Price volatility in the electricity market is having ruinous effects on independent electricity suppliers. So far this year, a dozen have gone under, at a rate that is not far short of one per week. This can be seen in the permanently updated census of electricity retailers kept by the National Markets and Competition Commission (CNMC).
The smaller distributors are falling victim to the tsunami of prices in the electricity market, with historic fluctuations that they have been unable to cope with, unlike the large groups, such as Endesa, Iberdrola and Naturgy.
Last year, 35 marketers fell, and in 2021, 22 disappeared. In total, from January 2021 to date, 69 marketers have been terminated. That is almost one in ten of those registered.
Price fluctuations have been strangling many distributors, who were forced to buy electricity at much higher prices than they had committed to sell it to their customers. Unlike the large electricity companies, the independents do not have the financial capacity to sign long-term supply contracts.
In addition to the larger companies – Iberdrola, Endesa, Naturgy – all kinds of competitors, large, medium and small, have entered the market. Oil companies, such as Repsol and Eni, have created their own marketing companies, which are now very active. Large groups such as El Corte Inglés (Sweno Energía brand) have also entered the business. Telephone operators such as Vodafone and MásMóvil are also now players.
In the CNMC’s total census, 742 marketers are registered. But for the first time, there are more companies deregistering than registering. Compared to the 12 companies that have disappeared so far this year, only six new companies have started up.
