Market Competitive Intensity (MCI): Cyprus
Introduction
Datamonitor's Market Competitive Intensity Index (MCI) is a robust framework for measuring and benchmarking the development of competitiveness and market conditions in a range of gas and electricty markets. The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push and Customer Pull.
Scope
Insight into the current levels of competitiveness in the gas and power markets of the EU 27 and 6 related markets. Analysis of the commercial opportunities and threats in the selected markets both currently and in 2010. A benchmarking of the factors driving competition and market entry in the gas and power sectors of the selected markets.
Highlights
Datamonitor's MCI Index offers a robust framework for measuring the development of utility Market Competitive Intensity. MCI scores are calculated using two different methods. The first, the simple weighted average (additive) measure shows overall competitive intensity. The second, the multipliative method, is more complex. It prevents markets with an overly wide spread of underlying raw scores from exerting undue influence over, or skewing, the final result.
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 competitive intensity in EU 27 and 6 related markets 4
The MCI Index assesses markets as they stood in early 2008 and forecasts conditions likely to be prevailing three years after full market opening 4
Each of the nine pillars has an assessment scale to allow for the comparison of diverse markets (see appendix for more details) 5
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 6
Context: Cyprus's gas and power competitiveness remains modest 7
Cyprus's ranking changes only slightly over the forecast period 7
A gas market will not emerge in Cyprus during the forecast period 7
Power MCI: Cyprus's power market achieves only a modest score 9
Market Framework scores will remain modest in 2010 9
Effectiveness of Regulator [2008: 3/10 2010: 5/10] 9
Ease of Third Party Access [2008: 2/10 2010: 3.5/10] 10
Effectiveness of Balancing and Data Transfer [2008: 2/10 2010: 4/10] 10
EAC monopoly drags the Supplier Push metrics down 10
Wholesale Market Fragmentation [2008: 1/10 2010: 3/10] 10
Retail Market Fragmentation [2008: 3/10 2010: 4/10] 10
Traded Market Maturity [2008: 0/10 2010: 1/10] 10
Customer Pull metrics are very much at the lower end of the scale and are likely to remain so in July 2010 11
Access to Market Information and Assistance [2008: 1.5/10 2010: 2.5/10] 11
Consumer Representation [2008: 0/10 2010: 1/10] 11
Propensity to Switch [2008: 0/10 2010: 1/10] 11
The current market structure means that this metric is redundant until after the end of the derogations.. 11
Gas MCI: Cyprus does not currently have a gas market 12
Cyprus does not currently have a gas market 12
Outlook: Commercial opportunities for new entrants are unlikely to be found in Cyprus 13
Competitive intensity remains very limited in the Cypriot energy sector 13
Power scores 13
Gas scores 13
Commercial opportunity lies in the generation sector 14
New Market Entrant Opportunities, Power 14
Cyprus electricity production is currently dependent on oil fired power plants. Since 2005, EAC began tenders for the construction of gas fired capacity. However, the small size of the market combined with the various barriers to entry will lead potential investors to see Cyprus as a lower priority investment target. 14
New Market Entrant Threats, Power 14
MCI Scores 15
APPENDIX 18
Definitions 18
Ask the analyst 23
List of Tables
Table 1: Market Competitive Intensity, Cyprus 2008-10 15
Table 2: MCI Additive, Europe 2008-2010 16
Table 3: MCI Multiplicative, Europe 2008-2010 17
List of Figures
Figure 1: MCI Assessment Scale 2
Figure 2: MCI Assessment Framework 3
Figure 3: MCI Market Coverage 4
Figure 4: MCI Scales 5
Figure 5: MCI Applications 6
Figure 6: European Power Market Competitive Intensity, 2008-10 7
Figure 7: European Gas Market Competitive Intensity, 2008-10 8
Figure 8: Power Market Competitive Intensity, Cyprus 9
Figure 9: Gas Market Competitive Intensity, Cyprus 12
Figure 10: Market Competitive Intensity, Cyprus 13
Figure 11: Scale for MCI Assessment, Effectiveness of Regulator 18
Figure 12: Scale for MCI Assessment, Ease of Third Party Access 19
Figure 13: Scale for MCI Assessment, Effectiveness of Balancing and Data Transfer 19
Figure 14: Scale for MCI Assessment, Wholesale Market Fragmentation 20
Figure 15: Scale for MCI Assessment, Retail Market Fragmentation 20
Figure 16: Scale for MCI Assessment, Traded Market Maturity 21
Figure 17: Scale for MCI Assessment, Access to Market Information and Assistance 21
Figure 18: Scale for MCI Assessment, Consumer Representation 22
Figure 19: Scale for MCI Assessment, Propensity to Switch 22
