The top 50 in 2021: DiXi Group presents the second issue of the Electricity Suppliers’ Ranking
On 24 November, DiXi Group released this year’s final issue of the Electricity Suppliers’ Ranking.
This issue is the Ranking’s second release in 2021, and therefore, it allows to analyse the results, evaluate the progress and trends compared to the previous issue. The rankings are compiled every six months within the framework of USAID’s Energy Sector Transparency project.
“USAID supports DiXi Group’s efforts striving for a competitive energy market. Regular data updates are an important result of collaboration under the Energy Sector Transparency project. An open and transparent competition must bring about fair prices and better service quality for consumers,” Christopher Abrams, Director of the Office of Economic Growth at USAID Ukraine, said during the presentation of analysis results. “However, considering Ukraine’s ambitions of achieving full integration into the EU’s electricity market, a lot still needs to be done. Ukrainian consumers must become true market participants; they must be able to change suppliers and have powerful instruments for effective protection of their rights. We maintain that the Ranking is becoming a stable tool and measure in Ukraine. We encourage market participants – energy suppliers, consumers, and regulator – to analyse its key conclusions and accommodate them in their work and when making business decisions.”
DiXi Group regards the Ranking as its contribution to the promotion of competition and transparency in the electricity market. It helps companies become better than their competitors, and allows consumers to receive services of better quality and more information from electricity suppliers.
“Considering that companies pay close attention to the Ranking, it does perform its role. Consumers will be able to receive services of better quality,” DiXi Group President Olena Pavlenko said during her speech. “We compile the Ranking independently and without any outside influence. Our task is to be as objective as possible.”
How did the companies’ scores change since November of last year?
An analysis by DiXi Group proves that the retail electricity market is yet to come of age. The average score of suppliers has significantly increased, and the degree of their sophistication continues to level out.
“Suppliers are gradually improving their market practices. The average score of companies has risen by 18%. We also see the accelerating growth rate. This progress indicates that companies are developing their competencies of competing for customers. We saw that back at the data-gathering stage. Another conclusion is this: a gradual approximation of companies to each other continues, and the gap between them is narrowing,” DiXi Group expert Bohdan Serebrennikov said during the online presentation.
Compared to the Ranking’s previous issue, the average score of the top 50 companies went up from 0.359 to 0.422 (+18%), which demonstrates visible progress and improvement of the suppliers’ market practices. In addition, the sample is becoming more homogeneous, which indicates the trend toward a gradual reduction of gaps between suppliers.
The grouping of suppliers has changed as a result of migration from the “hidden reserves” group to the “middle performers”. Substantial progress was demonstrated by all groups of companies. Like in the Ranking’s previous issue, only three suppliers made it to the “top performers” group, while the number of “middle performers” has significantly increased, from 27 to 38, after 11 companies migrated in there from the “hidden reserves” group, where the number of companies has declined from 20 to 9. Amid the significant growth of the average score achieved by the top 50 companies in the sample (+18%), the degree of sophistication has risen the most visibly in the “hidden reserves” group. A significant gap between the “leaders” and “middle performers” groups can still be observed, but nevertheless, it is gradually narrowing: the average score of the “leaders” is 83% higher than that of the “middle performers”, and the score of the bottom-placed company in the “leaders” group (0.792) is 23% higher than the score of the top-ranked company in the “middle performers” group (0.644). In the Ranking’s previous issue, the gaps for both these indicators were wider: 85% and 33%, respectively.
The suppliers demonstrated multidirectional development dynamics and visible changes in their rankings. The biggest “surges” were shown by: Odesa Regional Energy Company LLC (+28 ranks), Cherkasyenergozbut LLC (+13), Energo Zbut Trans LLC (+12), Zakarpattiaenergozbut LLC (+9), Ternopilelektropostach LLC (+7).
The higher ranking of suppliers is associated with the greater sales turnover and the greater share of the retail market. Overall, the quite high figure of the Pearson correlation coefficient (0.77) indicates a close correlation between the supplier’s total score and electricity sales volume. This pattern should stimulate companies to continuously increase their competitive advantages by improving their online services and creating flexible, customer-oriented commercial offers, improve business transparency and scaling by going beyond the boundaries of their traditional geography or the particular customer category onto a nationwide level. These strategies are already being partially implemented by mergers of suppliers into groups operating under a common brand.
Companies can achieve substantial progress in the Ranking, if they are prepared to continue increasing their transparency, introduce modern formats of online service, create a broader range of commercial offers, and offer additional services that create greater value of a supplier for consumers, DiXi Group expert Bohdan Serebrennikov says.
The presentation was organised within the USAID Energy Sector Transparency project implemented by DiXi Group NGO. Publication of the Electricity Suppliers’ Ranking became possible thanks to the support of the American people, provided through the United States Agency for International Development (USAID).
Source: DiXi Group