The combined effect of regulators’ and retailers’ actions to stimulate consumer participation in retail energy markets

Hester M. Huisman, Evert de Haan, Machiel Mulder and Jaap E. Wieringa

Energy Policy, 2024, vol. 184, issue C

Abstract: Active consumer participation in retail markets is crucial for an affordable and sustainable energy transition. While energy regulators encourage active consumer participation through policies which decrease consumers’ switching costs, energy retailers seek to advance customer retention to boost profits. This study investigates how these seemingly opposing goals influence consumer participation in energy retail markets. Using data on the Dutch energy markets, we combine micro-economic and marketing insights through a retailer-aggregated panel vector auto-regression (VAR) model and a market-level VAR to analyse the dynamic interactions. The results indicate that the regulator affects consumer participation both directly and indirectly through energy retailers’ actions. We conclude that energy retailers’ acquisition and retention actions do not counteract the regulator’s efforts to increase active consumer participation. While retention actions lead to decreased switching behaviour, they concurrently decrease perceived switch costs while increasing search behaviour and the consideration to switch. Therefore, retention actions may still improve consumer welfare. Our research reveals mediating relations that require comprehensive examination of the overall impacts of regulatory policies and energy retailer’s actions.

Keywords: Energy transition; Consumer participation; Switching costs; Regulation of retail markets; Energy retailers (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421523004755
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:184:y:2024:i:c:s0301421523004755

DOI: 10.1016/j.enpol.2023.113890

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().