Energy supplier switching fell to a normal level during November after a record-breaking October, ElectraLink analysis shows.
November 2024 saw 265,000 CoS, an 11% increase from November 2023 but 44% less than October this year.
ElectraLink, a central service provider for the energy industry, states that CoS rates spiked in October due, in part, to expected bi-annual contract expiries that occur in large volumes during April and October each year—May this year saw 21% fewer switches than the previous month.
Electralink also cites that households might have been shopping around for deals following the price cap increase as another reason for the increase. Following October’s spike, CoS activity is expected to remain low until spring.
Domestic customers make up the overwhelming majority of switches each month and reached 233,000 in November, 88% of the monthly total. Industrial & commercial (I&C) CoS recorded fewer than 6,000 switches, 2% of the total, and small and medium businesses reached 26,000, 10% of the total.
ElectraLink accounts only for voluntary switches or instances where the customer made an active decision to change supplier, including after a contract expired.
Most supplier switches were between large companies (with a market share of over 5%), reaching 175,000 CoS and accounting for 66% of November’s total. 37,000 customers switched from large to ‘other’ (with a market share below 5%) suppliers, 14% of the total, while changes the other way (from other to large) were 15% of the total, reaching 41,000.
Other to other switches were only 5% of the total, landing at 14,000.
CoS and the energy market
Changes of supplier (CoS) encourage market competition for energy suppliers. While competitive deals in light of high energy prices can encourage consumers to switch, utilities also have to consider creative ways to incentivise consumer-led flexibility.
Earlier this year, Paul Linnane, Electralink’s chief data officer, said: “Whilst the recent increase in switching [in April] highlights that demand for cheaper and innovative tariffs is increasing, I believe that the BAT is still limiting that demand.”
The ban on acquisition-only tariffs (BAT) has been the source of heated debate throughout 2024 after energy regulator Ofgem announced in July that it would extend the BAT for 12 months to last until 31 March.
It was first introduced in April 2022 to protect consumers during the energy crisis that saw 3.2 million people left without electricity.
Although lower tariffs for new customers are not allowed, the focus on consumer-led (or demand side) flexibility in the government’s Clean Power 2030 Action Plan is an opportunity for suppliers.
By utilising clean energy and demand shifting, companies can offer lower bills to customers; Octopus Energy has gone as far as launching a Zero Bills smart tariff that means Octopus customers with low carbon devices, optimised by Octopus technologies, do not have to pay for energy.
The Department for Energy Security and Net Zero (DESNZ) opened dual consultations on changes to the Capacity Market (CM) rules this week to improve how the CM categorises consumer-led flexibility and modernise it to better enable participation and delivery assurance of consumer-led flexibility.
The National Energy System Operator’s (NESO’s) new iteration of the Demand Flexibility Service (DFS) will be compatible with the CM, which households can register for with their energy supplier.
