New Zealand has ranked number two in the world when it comes to customer switching in the electricity market, according to a global study.
The VaasaETT World Energy Retail Market Rankings Report shows a steady increase in New Zealanders’ desire to ensure they are getting the best value for money, with the 2nd place ranking up from 5th place in 2009.
VaasaETT, a global energy think-tank based in Finland, noted that New Zealand was the biggest riser in the rankings, rapidly approaching the number one ranked Victoria, Australia. It credited the Electricity Authority’s What’s My Number campaign with the shift.
The Utility Customer Switching Research Project, the only global view of its kind, tracked and rated 38 electricity markets in which full retail competition exists.
"2011 saw a continuation of the year-on-year increasing global switching activity that has taken place ever since records began. Once again Victoria, Australia holds the crown for the most active market in the world, but hot on its heels is now New Zealand," the report notes.
The switching rate in New Zealand has been trending upwards since 2008, from an annual rate of 10.5% in 2008, to 19.5% in 2011. The report notes a number of regulatory initiatives and market changes that have contributed to the increase in retail competition, including the What’s My Number campaign and developing a more active hedge market.
Electricity Authority Chief Executive Carl Hansen says the research findings provide an international context for the What’s My Number campaign. The aim of the campaign is to place greater competitive pressure on electricity retailers by increasing consumer propensity to switch when another retailer offers them a better deal.
"From our perspective switching rates are part of a more complex equation. What we may in fact find in the future is that lower switching rates may also indicate a highly competitive market as it may show that retailers are being driven to offer very similar prices, removing the incentive for consumers to switch."
More than 388,000 New Zealanders made the switch to new providers in 2011 and collectively stood to save $8.7 m. In the first six months of this year 183,138 made the switch.
The What’s My Number campaign, run in partnership with Consumer Affairs and Consumer NZ, offers a quick and easy way to make informed choices about power suppliers by visiting www.whatsmynumber.org.nz. The tool enables consumers to identify what they could be saving on their electricity bills, by using a simple calculator.
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