EU Energy Market Liberalisation and the Challenges Retailers Face
Over the past several years, the EU energy market has been going through a process of liberalisation aimed at separating the monopoly that comprised production, distribution and trading. New regulatory schemes were introduced for the activities that remained grouped which has introduced necessary compliance measures and business challenges for energy retailers and DSOs across the European Union.
How the energy market changes are impacting retailers and DSOs
The new regulations for liberalisation support EU objectives around smart metering, national data hubs and the split of vertically integrated energy companies. Consequently, we are now seeing different types of ownership structures, mergers, and the emergence of new players.
We know that when it comes to customers, ‘one size’ does not fit all. Customers want the freedom to pick and choose their services depending on their specific needs. One effect of that on retailers is reduced customer loyalty.
In summary, there are currently three key priorities for EU energy companies:
- Ensuring compliance with new regulations
- Developing the right positioning in the new market
- Gaining insight into customers and their priorities so that organisations can improve loyalty by offering relevant products and develop effective care solutions.
Meeting these priorities will require having the right service providers and systems in place. Hansen has been a global provider for software and services for energy and communication companies since 1971 and has nearly 120 EnoroCX clients in Europe. The Hansen CIS solution serves a wide range of clients in B2B and B2C markets, ranging in size from a few hundred end-customers to enterprises with millions of end-customers.
Specific challenges that EnoroCX helps address
EnoroCX is usually implemented to meet the needs of one of the following projects: data hub projects, implementation projects where there has been a split of vertically integrated companies, or implementation projects off the back of mergers (with EnoroCX replacing current and multiple solutions.)
For data hub projects, the main challenge Hansen helps address is developing compliance with regulations. For example, some find it hard to maintain proprietary software with new regulations, so these companies lean on Hansen’s experience so they can focus on keeping and winning more customers.
For businesses working on implementation projects either due to a split or merger, there are two main objectives:
- Gain economy of scale through process automation, effective customer care and simplifying solution architecture.
- Stand out from the crowd by putting the customer in focus, offering relevant products and effective campaigns, and enhancing brand uniqueness.
Organisations can’t afford not to act
Despite the everchanging nature of the markets, the cost of doing nothing is very serious if it results in noncompliance. In addition to fines, retailers may be banned from operating. Additionally, the new market has meant that developing economies of scale is crucial. The competition is fierce and new ownership structures have shifted businesses’ margins and growth opportunities. How much will you lose by not standing out from the crowd? It’s anyone’s guess, but it can happen fast and to any organisation.
What can energy retailers expect to achieve after implementing EnoroCX?
- Effectively secure regulatory compliance
- Successfully leverage economies of scale by reducing operational costs
- Improve customer engagement, satisfaction and loyalty.
EnoroCX is created specifically for the European market for all utilities. We share our product enhancements with all clients – which means clients gain access to improvements driven by others, not just the improvements they drive. It’s one of the reasons why it’s such a trusted brand in the EU.
To learn more about the challenges EU energy retailers are facing and EnoroCX, view our 13-min on-demand webinar.