Biggest Power Providers: Which Companies Have the Largest Market Share?

The New Zealand electricity market may have become more diverse in recent years. However, the larger power companies still collectively command a strong majority customer share. When weighing up retailer offerings, it certainly helps to have an understanding of how the market is structured and how this impacts choice. This will give you a head start in narrowing down which deals are best for your household.

Mercury’s recent acquisition of Trustpower’s retail business has seen a further consolidation at the top end of the market. As we delve into below, the big five have now effectively become the big four. Along these lines, it’s also important to keep in mind that many of the larger retailers also oversee more than one retail brand.

In the following guide, we look at:

• How is the electricity sector structured and, what is a gentailer?
• Biggest power providers by market share
• Which power providers are customers switching to and from?
• Choosing a power provider

How is the electricity sector structured and, what is a gentailer?

It will first help to develop an understanding of how the electricity sector is structured, from harnessing power sources to keeping the lights on at your property. This will allow for greater insight into the position different power companies occupy in the wider market.

Getting power to your property is a process that broadly encompasses four steps: generation, transmission, distribution and retail.

Generation

New Zealand households are primarily powered by renewable energy (hydro, geothermal, wind and, to a lesser extent, solar), which Ministry of Business, Innovation and Employment figures show made up 82.1% of electricity generation last year.

There are five main electricity generators:

• Contact Energy
• Genesis Energy
• Manawa Energy (formerly Trustpower)
• Mercury
• Meridian Energy

Each of these generators oversees a portfolio of assets that are linked to the national grid.

Transmission and distribution

State-owned Transpower is responsible for operating the national grid, transporting electricity to towns and cities throughout the country. Transpower advises that the national grid spans over 12,000km of transmission lines, with more than 170 substations.

Meanwhile, at a local level, electricity distributors (lines companies) transport electricity from the national grid to consumers.

Retail: Which companies are gentailers?

Retail is the final stage in the process of delivering electricity to consumers. According to the Electricity Authority’s Electricity Market Information (EMI) website, there are currently over 30 parent companies operating in the residential electricity sector in New Zealand.

Up until recently, each of the five main generators also sold electricity to consumers via their respective retail arms. However, as advised above, Mercury has acquired Trustpower’s retail business, with four now remaining.

These generators/retailers are known as gentailers:

• Meridian Energy – is New Zealand’s largest renewable electricity generator, with all its electricity coming from renewable sources. It sells electricity through its Meridian and Powershop brands.

• Mercury – generates electricity from 100% renewable sources. It sells electricity through its Mercury, Trustpower and Globug brands.

• Genesis Energy – generates electricity from a portfolio of renewable and thermal generation assets. It sells electricity through its Genesis and Frank Energy retail brands.

• Contact Energy – generates 80-85% of its electricity from renewable sources. It sells electricity through its Contact retail brand.

As we’ll look at below, these gentailers are the top four retailers in the country, collectively dominating when it comes to market share.

Compare electricity providers with Canstar Blue

If you are looking to change electricity providers, or are unsure if you are getting the best deal, Canstar Blue can help. We rate NZ power companies for customer satisfaction and value for money, see the table below for some of the results, or you can click on the button below for the full results of our survey.

Canstar Blue’s latest review of NZ power companies compares them on customer satisfaction. The table below is an abridged version of our full results, available here.

Compare electricity providers for free with Canstar Blue!

Biggest power providers by market share

According to the EMI website, as of August 31 this year, the combined residential electricity market share of the big four gentailers stood at over 82%. Mercury’s purchase of Trustpower’s retail arm notably now sees it with the greatest market share.

Parent company market share is measured by installation control point count (ICP: which the Electricity Authority defines as a physical point of connection on a local or embedded network):

• Mercury – ICP count 525,227 (27.47%).

• Genesis Energy – ICP count 430,871 (22.53%)

• Contact Energy – ICP count 385,748 (20.17%)

• Meridian Energy – ICP count 243,606 (12.74%)

• Nova Energy – ICP count 80,864 (4.23%)

Nova Energy rounds out the top five parent companies as a smaller gentailer. As these figures show, within the top five itself there is a significant drop-off in market share from first through to fifth.

This leaves a touch under an 18% market share distributed among the remaining parent companies. Of course, many of these companies are comparatively new to the market and continue to build their customer numbers.

The next five parent companies collectively account for a 12.18% market share:

• Pulse Energy Alliance – ICP count 77,714 (4.06%)

• Electric Kiwi – ICP count 77,275 (4.04%)

• Vocus – ICP count 44,063 (2.3%)

• Flick Electric – ICP count 22,112 (1.16%)

• Ecotricity – ICP count 11,764 (0.62%)

From here, there is a fairly substantial drop-off in ICP share, with a number of smaller providers battling it out for market territory.

Which power providers are customers switching to and from?

The EMI website also provides insight into customer movements between retailers, revealing which retailers have gained and lost customers over a certain period. Some of the larger retailers, which can potentially cycle through customers at a higher rate, feature here.

The top three retail brands by residential net ICP gains (switching between brands) in the three months to August 31 were:

• Octopus Energy – net ICP gain of 3592 (0.19%)

• Frank Energy – net ICP gain of 2181 (0.11%)

• Genesis Energy – net ICP gain of 1450 (0.08%)

Octopus Energy is a notable leader in this category. The retailer – which also operates in a number of European markets, along with Japan and the US – launched in New Zealand at the beginning of June.

→ Related article: Octopus Energy: A New Deal in NZ Electricity

Conversely, the bottom three (net ICP loss) were:

• Mercury – net ICP loss of 2404 (-0.13%)

• Electric Kiwi – net ICP loss of 2123 (-0.11%)

• Nova Energy – net ICP loss of 2083 (-0.11%)

Mercury may top this list, however as advised above it has the greatest market share (27.48%) by some margin.

Choosing a power provider

There are a range of factors you need to take into account when weighing up your power options, from how you can save via energy efficiency, to which tariff is most suitable for your household. When shopping for a power provider, it is certainly worthwhile delving into your power bills and examining your usage patterns.

Many retailers offer online bill comparison/price estimate services, which can be a handy tool when it comes to comparing different offers. If in doubt, it is also worthwhile getting in touch directly with a retailer.

Further information on power costs can be found here and an overview of the steps involved when it comes to changing providers here.

Compare electricity providers for free with Canstar Blue!

About the author of this page

This report was written by Canstar author Martin Kovacs. Martin is a freelance writer with experience covering the business, consumer technology and utilities sectors. Martin has written about a wide range of topics across both print and digital publications, including the manner in which industry continues to adapt and evolve amid the rollout of new technologies.