Market Competitive Intensity: Ireland
Introduction
Datamonitor's MCI Index offers a robust framework for measuring the development of utility Market Competitive Intensity. The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; Customer Pull.
Scope
Insight into the current levels of competitiveness in the gas and power markets.Forecasts of future competitive dynamics and their evolution throughout the gas and power value chains.Forecasts of switching rates in the residential and non-residential sectors.Highlights
Datamonitor's MCI Index offers a robust framework for measuring the development of utility Market Competitive Intensity.The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; Customer Pull.Datamonitor's MCI assessments are supported by interviews with over 200 senior utility executives.Reasons to Purchase
Assess the competitive environments of gas and power markets both now and in the future.Gain insight into value chain factors driving market competitiveness and how each individual part of the chain will evolve as competition develops.Screen future market entry plans against the MCI scores to highlight key areas of potential risk and opportunity.
DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Introduction: Datamonitor's MCI Index offers a robust framework for measuring the development of energy Market Competitive Intensity 2
The MCI Index shows how attractive a particular market is to new entrants in terms of the competitive environment 2
The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; Customer Pull. 3
The MCI Index measures the development of 20 diverse European gas and power markets 3
The MCI Index assesses markets in December 2006 and on 1st July 2008 in addition to driving a market switching forecast 4
Each of the nine pillars has an assessment scale to allow for the comparison of diverse markets (see appendix for more details) 4
Two differing overall MCI scores are calculated to ensure full clarity of results 5
A simple weighted average (additive) measure shows overall competitive intensity 5
A weighted multiple (multiplicative) measure shows overall competitive intensity 5
The MCI framework has a number of applications for your organization 5
Context: Whilst both the Irish metrics improve over the forecast period, a particularly strong improvement occurs in the power metric 6
The jump in Ireland's power score over the forecast period gives it a significant leap upwards in the rankings over the forecast period 6
Despite being a small gas market, Ireland achieves a high ranking within the markets surveyed 7
Power MCI: Ireland's power score is driven by the Market Framework and Supplier Push metrics 8
Market Framework metrics generally score highly and are likely to further improve by July 2008 8
Effectiveness of Regulator [2006: 5.6/10 2008: 7.6/10] 8
Ease of Third Party Access [2006: 3.4/10 2008: 7/10] 9
Effectiveness of Balancing and Data Transfer [2006: 5.3/10 2008: 6.7/10] 9
The Supplier Push metrics will continue to be constrained by only modest gains from new entrants and the lack of wholesale power 9
Wholesale Market Fragmentation [2006: 2.8/10 2008: 5.5/10] 9
Retail Market Fragmentation [2006: 3.4/10 2008: 6/10] 9
Traded Market Maturity [2006: 0.3/10 2008: 1.5/10] 9
Customer Pull metrics will remain relatively low by 2008, despite the progress resulting from full market opening in 2005 10
Access to Market Information and Assistance [2006: 2.3/10 2008: 4/10] 10
Consumer Representation [2006: 1.5/10 2008: 3.5/10] 10
Propensity to Switch [2006: 5.8/10 2008: 7/10] 10
Switching activity in the residential sector will continue to be much lower than the non-residential market 10
Gas MCI: A strong Market Framework score serves to offset weakness in some of the other metrics 12
All of the Irish Market Framework factors will be at the upper end of the scale by 2008 12
Effectiveness of Regulator [2006: 6.7/10 2008: 7.8/10] 12
Ease of Third Party Access [2006: 8.5/10 2008: 9/10] 13
Effectiveness of Balancing and Data Transfer [2006: 8.3/10 2008: 8.5/10] 13
The consolidation of new market entrants will increase the scores of the Supplier Push metrics 13
Wholesale Market Fragmentation [2006: 2.5/10 2008: 3/10] 13
Retail Market Fragmentation [2006: 1.4/10 2008: 4.5/10] 13
Traded Market Maturity [2006: 7.7/10 2008: 9/10] 14
Continued switching following full market opening in 2005 will drive the Customer Pull metrics higher in 2008 14
Access to Market Information and Assistance [2006: 4/10 2008: 5.5/10] 14
Consumer Representation [2006: 2.5/10 2008: 3/10] 14
Propensity to Switch [2006: 5.4/10 2008: 5.4/10] 14
The development of competition between now and 2008 will continue to result in increased rates of switching 14
Outlook: The emerging nature of the Irish energy markets and the robust economy create significant potential commercial opportunities 16
In spite of being in its relative infancy, the Irish gas market is at a similar stage of competitiveness to the power market 16
Power scores 16
Gas scores 16
Despite a favourable TPA regime, new entrants will need to ensure they gain access to power and overcome switching lethargy 17
New Market Entrant Opportunities, Power 17
New Market Entrant Threats, Power 17
The issues facing new entrants to the Irish gas market are similar to those facing entrants to the power market 17
New Market Entrant Opportunities, Gas 17
New Market Entrant Threats, Gas 18
MCI Scores 18
APPENDIX 21
Definitions 21
Ask the analyst 26
List of Tables
Table 1: Market Competitive Intensity, Ireland 2006-08 18
Table 2: MCI Additive, Europe 2006-2008 19
Table 3: MCI Multiplicative, Europe 2006-2008 20
List of Figures
Figure 1: MCI Assessment Scale 2
Figure 2: MCI Assessment Framework 3
Figure 3: MCI Market Coverage 3
Figure 4: MCI Scales 4
Figure 5: MCI Applications 5
Figure 6: European Power Market Competitive Intensity, 2006-08 6
Figure 7: European Gas Market Competitive Intensity, 2006-08 7
Figure 8: Power Market Competitive Intensity, Ireland 8
Figure 9: Switching Forecasts, Ireland 2008 [Residential: 15% Non Residential:36%] 11
Figure 10: Gas Market Competitive Intensity, Ireland 12
Figure 11: Switching Forecasts, Ireland 2008 [Residential: 14% Non Residential:4%] 15
Figure 12: Market Competitive Intensity, Ireland 16
Figure 13: Scale for MCI Assessment, Effectiveness of Regulator 21
Figure 14: Scale for MCI Assessment, Ease of Third Party Access 22
Figure 15: Scale for MCI Assessment, Effectiveness of Balancing and Data Transfer 22
Figure 16: Scale for MCI Assessment, Wholesale Market Fragmentation 23
Figure 17: Scale for MCI Assessment, Retail Market Fragmentation 23
Figure 18: Scale for MCI Assessment, Traded Market Maturity 24
Figure 19: Scale for MCI Assessment, Traded Market Maturity 24
Figure 20: Scale for MCI Assessment, Access to Market Information and Assistance 25
Figure 21: Scale for MCI Assessment, Consumer Representation 25
Figure 22: Scale for MCI Assessment, Propensity to Switch 26
