German Households Keener to Switch Power Supplier
Date: 01-Aug-07
Country: GERMANY
Author: Vera Eckert
The trend is intensified by public distrust of nuclear power after recent safety glitches at generation plants.
Power industry association VDEW has raised its estimate for those of Germany's 40 million households that have opted for a new supplier, or renegotiated their contracts, to 40 or 50 percent. This compares with an estimated third who had chosen a new supplier up to 2006, a spokeswoman for the Berlin-based group said.
"There are three factors at play, a higher environmental awareness, rising sensitivity to prices and the fact that power firms are differentiating their range of products," she said.
A dynamic German retail power scene -- which was technically made possible in 1998 but remained static for years under the dominance of leading suppliers -- is in line with demands for open energy markets across the European Union from July 2007.
Numbers best demonstrate that change is happening.
Renewable power company LichtBlick in Hamburg said it was recording one thousand customer enquiries each day since short circuits and a fire forced German utility Vattenfall Europe to shut two northern German reactors on June 28.
LichtBlick's managing director Heiko von Tschischwitz said in an interview the firm was targetting 340,000 customers by the end of this year, compared with 220,000 at the start of 2007 and clearly exceeding the initial target for the year of 280,000.
As LichtBlick charges above-market prices, the trend illustrates consumers fears that atomic power could be unsafe.
Other renewable power vendors such as Greenpeace energy and Naturstrom also say they are fast winning new customers in a sector that to date supplies 14 percent of all retail power.
Another group of customers just wants cheaper prices.
TARIFFS RISE
They are annoyed that at least 180 utilities out of 900 in total are increasing their tariffs in July and August after government control over retail prices was abandoned as the flipside of the EU reform.
On top of rattling customers with the nuclear incidents, which led to some top managers being fired but have not yet been resolved, Vattenfall was also among those raising prices.
As a result, newcomer Dutch utility Nuon was able to win 42,000 new customers in the two cities of Hamburg and Berlin, which used to be Vattenfall strongholds, in May and June.
"Power companies must start differentiating themselves to build a competitive market for a homogenous product," said Holger Krawinkel, energy expert at consumer association VZBV.
"They also must realise that they can't push through arbitrary price hikes any longer," he said.
He added that extra services such as smart metering and energy consulting could start playing a wider role.
Vattenfall's woes aside, the top players are not shying away from more competition, but are among those leading the change.
E.ON has started an aggressive nationwide campagin to boost its cheap brand E WIE EINFACH and RWE is doing the same with its brand Evivo.
Utilities are also using charm to woo clients. In Leipzig, newly-weds between May and September receive 1,000 kilowatt hours free of charge on top of a 100 euro (US$137) voucher from their local firm.
