According to study, “Electricals Retailing In Denmark, Market Shares, Summary And Forecasts To 2022” some of the major layers that are working in the electrical retailing in Denmark are Fotex, CBC, Power, Punkt1, Expert, Hvidt& Frit, Euronics, Bilka, Elgiganten, Amazon. The electrical retail market is compromised by the sales of communication equipment, household appliances. The retail market is facilitated by consumer electronics products as they have offered convenience and connectivity, such as wireless products, and wearable and novelty products at a reasonable price.
In Denmark, all electricity consumers have the freedom to choose their electricity supplier. The use of the electricity network is not part of the free market. The electricity infrastructure is a natural monopoly, both on the local and the national. Customers are connected to the electricity network of the respective owning and operating company and thus use the services of a monopolist without being able to choose an alternative. The liberalization of the Danish electricity market is significantly influenced by European developments and the target to develop an internal energy market in Europe. This has also developed due to liberalization in the other Nordic countries. Although the wholesale electricity market in the Nordic region is very much integrated, the retail markets remain to a large extend nationally.
In Denmark, there is currently no obligation to a single point contact, so in many cases, customers are exposed to dual billing: A bill from the network company and another bill from the supplier. Household customers in Denmark pay a comparatively high price for electricity. The retail tariff can be divided into six broad categories as the supply tariff accrues from the production cost of electricity (or cost of energy) and related services. The distribution grid tariff accrues from providing access and services in the distribution network on medium and low voltage levels. The transmission grid tariff accrues from providing access and services in the transmission network on high voltage levels, as well as from ancillary services. The PSO element relates to payments under the Public Service Obligation Act, amongst others for the support of renewable energies and decentral production. The electricity taxes have to be paid to the state and relate to a range of electricity specific taxes. The Value added tax is imposed on all other elements of the price including the PSO element and electricity taxes at the usual rate of 25%.
The electricity suppliers can design commercial products in different ways. In Denmark, there are currently a number of different products on the market which can be analyzed as variable or fixed price, contract duration, relationship supply/ contract charge, green products, and additional services. Moreover, the tariffs obligation supply companies offer under the obligation supply product are regulated. This regulated price system has until recently been applicable to the majority of residential electricity customers in Denmark.
The electrical retail market is forecasted to grow primarily due to factors driving growth in the market include: time-tight schedule of consumers, increase in demand of advance retail power, advanced technology, improving labor market & inflationary conditions, steadily growing economy and favorable demography and others. In upcoming years, the electrical retail environment is expected to bright and optimistic sales is registered Kr30.6 billion in 2017 and are projected to register a steady CAGR of 3.2% during 2017-2022 and by 2022 it is expected to reach Kr 35.8 billion.
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Ankur Gupta, Head Marketing & Communications