYU Total

Jan-16 11 2 0 0 3 1 17

Feb-16 17 2 2 0 1 1 23

Mar-16 78 1 0 2 8 0 89

Apr-16 16 0 2 3 1 1 23

May-16 19 1 1 2 2 0 25

Jun-16 9 2 4 1 6 0 22

Jul-16 10 1 6 0 6 0 23

Aug-16 11 2 0 2 0 0 15

Sep-16 26 5 3 0 5 1 40

Oct-16 6 1 0 0 4 0 11

Nov-16 8 1 3 0 7 0 19

Dec-16 6 0 2 1 4 0 13

Jan-17 4 1 7 2 3 0 17

Feb-17 5 1 1 2 6 0 15

Mar-17 10 4 4 0 8 0 26

Apr-17 2 2 4 1 0 0 9

May-17 19 1 3 3 0 0 26

Jun-17 11 1 2 2 5 0 21

Jul-17 23 1 0 0 3 0 27

Aug-17 11 0 2 0 4 0 17

Sep-17 9 1 3 0 3 0 16

Oct-17 11 0 4 0 4 0 19

Nov-17 11 0 1 0 1 0 13

Dec-17 10 1 0 0 0 0 11

Jan-18 8 0 2 1 3 0 14

Feb-18 6 0 2 1 8 0 17

Mar-18 4 0 2 0 4 0 10

Table 15.2: Total Non-Domestic Gas Disconnections per Supplier, January 2016 – March 2018

93

16. Conclusion This report has detailed electricity and gas retail prices, plans and cost components for Q1 2018,

along with domestic and business market shares of suppliers, and market concentration. It has

also presented data for Q1 2018 concerning customer switching, PAYG installs, debt flagging,

disconnections, and arrears and payment plans.

A total of 7 suppliers announced price increases in the first half of 2018, based in increased

wholesale costs and regulated charges. Supplier’s increases and effective dates for tariff changes

are outlined in this report.

In Q1 2018, Electric Ireland remained the largest electricity supplier in terms of consumption in

the domestic, small business, and medium business market segments. However, for the first time

in Q1 2018 Electric Ireland held the second largest share in the LEU market, with SSE Airtricity

being the largest supplier in this segment. In gas, Bord Gáis Energy remained the largest supplier

in terms of customer numbers in all market segments (domestic, IC, medium-sized, DM and LDM).

The market share of both suppliers remained below the threshold at which they were price

deregulated. It is worth noting that incumbent suppliers are now at or below 50% market share in

the domestic markets (Electric Ireland 49.75% in electricity; BGE 46.29% in gas).

Switching has continued in both the electricity and gas markets with 79,866 electricity customers

and 35,332 gas customers changing their supplier in Q1 2018.

The number of PAYG meters installed for financial hardship and amount of disconnections for

non-payment of accounts declined in Q1 2018. The CRU continues to support and promote the

early intervention by suppliers to encourage customer engagement and uptake of payment plans

and PAYG meters and to continue to ensure that the disconnection of a customer is treated as a

‘last resort’. The CRU continues to work with industry to determine what further actions can be

taken to limit the level of disconnections.

The CRU commits to continue to monitor all electricity and gas market segments and should it

feel that customers are not benefiting, the CRU will take action to improve matters.

94

Annex 1 Overview of Electricity pass through costs and charges for 2017/18

1 Electricity Market Segments

The electricity market is comprised of four different market segments covering different DUoS

groups (distribution use of system groups or DGs)22: domestic, small-sized business, medium-

sized business and large energy users (LEUs). It is important to know your DuoS group as some

charges vary depending on which one you are in. The table below provides a breakdown of the 3

different business markets and their respective DUoS groups.

Business Market DUoS Group

Small Business DUoS Group 5 – General Purpose

Medium Business Duos Group 4 – Local Authority Public Lighting

DUoS Group 6 – LVMD & LLF

Large Energy User

DUoS Group 7- Medium Voltage Max Demand

DUoS Group 8- 38KV Max Demand

DUoS Group 9 – 38KV Max Demand

T-CONN (Transmission Connected)

2 Consumption

Some of the components of prices are charged on consumption at the trading point (on the

transmission network) and others on consumption at the selling point (on the distribution network).

Energy networks operate at two levels – transmission and distribution. Transmission networks

comprise the high voltage and high pressure lines. Distribution networks comprise the low voltage

and low pressure lines. All generation charges and Transmission Use of System (TUoS) charges

are based on consumption at the trading point, while Distribution Use of System (DUoS) charges

are based on consumption at the selling point. Retail consumption data published on a quarterly

22 A DUoS charge is a fee that ESB Networks charges to electricity suppliers for use of the electricity distribution system. The amount of DUoS that ESBN charges a supplier for each customer depends on which DUoS Group a customer is classified as, which is based on several factors including the voltage a premises is connected at, the type of meter installed, or if electricity is exported. Source: ESB Networks.

95

basis by the CRU refers to consumption at selling point (i.e. at the customer’s site). This will

determine the level of charges to apply at the customer’s site.

To determine the trading point consumption for different market segments, a distribution loss

adjustment factor (DLAF) is used. Electricity must be transported from the trading point to the

customer’s metering point. During this transportation, losses occur and a DLAF is applied to

customers metered energy consumption to account for the losses. The energy consumption

measured at a customer’s meter is multiplied by the DLAF to get the consumption at which

generation and transmission charges are applied. The CRU publishes DLAFs each year with

different DLAFs depending on the size of a customer’s connection and the time of consumption.

The following are the applicable DLAFs for the 2016/17 tariff year.

DLAFS

Time Period

Composite Day Night

38kV Sales 1.020 1.021 1.017

MV Sales 1.036 1.038 1.031

LV Sales 1.087 1.092 1.074

3 Overview of charges

The following electricity charges are regulated and approved annually. These costs are necessary

in order for networks and other market operators to recoup the cost of generating, transmitting

and distributing electricity, and suppliers are required to pay these annually. Changes to these

charges generally come into effect on the 1st October annually (capacity charges are updated on

1st January).

96

Cost Charge Description

Generation

Capacity Payments Payment made to generators for availability separate from energy

production.

Market Operator

Charges

Charges levied on generators and suppliers for the operation of the

wholesale markets.

Imperfection Charges Constraint costs on the network are recovered by imperfection

charges.

Networks

Network transmission

use of system charges

(TUoS)

Charges levied for the building, maintenance and operation of the

transmission network.

Network Distribution

use of system charges

(DUoS)

Charges levied for the building, maintenance and operation of the

distribution network,

PSO

Public Service

Obligation Levy

Levied for support for renewables, security of supply and indigenous

fuels (peat).

While it is the decision of each supplier whether or not to pass through such costs to final

customers, it is likely that most suppliers pass through all such costs.

97

4 Generation Charges

Capacity Payments

The capacity payment mechanism contributes towards generators’ fixed costs because the

system marginal price (SMP) is set in relation to short-run generation costs only. A capacity

payment mechanism is needed to allow generators to fully recover their long-run fixed costs.

The table below shows the applicable charge for the business electricity market segments.

Year Indicative Cost Per MWh

2017 €14.09

Market Operator (MO) Charges

The Single Electricity Market (SEM) is administered by the Single Electricity Market Operator

(SEMO). SEMO imposes a Market Operator charge to recover the costs of administering the SEM

to all electricity users on a cent per kilowatt hour (c/kWh) basis.

The following are the applicable charges for the business electricity market segments.

MO Charges 2017/18

Fixed Supplier Charge (per unit23) €128

Variable Supplier Charge (per MWh) €0.286

Imperfection Charges

SEMO also recovers costs on an annual basis in relation to imperfection charges. Imperfections

are made up of Make Whole Payments, Energy Imbalance Charges and Dispatch Balancing

Costs (constraint costs). These are all costs relating to the operation of the grid. The following are

the applicable charges for the business electricity market segments.

Imperfection charge 2017/18

Tariff €5.00/MWh

23 Refers to supplier unit. A full list of supply units is on the SEMO website

98

5 Network Charges

Distribution Use of System (DUoS) charges

DUoS tariffs are charged to suppliers on the basis of the amount of energy used by their

customers, and include standing charges. The DSO charges are calculated annually based on

the ‘allowed revenue’ (as determined by the CRU). DUoS tariffs are approved annually by the

CRU and are shown below for DG4 to DG6. DG7 to DG9 are included in the appendix.

Segment DUoS Standing charge 2017/18

DUoS Unit rates 2017/18

Low Power Factor Surcharge

DG3 €0.03340/kWh

DG4 €0.03340/kWh (ex DG4 premium24)

DG 5 and DG5b (low voltage non-

domestic customers, non-

max demand)

Standard meter: €95.369/ customer/ annum Day/night meter: €95.369/

customer/ annum

Standard meter: €0.04401/kWh

Day/night meter: Day: €0.05147/kWh Night: €0.00629/kWh

Standard meter: €0.01021/kVArh Day/night meter: €0.01021/kVArh

DG5a (low voltage autoproducers

MEC>MIC, non-max demand)

Na

Standard meter: €0.04401/kWh

Day/night meter: Day: €0.05147/kWh Night: €0.00629/kWh

Standard meter: €0.01021/kVArh Day/night meter: €0.01021/kVArh

DG 6 and DG 6b (low voltage

business customers, max

demand)

Standing charge: €889.591/customer /annum Capacity

charge: €33.199/kVA of MIC /annum

Day: €0.02619/kWh Night: €0.00309/kWh

€0.00933/kVArh

DG 6a (low voltage autoproducers MEC>MIC, max

demand)

Na Day: €0.02619/kWh Night: €0.00309/kWh

€0.00933/kVArh

Transmission Use of System (TUoS) charges

TUoS charges are applied for the use of the transmission system infrastructure in Ireland. The

following are the applicable charges for the business electricity market segments.

24 DG4 tariff also incurs an additional premium in respect of additional costs incurred on public lighting installations. This premium is 0.01 c/kWh but it is currently being reviewed.

99

TUoS for 2016/17 DTS-D225 (non-

LEUs) DTS-D126 (non-

LEUs) DTS-D127 (LEUs) DTS-T28 (LEUs)

Network Capacity Charge

€6.2143/MWh (day hrs)

€1,591.4405/MW €1,234.9471/MW €1,463.7413/MW

Network Transfer Charge

€2.9541/MWh €2.9541/MWh €2.2925/MWh €2.2924/MWh

System Services Charge

€4.6270MWh €4.6270/MWh €3.5905/MWh €3.5905/MWh

DSM Charge €0.0001/MWh

(day hrs) €0.0001/MWh



(day hrs)

Note: DTS-D2 (non-LEU) is applicable to DG 3, DG 4, DG 5, the majority of DG 6 customers.

DTS-D1 (non-LEUs) is applicable to some DG 6 customers.

DTS-D1 (LEUs) is applicable to DG 7, DG 8 and DG 9 customers.

DTS-T (LEUs) is applicable to T-CONN customers

6 Public Service Obligation Levy (PSO)

The Public Service Obligation Levy (PSO) is charged on all electricity customers and designed to

support the national policy objectives of security of supply, the use of indigenous fuels (i.e. peat)

and the use of renewable energy sources in electricity generation.

The proceeds of the levy are used to contribute to the additional costs incurred by PSO-supported

electricity generation which are not recovered in the electricity market, typically via contracts that

suppliers have in place with electricity generators. The following are the applicable charges for

the non-domestic electricity market segment.

PSO Levy Monthly Levy Amount

2017/18

Small commercial customers (MIC of less than 30kVA)

€26.44 per customer

Medium & large customers (MIC of equal to or greater than 30kVA)

€3.64 per customer

25 DTS-D2 non-LEU customers are those connected to the distribution system and have a maximum import capacity of less than 0.5MWs. 26 DTS-D1 non-LEU customers are those connected to the distribution system and have a maximum import capacity (MIC) greater than 0.5MWs. 27 DTS-D1 customers are those connected to the distribution system and have a maximum import capacity (MIC) greater than 0.5MWs. 28 Applies to customers connected directly to the transmission system.

100

7 Electricity Tax

To comply with the EU Energy Tax Directive, an electricity tax on suppliers of electricity was

introduced in 2008. Suppliers are responsible for payment of the tax and for returns/accounts in

relation to it. This cost is passed on to final customers29.

Electricity Tax

Business €0.50 per MWh

29 Households are exempt

101

Annex 2 Overview of gas pass through charges and costs for 2017/18

This section describes the network related elements for gas business customers. As with the

electricity charges, these charges are approved by the CRU.

1 Gas Market Segments

For the purpose of the CRU’s reporting, the gas market is comprised of three distinct sectors

which is dependent on the Annual Quantity (AQ) consumed at the site. Annual Quantity is an

estimate of the amount of gas that will be consumed at a site within a given year, and is usually

based on historic consumption at a site. In addition, your Supplier is required to book capacity on

the network for peak day usage. This is known as the Supply Point Capacity (SPC).

Business customers are classified by the meter type, which fall into three categories; Non-Daily

Metered (NDM), Daily Metered (DM) and Large Daily Metered (LDM). Each category of business

user is dependent on the gas consumption expected at the site.

• Large Daily Metered; AQ above 77,5000 MWh

• DM: AQ between 5,500 MWh and 57,500 MWh

• NDM: AQ below 5,500 MWh

In general, DM and LDM customers will have a site specific consumption. This would include

factories, dairies and power generation, and therefore deriving an average for this type of site

would not derive a useful average.

2 Consumption

LDM and DM customers’ consumption is atypical in so far as deriving an average would be

difficult, as the range of customer types varies from power generation plants to dairies. However,

GNI (as the network operator) does generate average consumption profiles for the NDM sector,

where all domestic customer and smaller businesses are connected. These are known as SME1,

SME2 and SME3. When GNI derives average profiles it takes historic consumption and long term

weather patterns into account, and also corrects these for any anomalies e.g. if weather was

abnormally warm or cold. This assists GNI in deriving the AQ at each point which is based on the

annual consumption at each point as well as the SPC which is the Peak day demand at the point.

Average yearly consumption per gas point per category as modelled by GNI is shown below.

102

Category Band ( AQ) Number of gas

points Average yearly

consumption per gas point

SME 1 Below 73,000 KWh 15,850 27,223kWh

SME 2 Equal to or above 73,000 KWh and SPC less than

3,750 KWh 8,250 186,670kWh

SME 3 SPC greater than 3,750

KWh 1,800 1,342,383 kWh

3 Network Charges

There are two sets of charges that apply to business gas customers dependent on whether the

customer is connected to the high pressure transmission network or the low pressure distribution

network. All power generation and large businesses are connected to the transmission network

and therefore only pay transmission tariffs. All other customers are connected to the distribution

network, and therefore must also pay distribution tariffs. This is because in the case of distribution

connected customers, all gas flows through the transmission network initially before entering the

distribution network.

In the case of both transmission and distribution the applicable charges are based on two charges:

commodity charges which are based on actual flows of gas (AQs) and capacity charges which

are based on “booking “space within the network as per the SPC described above.

Distribution tariffs

The Distribution Use of System charges are calculated annually based on the ‘allowed revenue’

of Gas Networks Ireland which are set out in the Price Controls that CRU publish on a 5 yearly

basis. Revenues are recovered on an 80:20 split between capacity and commodity charges.

Category by Annual Quantity Capacity Charge (c/pk day kWh)

<=73 MWh 158.3296

> 73 MWh - <=14,653 MWh 140.1600 - 4.0747 * Ln(MDQ)*

> 14,653 MWh - <=57,500 MWh 350.1701 - 50.2496 * Ln(MDQ)

> 57,500 MWh 43.1821

103

The capacity and commodity unit charges are determined by inserting the Maximum Daily

Quantity into the relevant formulae (MDQ measured in MWh). The result of the formulae are in

terms of c/peak day kWh and c/kWh respectively.

Category by Annual Quantity Commodity Charge (c/kWh)

<=73 MWh 0.3424

> 73 MWh - <=14,653 MWh 0.2735 - 0.0266 * Ln(MDQ)

> 14,653 MWh - <=57,500 MWh 0.3187 - 0.0420 * Ln(MDQ)

> 57,500 MWh 0.0623

GNI has a Distribution Tariff Calculator which allows you to input your distribution entry and/or exit

point requirements which will be used to calculate the applicable distribution tariff. The calculator

is available here.

Transmission tariffs

Tariffs for the transmission system are based on an entry-exit regime. This means that customers

pay for putting gas onto the system and for offtaking gas from the system. Similar to the distribution

system, these charges recover the allowed revenues for Gas Networks Ireland.

The transmission system has three entry points; Moffat in Scotland where the Gas Network Ireland

system joins the UK gas system, Inch in Cork and Bellanaboy where Corrib gas enters the

network. For each of these there is an entry capacity tariff applicable. In addition there is a single

commodity charge (per MWh) that applies regardless of the entry point.

In addition, there is a capacity and commodity charge for exiting the network. The same charge

applies regardless of where gas is taken off the network. These charges are set out below.

Moffat entry capacity €359.18

Inch entry capacity

€53.02 (storage entry)

€156.65 (production entry)

Bellanaboy entry capacity €658.43

Entry Commodity €0.114

Exit Capacity €402.08

Exit Commodity €0.237

104

To calculate the cost on a per customer basis, similar to the distribution network, the capacity

booked and the commodity i.e. flow must be known. The capacity tariffs above are based on an

annual product which means that for each MWh of capacity booked, the customer can use that

amount each day of the tariff year which runs from October to October. In addition, customers can

purchase a short term product which is capacity booked for a specific period of time. These short

term capacity products are available as Quarterly, Monthly, Daily and Within Day products. The

charges for each of these products is based on a multiplier to the annual product. The decision to

purchase either an annual or a short term product is usually dependent on the typical consumption

profile of a particular customer.

In addition, commodity charges apply on a per MWh basis. These are flow based and vary from

customer to customer.

The transmission calculator allows you to input your transmission entry and/or exit point

requirements which will be used to calculate the applicable transmission tariff.

4 Carbon tax

Since 1 May 2012 the rate of carbon tax has been €0.37 cent per kWh. This is subject to VAT of

13.5%, making a total of €0.00420 per kWh. All natural gas suppliers in Ireland have to levy the

carbon tax on their customers. Some natural gas customers are exempt from paying carbon tax.

These include:

• Natural gas consumers who use it for the purpose of generating electricity.

• Natural gas manufacturer consumers, where it is used for the purpose of chemical

reduction.

• Natural gas manufacturing customers where it is used in electrolytic or metallurgical

processes.

Partial exemptions from paying carbon tax apply to:

• Industrial and manufacturer consumers covered by a greenhouse gas emissions permit

that has been issued by the Environmental Protection Agency.

• Suppliers dealing with the cogeneration of environmentally friendly heat and power, as

decided by the Minister for Finance.

https://www.gasnetworks.ie/corporate/gas-regulation/tariffs/transmission-calculator/

105

Annex 3 Charges in the Business Markets Developments section

The papers referenced below provide more information on the charges detailed in the Business

Market Developments Section;

• CER17273D ‘DLAFs for Oct 17-18

• ACPS 2018 Decision Paper ‘Fixed Cost of a Best New Entrant Peaking Plant, Capacity

Requirement and Annual Capacity Payment Sum For Trading Year 2018’.Sept 2017’.

• ‘SEMO Tariffs and Imperfection Costs, 7th September 2017, available here.

• ‘Imperfections Charge October 2017-September 2018 and Incentive Outturn October

2015-September 2016’, available here.

• CER/17/273 ‘Electricity Distribution Network Allowed Revenue 2018, Distribution Tariffs

2017/2018 & Distribution Loss Adjustment Factors’ and accompanying tariff statement.

• CER/17/276 ‘Electricity Transmission Network Allowed Revenue 2018 and Transmission

Tariffs 2017/18’.

• PSO levy to be applicable for the 2017/18 tariff year, CER/16/251.

• DUoS charges to be applicable for the 2017/18 tariff year, see CER/17/274 and GNI’s

accompanying tariff statement here.

The table below details the applicable DUoS charges for each DG group.

Segment DUoS Standing charge 2017/18

DUoS Unit rates 2017/18 Low Power

Factor Surcharge

DG3

€0.03340/kWh

DG4 €0.03340/kWh (ex DG4

premium30)

DG 5 and DG5b (low voltage non-

domestic customers, non-

max demand)

Standard meter: €95.369/ customer/ annum Day/night meter: €95.369/

customer/ annum

Standard meter: €0.04401/kWh Day/night

meter: Day: €0.05147/kWh Night: €0.00629/kWh

Standard meter: €0.01021/kVArh

Day/night meter:

€0.01021/kVArh

DG5a (low voltage autoproducers

Na Standard meter:

€0.04401/kWh Day/night Standard meter: €0.01021/kVArh

30 DG4 tariff also incurs an additional premium in respect of additional costs incurred on public lighting installations. This premium is 0.01 c/kWh but it is currently being reviewed.

https://www.cru.ie/wp-content/uploads/2017/09/CER17273D-DLAFS-for-Oct-17-Sept-18.pdf

https://www.semcommittee.com/sites/semcommittee.com/files/media-files/SEM-17-078%20ACPS%202018%20Decision%20paper%20-%20Oct%20update_0.pdf

http://www.sem-o.com/Publications/General/2017-2018%20SEMO%20Tariffs%20and%20Imperfections%20Costs.pdf

https://www.semcommittee.com/sites/semcommittee.com/files/media-files/SEM-17-076%20Imperfections%20Charge%202017-18%20and%20Incentive%20Outturn%202015-16%20Decision%20Paper.pdf

https://www.cru.ie/wp-content/uploads/2017/09/CER17273-Electricity-Distribution-Network-Allowed-Revenue-2018-Distribution-Tariffs-20172018-DLAFs.pdf

https://www.cru.ie/wp-content/uploads/2017/09/CER17273C-DUoS-Tariff-Statement-for-Oct-17-Sept-18.pdf

https://www.cru.ie/wp-content/uploads/2017/09/CER17276-CER-Paper-on-2018-Transmission-Revenue-Final-to-publish.pdf

http://www.cer.ie/docs/001074/CER16252%20PSO%20Levy%202016-17%20-%20Revised%20Decision%20Paper.pdf

https://www.gasnetworks.ie/corporate/gas-regulation/tariffs/distribution-tariffs/Distribution-Tariff-for-Gas-Year-2017-18.pdf

106

MEC>MIC, non-max demand)

meter: Day: €0.05147/kWh Night: €0.00629/kWh

Day/night meter:

€0.01021/kVArh

DG 6 and DG 6b (low voltage

business customers, max

demand)

Standing charge: €889.591/customer /annum Capacity

charge: €33.199/kVA of MIC /annum

Day: €0.02619/kWh Night: €0.00309/kWh

€0.00933/kVArh

DG 6a (low voltage

autoproducers MEC>MIC, max

demand)

Na Day: €0.02619/kWh Night:

€0.00309/kWh €0.00933/kVArh

DG 7 & DG 7b (medium voltage customers, max

demand)

Standing charge: €1,567.998/customer

/annum Capacity charge: €11.466/kVA of

MIC /annum Day

Day: €0.00453/kWh Night: €0.00071/kWh

€0.00819/kVArh

DG 7a (medium voltage


demand)


€0.00071/kWh €0.00819/kVArh

DG 8 & DG 8b (38kV looped

customers, max demand



MIC /annum

Day: €0.00100/kWh Night: €0.00007/kWh

€0.00768 /kVArh

DG 8a (38kV looped


demand)


€0.00007/kWh €0.00768

/kVArh

DG 9 & DG 9b (38kV tailed

customers, max demand)



MIC /annum

Day: €0.00100/kWh Night: €0.00007/kWh

€0.00768/kVArh

DG 9a (38kV tailed autoproducers MEC>MIC, max

demand)


€0.00007/kWh €0.00768/kVArh

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