What does the liberalization of the market mean for consumers?

Switching supplier, benefiting from the competition and therefore potentially paying less is possible today for all consumers. Thanks to what? Liberalization!

Index

• Prior to liberalization: monopolies
• Next, a fully evolving market with new rules
• The actors that emerged from liberalization
• The benefits of liberalization for the consumer

In 2003, Flanders opened its energy market to competition. It took until 1 July 2007 for Wallonia and the Brussels-Capital Region to do the same. Now implemented throughout Belgium, liberalization has changed the way the sector works profoundly.

Indeed, each consumer can now enter into a contract with the electricity and gas supplier of their choice. An undeniable advantage but there is always a ‘but’. The downside is that liberalization has also made the system more complex as the number of actors has increased drastically. Weren’t you aware of that? So, now’s the time to remind you of what the market was like before!

Prior to liberalization: monopolies

Prior to liberalization, the electricity market was in the hands of ENGIE (formerly Electrabel) and Luminus, who undertook production, supply and transmission. The local public authorities were responsible for distribution.

The gas market was governed by the company Distrigaz. It was responsible for buying gas, storing it and piping it to the distribution networks. The intercommunal companies then took over to transport it to houses and bill the households for their consumption.

In short, both the distribution and supply and transmission were in a monopoly situation. By liberalizing the market, the European Union imposed the separation of business lines for two reasons: to reduce the price of energy by promoting competition and improving the quality of service offered to consumers. With regard to this latter point, it implemented various measures such as the introduction of independent regulators.