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UTILITY WEEK | 10TH - 16TH MARCH 2017 | 27 Customers " " "The regulator must acknowledge that a reduction in switching, if done for the right reasons, is actually a positive sign of a successful, sustainable and competitive market, not a sign of failure" RYAN THOMSON, PARTNER, BARINGA "With ever increasing numbers of consumers switching, it's clear competition is working for more and more households" LAWRENCE SLADE, CHIEF EXECUTIVE, ENERGY UK "While [switching] figures show good progress, the market is not as competitive as we would like" DERMOT NOLAN, CHIEF EXECUTIVE, OFGEM "It is good that more and more customers are switching, but there are still millions of people stuck on a standard variable tariff and who are often paying hundreds of pounds more for the same gas and electricity" GILLIAN GUY, CHIEF EXECUTIVE, CITIZENS ADVICE successful, sustainable and competitive mar- ket, not a sign of failure," insists Thomson. Discussion at a recent smart metering conference in London suggests that a recali- brated outlook on switching may be needed sooner rather than later. Speakers and dele- gates pointed out that, for reasons good and bad, the national smart meter rollout may suppress switching levels. On the side of the optimists, Oliver Sin- clair, head of consumer advocacy for smart metering at the Department for Business, Energy and Industrial Strategy, said all sup- pliers who have deployed smart meters have seen net promoter scores from those custom- ers increase – a sure sign of improved satis- faction and loyalty that will logically lead to less switching. Meanwhile, a more pessimistic delegate raised concerns about the stunting effect that early iteration smart meters might have on switching rates to smaller suppliers. He warned that customers with SMETS1 meters may be discouraged from switching to the market's cheapest deals – oen offered by smaller suppliers who cannot yet support smart meters – when they discover their new technology has interoperability limitations. It is always tough to draw robust conclu- sions about the many facets of human behav- iour based on impersonal statistical evidence, so it is no surprise that there is an array of opinion and interpretation around what switching can tell us about energy retail. This doesn't mean that switching levels are an irrelevance. But the influence they have assumed in discussions around mar- ket competitiveness is oen unhelpful and counterintuitive. Fundamentally, a growing school of thought argues that it reflects an overwhelm- ing lack of vision at a policy level around what a good energy supply market really ought to look like. 7.7 million number of switching events in 2016 28% the margin by which switching increased last year, compared with 2015 47% the proportion of switches that saw customers move to small or medium-sized energy suppliers £230 the amount Ofgem says consumers can save by switching from the most expensive deals on the market, to the cheapest OFGEM SWITCHING FIGURES Source: Utility Week/Harris Interactive Frequency of switching percentage of switchers Gas Electricity Dual fuel 100 90 80 70 60 50 40 30 20 10 0 n Switched for the first time n Had switched once before n Had switched twice before n Had switched three times before n Cannot remember 3% 6% 24% 58% 9% 4% 9% 24% 50% 14% 6% 16% 26% 31% 20% n One of the big six n Small/medium-sized supplier n Don't know Who are they switching to? percentage of switchers Gas Electricity Dual fuel 100 90 80 70 60 50 40 30 20 10 0 4% 22% 74% 80% 17% 77% 19% 3% 3%