A survey recently conducted in the Nordic countries shows that most household customers know that they can switch electricity supplier. At the same time, the survey shows that many customers are inactive. The main reason for inactivity is often that the saving potential is considered too small.

Below are some of the findings from the web survey conducted in September 2018 among a representative sample of 6,000 Nordic electricity customers; 1,500 respondents from Denmark, Finland, Norway and Sweden. All respondents participate in the decision-making regarding the electricity contract in their household.

The survey shows that 26 per cent of electricity customers have been active and signed an electricity contract in the past year. On top of that, 16 per cent have compared contracts in the past year without switching and are so-called aware customers. 58 per cent have neither switched nor compared contracts in the past year or more, and are, hence, considered ‘inactive’ customers.

The share of active customers is highest in Finland. Norway and Finland have the highest shares of aware customers. The Danish customers are the most inactive ones.

Amongst those that have neither signed nor compared electricity contracts the last year (so-called inactive customers), the most common reasons given for not switching/comparing are satisfaction with current contract and small financial gains.

All in all, Danish customers differ from the other Nordic customers. They use less electricity; have a lower level of activity in the electricity market; have less knowledge both of terms of contracts, the market players and price comparison tools; they also have less confidence in the electricity market. Finnish and Swedish customers are similar when it comes to consumption, activity level and reasons for (not) switching/comparing contracts. Norwegian customers stand out, with a much higher consumption of electricity, compared to others. In addition, Norwegian customers find the switching process somewhat easier than the other customers in the survey.

Active customers spend the least on electricity, have the best knowledge of the electricity market and find it the easiest to switch contracts. In addition, they regularly compare contracts. Inactive customers are characterized not only by rarely switching and comparing contracts, but also by knowing the least about their electricity consumption.  They have the poorest knowledge of the electricity market as such, as well as their own terms of contract, are the ones that read the least of the information on their bill compared to the rest of the respondents and find it most difficult to switch contracts.

When it comes to gender and age differences, these can be summed up as follows. Men are somewhat more active electricity customers than women; they more often compare contracts, initiate new contracts themselves, know more about both the electricity market and their contractual terms, read more of the information on the bill and find the switching process easier. However, compared to men, women deem it more important to have a green contract, and prefer more strongly that they receive a combined bill rather than receiving two separate bills from their grid company and supplier. Younger electricity customers have the poorest knowledge of the electricity market and their own contractual terms, find it more difficult to sign contracts and are the ones that read the least of the information on their bill.

The Nordic energy regulators (NordREG) will now analyze the results of the survey and use it as one of many inputs when the retail markets in the Nordic region are developed further.

For more information please contact:

Mattias Johansson, Retail Market Expert at Energimarknadsinspektionen and Chair of NordREG Retail Market Working Group, +46 16 16 27 42
Søren Brandt Clausen, Forsyningstilsynet,+45 4171 5381
Patrick Malén, Legal Adviser at Energiavirasto, +358 5050 126
Stian Andre Staurvik Skaalbones, Adviser at Norges vassdrags- og energidirektorat, +47  22 95 90 29

Read the main report “Nordic Customer Survey 2018 – Consumer behavior in the Nordic electricity market”.

• Nordic Customer Survey 2018
• Nordic Customer Survey 2018, Annex 1, Total tables report

NordREG would like to invite you to a meeting on the TSOs current practice of calculation of Cross Border Capacities in the Nordic region. The meeting is on the 25th of October 2018 at Stockholm Arlanda airport.

The meeting is arranged by NordREG in cooperation with the Nordic TSOs as an initiative towards a joint Nordic monitoring and increased transparency of cross border capacities by supplementing the existing reporting structures.

• Read more about this initiative in NordREG’s press release here.

Main topics are:

• Current capacity calculation practice, including explanations and justification
• Increased transparency through additional reporting structures of TSOs calculated cross border capacities

NordREG invites stakeholders to present their view on the topic by presenting prepared messages in the introductory part of the meeting and by active participation in discussions.

Stakeholders that would like to present a prepared message are requested to announce that when they sign up for the meeting or at the latest by the 8th of October.

Target group: All interested parties.

When: the 25th of October 2018, 9:30–15:30.

Where: Radisson Blu Sky City Stockholm-Arlanda.

Admission: Free.

Registration: Please sign up for the meeting before October 15 through e-mail internationella@ei.se.

Please state full name, organization and advise us of any dietary requirements you may have.

Program: Agenda 25 October

Presentations

• TSO’s initiatives to increase transparency
• Svenska kraftnät
• Statnett
• Fingrid
• Energinet.dk
• Examples of hourly data and price differences in the Nordics
• Dansk Energi questions for SvK on West Coast Corridor – NordReg workshop 3.0
• Dansk Energi message
• Orsted

At the start of September the NordREG Board met to sign a revised Memorandum of understanding (MoU) and approve a new vision.
The first MoU on the cooperation between the Nordic national energy regulators was signed in 2002 and was last amended in 2006.

On the 4th of September 2018 the director generals of the Nordic NRA’s met in Stockholm to sign a revised MoU.

–  The signing of the MoU is an important step for the current ongoing deepened strategic work within NordREG, says Karin Tvingsjö, chair of NordREG’s Strategy group.

Together with the signing of the MoU a new vision was also approved by NordREG Board. The new NordREG vision is: Actively promoting efficient and advanced energy markets, for the benefit of consumers towards a decarbonized society.

The vision outlines the direction for the Nordic regulatory cooperation. NordREG’s logo has also been updated with the slogan NordREG – Power through cooperation.

This consultation concerns a common request for amendment developed by the Nordic Transmission System Operators regarding the arrangements concerning more than one NEMO in a bidding zone in accordance with Article 45 and 57 of the Commission Regulation (EU) No 2015/1222 of 24 July 2015 establishing a Guideline on Capacity Allocation and Congestion Management (CACM).

The approval of the TSOs request is a task for each individual energy regulator. However, as the Nordic TSOs have developed a common request and the Nordic energy regulators are working closely on this matter, a NordREG consultation will be held.

NordREG welcomes written input on the proposed request for amendment within the 31st of August 2018. Comments (in English) can be sent to registrator@ei.se. Please mark your answers to the consultation with the following reference number 2018-101723.

• Nordic TSOs request for amendment on multiple NEMO arrangements
• Explanatory document concerning the Nordic TSOs’ request for amendments

Contact persons in NordREG

Linda Weman Tell, Ei
linda.weman.tell@ei.se

Malene Alempiew, DUR
mua@forsyningstilsynet.dk

Mari Salo, EV
mari.salo@energiavirasto.fi

Helena Lindstad Mellison, NVE
hem@nve.no

Today NordREG published a report that describes the status of the ongoing implementation of data hubs in the Nordic region. In the first half of the 2021 all Nordic countries will have data hubs in place that handle all communication between suppliers and DSOs.

NordREG believe that a successful implementation of data hubs and the ability for those data hubs to interact is an important key for a harmonised Nordic retail market for electricity.

The Danish data hub is fully implemented. The Norwegian data hub is scheduled to go live in February 2019. According to the national TSOs in Finland and Sweden the Finnish data hub is scheduled to go live in spring 2021 and the Swedish data hub in the beginning of 2021.

• NordREG Status report on datahubs – June 2018

On Wednesday 11^th of April the NordREG network regulation working group organized a workshop on flexibility services.

With the new role of the DSO described in the “Clean Energy for All Europeans” proposal, the DSOs will be requested to utilize the grid smarter in the future. The workshop aimed at sharing possibilities and concerns regarding the flexibility services, focusing on storage of electricity, demand side response and tariff design.

The workshop included presentations by regulators, DSOs, and market participators engaged in flexibility services.

All presentations can be found here:

• Welcome and introduction
• Sweden
• Regulartory experiences tariffs
• Norway
• NODES
• Iceland
• Finland
• DSO own storage
• Denmark
• Demand side flexibility Nordic
• Danish Inteligent Energy Alliance

A prerequisite for well-functioning and integrated electricity markets is the possibility to trade across bidding zone borders. How to make cross-border capacities available and their efficient use are also important objectives of the CACM* Regulation currently under implementation. The Nordic NRAs have monitored available transmission capacity on Nordic interconnectors in bilateral dialogues with each TSO for several years. Beginning in 2018, this work will be further formalized and explored under the NordREG umbrella.

NordREG will investigate how to coordinate more systematically our joint monitoring of available transmission capacity in the region. In this work NordREG will, in addition to our own analysis, rely on a dialogue and involvement from the TSOs and market participants to achieve more insight and knowledge. We appreciate the reporting already provided by the TSOs today and would like to encourage the TSOs to consider how to further increase transparency by making these reports more refined, informative and standardized.

This NordREG initiative is for both short and long-term purposes and will additionally be a helpful tool when we start studying the development of transmission capacities under the coordinated flow-based capacity calculation and the RSC framework. With this initiative NordREG would like to emphasise the importance of TSOs complying with the obligations in the CACM and other relevant legislation with regards to making available transmission capacity for cross-border trade to ensure a well-functioning energy market.

*Guideline on Capacity Allocation and Congestion Management 1222/2015

The “Clean Energy for All Europeans” proposals are intended to help the energy sector to become more stable, more competitive, more sustainable and fit for the 21st century. With a view to stimulating investment in the clean energy transition, the package has three main goals: putting energy efficiency first, achieving global leadership in renewable energies, and providing a fair deal for consumers. To integrate renewables and new loads require innovative solutions and an appropriate regulatory framework.

The distribution system operators (DSOs) have an important role in order to reach the goals in the package. One example is to use flexibility services from distributed energy resources (demand response, local generation, storage and EVs) in order to manage local congestions and solve technical problems (e.g. voltage control, reactive power). Flexibility can be defined as the ability of the electricity system to respond to fluctuations of supply and demand while, at the same time, maintaining system reliability. This can improve efficiencies in operation and development of the distribution network and avoid unnecessary grid expansion.

The workshop aims at sharing possibilities and concerns regarding the use of flexibility services. Will the use of flexibility services challenge the current regulatory framework of the DSOs? What barriers and incentives exist for DSOs to use flexibility services and to implement cost-reflective network tariffs? For Nordic regulators, it is important with input and discussion on how to develop an appropriate regulatory framework.

Target group: All interested parties.

When: April 11th 2018, 10:00 – 16:00. Registration and coffee from 09:30.

Where: Norwegian Water Resources and Energy Directorate (NVE), Middelthuns gate 29, 0368 Oslo.

Admission: Free.

Registration: Please register here by March 27th.
A confirmation email will be sent soon after.

Participation is limited to 50 people and assigned on a first come, first served basis.

• More information and program of the day

According to Article 141(2) of the Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation (SO GL), the Nordic Transmission System Operators (TSOs) shall submit a joint proposal for the determination of the load frequency control blocks (LFC block) to the Nordic national regulatory authorities (NRAs) by 14 January 2018. Load-frequency control block’ or ‘LFC block’ means a part of a synchronous area or an entire synchronous area, physically demarcated by points of measurement at interconnectors to other LFC blocks, consisting of one or more LFC areas, operated by one or more TSOs fulfilling the obligations of load-frequency control.

The Nordic TSOs have not submitted the proposal within the deadline defined in the SO GL. The Nordic NRAs have therefore sent a letter to the TSOs requesting them to submit the proposal as soon as possible.

• Link to the letter
• Link to Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation, SO GL

NordREG has acted as steering group for two studies on demand flexibility. Both studies were financed by Nordic Energy Research.

The first report was written by Pöyry Management Consulting (Norway) AS and the topic of the study is demand side flexibility from a Nordic distribution system operator (DSO) perspective.

The second report was written by Vista Analyse AS. The purpose of this study was to explore available information on demand flexibility and to make an overview of existing barriers for demand flexibility and its potential value in the Nordic market.

Below follows short summaries of the two studies.

Demand side flexibility from a Nordic distribution system operator perspective

The report consists of a concept study and an interview study. The concept study addresses how DSOs can utilise demand response, including models for how it can be realized and a description of various regulatory issues. The interview study consists of interviews with three DSOs in each of the four Nordic countries addressing: the status of demand response among the selected DSOs; the potential value of flexibility; major barriers to realizing flexibility; and their plans related to demand response.

The report presents numerous household activities which could provide valuable flexibility resources to DSOs, and describes how the DSOs can benefit from increased flexibility among their customers.

Based on a literature study, the report concludes that the most important potential of demand side response for DSOs is related to reduced grid investments. Flexibility can furthermore improve grid optimization, reduce network losses and improve quality of supply.

One of the main possibilities for DSOs to incentivize demand response, raised in the report, is through the design and implementation of cost reflective network tariffs. Tariffs which reflect the costs in the network, either time-differentiated or power-based, are emphasized as crucial for DSOs to enable demand response. The report also raises a need to assess how current regulatory regimes incentivize or hinder DSOs to encourage demand response among their customers.

Flexible demand for electricity and power: Barriers and opportunities

The report presents estimates of the amounts of flexibility in Nordic countries, examples of studies regarding costs and benefits of flexibility, previous studies on end-users’ behavior to price variation and potential sources for flexibility. The literature review shows that the potential is higher in the residential sector than in industry, and solutions in the residential sector may play a role in the balancing markets as well as the retail market. Especially residential space heating plays a significant role.

The report lists the existing barriers as follows: Real-time pricing and metering, aggregation services, ICT and automation services, shorter settlement period and lower minimum bid size.

Real-time pricing and metering is the one feature that the development of flexibility hinges on. The core message from the report is that a market for aggregator services will not thrive unless there is an underlying real-time price structure with metering. ICT and automation services are of limited use unless one has retail real-time pricing or aggregator services that respond to real-time pricing.

The consultant has evaluated that demand flexibility has significant potential in Nordics. Customers can get benefits both in electricity markets and in network services.

General

The consultants propose to strengthen efficient price signals from the energy market and network costs. In addition, DSO and TSO regulation need to be evaluated and the models of aggregation should be made clear.

NordREG will continue its work evaluating the proposals and fostering demand flexibility. NordREG will for example exploit the reports in 2018 while evaluating the development of network tariff design and network regulatory regimes.

• See the bulletin on the Nordic Energy Research website.

Direct links to reports:

• Flexible demand for electricity and power: Barriers and opportunities
• Demand side flexibility in the Nordic electricity market: From a Distribution System Operator Perspective