What exactly is an "electricity market"?

Posted on March 12, 2021, noon

During the 90's, there were Gameboys, cassette players, and DEKA and Blockbuster stores everywhere you went. Among all of this buzz, the electricity market was going through a comprehensive regulatory reform, and completely changing the way we purchase power.

The purpose of all this was to open the sector up to competition so the "market", or those who compete within the market, would be incentivised to find better, and more efficient ways to produce and supply power to end-consumers.

The increase in competition promotes efficiency, and creates "workable competition" in a market. This drives up incentives on retailers to innovate, and provide greater choice for their consumers. This is why you now get a range of different retailers, offering everything and anything to get your attention and money.

The most recent innovation in the market has been "spot market price plans". These plans effectively pass on the spot price risk of purchasing electricity directly from the wholesale market, onto their customers. And while there may be benefits for some customers who have certain patterns of use, for others, they may be better off sticking to standard pricing plans with fixed prices.

Whether you're residential or starting a business, we can talk through some options to find what's right for you. Contact us now to talk to one of our team.