Over 303,000 Irish people switched electricity suppliers last year, and more than 106,000 switched gas suppliers, putting Ireland right at the top of the EU's switching charts. But what are the driving forces behind these switching figures, and should they be higher?
As a nation, Ireland has been winning a few unwanted awards of late.
We’re number two in the EU for broadband prices, the third most expensive EU country in which to live and our mortgage variable rates are among the highest across the 28-member states.
But today we got some good news!
We’re number two in the EU when it comes to switching electricity suppliers and…drumroll please….we’re number one for gas switching!
That’s according to the Commission for Energy Regulation’s report on switching numbers and energy price changes in 2015.
Last year, 303,187 electricity customers switched suppliers, amounting to a switching rate of 13.53%; the second highest in the EU.
And it doesn’t take a genius to work out why these 303,000 customers switched suppliers. Why it’s to avail of lower prices of course!
There are two key driving forces behind falling prices and strong switching numbers: a drop in wholesale electricity prices and an increase in competition.
As of April 2016, wholesale electricity prices (that’s the price at which suppliers purchase electricity before selling it on to the likes of you and me), were down 35% on last year.
The majority of suppliers have opted to pass these savings on to consumers in the form of new customer discounts, as opposed to price cuts. This, of course, makes switching the smart choice for people looking to stop overpaying on their electricity bills and to make some substantial savings.
The increased level of competition in the market has also helped push down prices.
There are now seven electricity suppliers in the domestic residential market in Ireland, meaning that a new discount or special offer from one can often lead to a flurry of similar offers from others.
Falling Electricity Prices
In 2015, the cheapest standard electricity price plan belonged to Electric Ireland, and customers who were on this deal and had average annual consumption spent about €1,211 on electricity. However, the CER says that the best discounted price plan available last year was a whole €150 cheaper than this.
And what's more, customers who were on the most expensive standard electricity plan in 2015 paid a chilling €235 more than customers who were on the cheapest discounted plan.
The trend of falling prices and attractive discounts has continued in 2016 and, as reported by the CER, the best discounted price plan in January 2016 alone was already better than the cheapest deal in all of 2015.
It’s a similar story for Ireland’s gas market.
A total of 16% of Ireland’s gas customers switched suppliers in 2015, making us the EU’s top switching country for gas.
The 106,862 customers that switched suppliers last year almost certainly did so to take advantage of the fall in prices, which has also been caused by plummeting wholesale prices and rising competition.
The fall in wholesale gas prices between April 2015 and April 2016 stood at an astonishing 45%, and there are now five companies that supply gas to the residential market here, adding further fuel to the competitive fire.
Falling gas prices
Electric Ireland had the cheapest standard gas price plan on the market in 2015, costing a household with average annual consumption €979 over the course of a year.
But, as with electricity, there were substantial savings to be made by switching gas too.
Flogas had the cheapest discounted rate on the market in 2015, at an annual cost of €853 to the average household. This means that a customer who switched to this plan from the most expensive standard gas plan on the market has an extra €126 in his/her pocket this year. Not bad!
All in all, there was a potential saving of €361 available to customers who switched both gas and electricity suppliers last year.
Why aren’t more people switching?
While we’re performing well as a nation when compared to our EU counterparts, 86% of electricity customers and 84% of gas customers didn’t switch last year.
To put in another way, 1,938,212 electricity customers missed out on a potential saving of €235 each in 2015, while 536,140 gas customers each failed to take advantage of a €126 saving.
So, as a nation, we paid over €523m more for gas and electricity than we had to, just because we didn’t take a few minutes to switch to a cheaper price plan.
Discounts are still available
If you’re suffering from some serious switching regret after reading those eye-watering figures, don’t fret!
Right now, discounts of over 20% are available to customers who switch gas and electricity suppliers, and doing so takes no more than a few minutes on our Compare Gas & Electricity page.