Market Competitive Intensity (MCI): Denmark

Market Competitive Intensity (MCI): Denmark

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 the 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: Denmark's upstream gas and access to the Nord Pool are key to its strong competitive intensity 7
Denmark leads Europe in terms of power market competitive intensity 7
Strong Market Framework factors help Denmark maintain a position towards the top of the MCI gas rankings 7
Power MCI: Denmark's power score is only tempered by the relatively low Propensity to Switch metric 9
The maturity of the Danish power market helps create relatively strong Market Framework scores 9
Effectiveness of Regulator [2008: 7/10 2010: 7/10] 9
Ease of Third Party Access [2008: 10/10 2010: 10/10] 10
Effectiveness of Balancing and Data Transfer [2008: 7/10 2010: 8/10] 10
All of Denmark's Supplier Push metrics score at the upper end of the scale 10
Wholesale Market Fragmentation [2008: 7/10 2010: 8/10] 10
Retail Market Fragmentation [2008: 8/10 2010: 8/10] 10
Traded Market Maturity [2008: 10/10 2010: 10/10] 10
Customer Pull metrics are constrained by the low switching propensity 11
Access to Market Information and Assistance [2008: 7.5/10 2010: 8/10] 11
Consumer Representation [2008: 6/10 2010: 7/10] 11
Propensity to Switch [2008: 3.5/10 2010: 4/10] 11
Gas MCI: Denmark's gas scores are driven by strong market framework factors 12
All of Denmark's Market Framework metrics score at the upper end of the scale 12
Effectiveness of Regulator [2008: 8/10 2010: 8.5/10] 12
Ease of Third Party Access [2008: 10/10 2010: 10/10] 13
Effectiveness of Balancing and Data Transfer [2008: 9/10 2010: 9/10] 13
Denmark's Supplier Push metrics are constrained by the lack of fragmentation in both the wholesale and retail arenas 13
Wholesale Market Fragmentation [2008: 2.5/10 2010: 3.5/10] 13
Retail Market Fragmentation [2008: 3.5/10 2010: 5/10] 13
Traded Market Maturity [2008: 3.5/10 2010: 6/10] 13
All of Denmark's Customer Pull metrics remain modest 14
Access to Market Information and Assistance [2008: 4.5/10 2010: 6.5/10] 14
Consumer Representation [2008: 4.5/10 2010: 5/10] 14
Propensity to Switch [2008: 2/10 2010: 3.5/10] 14
Outlook: Commercial opportunities exist, though overcoming the threat posed by existing players is a significant challenge 15
Competitive intensity in the Danish gas market will continue to lag behind that seen in the electricity market 15
Power scores 15
Gas scores 16
Denmark achieves the highest power market competitive intensity score of the markets surveyed 16
New Market Entrant Opportunities, Power 16
New Market Entrant Threats, Power 16
Commercial opportunities in the Danish gas sector will continue to trail those in the electricity market 16
New Market Entrant Opportunities, Gas 16
New Market Entrant Threats, Gas 17
MCI Scores 18
APPENDIX 22
Definitions 22
Ask the analyst 27
List of Tables
Table 1: Market Competitive Intensity, Denmark 2008-10 18
Table 2: MCI Additive, Europe 2008-2010 19
Table 3: MCI Multiplicative, Europe 2008-2010 20
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, Denmark 9
Figure 9: Gas Market Competitive Intensity, Denmark 12
Figure 10: Market Competitive Intensity, Denmark 15
Figure 11: Scale for MCI Assessment, Effectiveness of Regulator 22
Figure 12: Scale for MCI Assessment, Ease of Third Party Access 23
Figure 13: Scale for MCI Assessment, Effectiveness of Balancing and Data Transfer 23
Figure 14: Scale for MCI Assessment, Wholesale Market Fragmentation 24
Figure 15: Scale for MCI Assessment, Retail Market Fragmentation 24
Figure 16: Scale for MCI Assessment, Traded Market Maturity 25
Figure 17: Scale for MCI Assessment, Access to Market Information and Assistance 25
Figure 18: Scale for MCI Assessment, Consumer Representation 26
Figure 19: Scale for MCI Assessment, Propensity to Switch 26