Electricity and gas are indispensable resources for the Austrian economy and everyday life in Austria. Without these energy sources, everyday life as we know it would not be possible. As various crises have developed over the past few years, these markets have come under the spotlight due to strong price hikes. The AFCA and E-Control therefore joined forces to investigate these developments. This is essential to ensure proper competition within the domestic economy and also for consumers in Austria. The task force looked into these markets in great detail (see first interim report of 27 June 2023). The second interim report provides additional findings.
“The Energy Task Force has continued to work hard on its investigation into the electricity and gas markets since publishing its first interim report. We are now happy to present our additional findings. They cover procurement strategies and pricing, the effects of the government’s energy subsidy, company offers and customer switching behaviour, as well as developments in market concentration,” explains Natalie Harsdorf, Director General of the AFCA.
“While wholesale prices have been falling for nearly 18 months now, the Task Force found that large energy suppliers, which make up almost 80% of the market in Austria, pass on these price cuts to consumers at very different speeds. This applies to the prices charged to both households and small businesses,” criticises Wolfgang Urbantschitsch, Executive Director of E-Control.
Results of the interim report
During its investigation, the AFCA sent requests for information to 15 provincial energy suppliers and public utilities, as well as to players in the gas market. These requests for information focused on the developments in market concentration and prices in the gas and electricity sector.
Questions were asked about the following topics:
- Pricing structure of tariffs
- Price differentiation
- Beneficiaries of the energy subsidy law
- Calculation of electricity and gas prices for end consumers
- Procurement strategies for the purchase of electricity.
The investigations yielded the following findings:
- The number of electricity and gas suppliers is falling, while the level of market concentration in the network areas for gas and electricity is very high
- Many electricity suppliers are predominantly only represented in their own network area
- The procurement strategies in the electricity market do not vary much across Austria
- Some extreme developments were found in relation to end consumers with indexed electricity and gas prices
- Certain customer groups do not tend to switch tariff, despite strong economic incentives
- Energy companies pursue the strategy of offering more favourable second brands (under a different name and market presence) to retain those customers who are willing to switch tariffs, while inactive customers stick with their old, familiar contracts.
Legal developments
Based on the AFCA and E-Control findings in relation to restricted competition in the electricity and gas markets, a Federal Act to mitigate the consequences of the crisis and improve market conditions in the case of dominant energy suppliers was adopted in June 2024. Additional proposals for stricter provisions in competition law have not been acted upon so far.
Comments possible
Comments on this interim report may be emailed to taskforce.wettbewerb[at]e-control.at.
Legal basis for market inquiries
The AFCA carries out investigations as part of the Energy Task Force within the statutory scope of a sector inquiry. A general inquiry into a business sector is conducted if circumstances suggest that competition is restricted or distorted in that business sector. A sector inquiry is not targeted at a single company.
second interim report on electricity and gas markets (in German)