Big energy companies profit from free market

On of the consequences of the liberalisation of the Dutch energy market is that nationally operating energy companies have come into being. The seven biggest energy companies in 1997 now account for the lion’s share of the energy market.

In the early period of liberalisation (1998-2000) these seven managed to increase their market share from 74 to 88 percent. In 2001, though, this share dropped back slightly, to 85 percent.

Market share of energy companies

Substantial rise in turnover

Total sales of electricity, gas and warm water to end users rose by an average 9 percent a year in the period 1999-2001, mainly pushed up by price increases.

On the regulated market for medium-sized and small users there were price rises for both gas and electricity.

In 2000 and 2001 about 30 percent of the total energy used was sold on the free market.

Profits up sharply

Since the liberalisation process started, the gross profits have shown a noticeable rise. The 34 percent increase in the period 1998-2001 is connected with the increase in total revenues and was mainly on account of the top seven companies.

In 1998 the seven largest energy companies in the Netherlands accounted for 49 percent of total gross profits in the energy sector. By 2001 this had risen to 74 percent. This increase was for a large part the result of company mergers and take-overs.

Energy companies’ profits

Employment decreasing in energy sector

Employment fell sharply in this sector in 1999. After that, the decrease continued, but more slowly. Company mergers and take-overs had a clear effect on employment in this sector.

Employees in the energy sector

Source: Statline

Wilco de Jong