Electricity as a Commodity: Liberalisation Outcomes, Market Concentration and Switching Dynamics

We study Portugal’s household electricity retail market after legal liberalisation, quantifying market concentration (Herfindahl–Hirschman Index (HHI) and the four-firm concentration ratio (CR4)), consumer switching, and asymmetric wholesale-to-retail price pass-through. Using monthly data for January 2014–December 2019 (primary sample) and robustness checks for 2008–2022, we compute concentration indices from ERSE supplier shares, analyse switching dynamics, and estimate nonlinear autoregressive distributed lag (NARDL) models that decompose wholesale price changes into positive and negative components. The retail market remains highly concentrated during the primary window (HHI ≈ 6300–6800 using shares expressed as percentages on a 10,000 scale); switching rose after deregulation but stabilised at moderate monthly rates; and long-run pass-through is estimated at β+ ≈ 0.55–0.61 for wholesale increases and β− ≈ 0.49 for decreases (Wald tests reject symmetry at conventional levels). Results are robust to alternative concentration metrics, exclusion of 2022, and varied lag orders. Policy implications emphasise tariff simplification, active consumer-activation measures, and regular monitoring of concentration and pass-through metrics.