Market Competitive Intensity: Belgium

Table of Contents

• CATALYST
• SUMMARY
• ANALYSIS
  • Introduction: MCI Index offers a robust framework for measuring the development of energy Market Competitive Intensity
    • The MCI Index shows how attractive a particular market is to new entrants in terms of the competitive environment
    • The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; Customer Pull.
    • The MCI Index measures the development of 20 diverse European gas and power markets
    • The MCI Index assesses markets in December 2006 and on 1st July 2008 in addition to driving a market switching forecast
    • Each of the nine pillars has an assessment scale to allow for the comparison of diverse markets (see appendix for more details)
    • Two differing overall MCI scores are calculated to ensure full clarity of results
      • A simple weighted average (additive) measure shows overall competitive intensity
      • A weighted multiple (multiplicative) measure shows overall competitive intensity
    • The MCI framework has a number of applications for your organization
  • Context: The maturity of the Belgian gas and power markets puts it ahead of the majority of European markets
    • The Belgian power market shows development across all metrics over the forecast period
    • In common with the power market, Belgium' s gas metric' s all show improvement during the forecast period
  • Power MCI: The Belgium power market has a strong Market Framework but weak Supplier Push and Customer Pull components
    • All of the Belgian Market Framework factors score at the upper end of the metrics scale
      • Effectiveness of Regulator [2006: 6/10 2008: 6.5/10]
      • Ease of Third Party Access [2006: 8/10 2008: 8.5/10]
      • Effectiveness of Balancing and Data Transfer [2006: 6/10 2008: 7/10]
    • The creation of a Belgian power exchange drives the Supplier Push factors higher in 2008
      • Wholesale Market Fragmentation [2006: 1.5/10 2008: 3/10]
      • Retail Market Fragmentation [2006: 3/10 2008: 4/10]
      • Traded Market Maturity [2006: 1.5/10 2008: 3/10]
    • All of the Customer Pull metrics will remain at the lower end of the scale in 2008
      • Access to Market Information and Assistance [2006: 2/10 2008: 5/10]
      • Consumer Representation [2006: 4.5/10 2008: 5/10]
      • Propensity to Switch [2006: 2/10 2008: 3/10]
    • Belgium' s forecast power switching rates will remain high compared to other less mature markets
  • Gas MCI: The Belgium gas market has strong Supplier Push and Customer Pull components but is restricted by the Market Framework
    • With a relatively strong regulator and favourable pipeline regimes, Belgium scores highly on the Market Framework metrics
      • Effectiveness of Regulator [2006: 6.2/10 2008: 6.7/10]
      • Ease of Third Party Access [2006: 7/10 2008: 7.5/10]
      • Effectiveness of Balancing and Data Transfer [2006: 7/10 2008: 7.5/10]
    • The existence of a reasonably well established and liquid wholesale market is the main element of the Supplier Push metric
      • Wholesale Market Fragmentation [2006: 2/10 2008: 2.5/10]
      • Retail Market Fragmentation [2006: 3/10 2008: 4.5/10]
      • Traded Market Maturity [2006: 10/10 2008: 10/10]
    • Belgium' s Customer Pull metrics all show little increase between now and 2008
      • Access to Market Information and Assistance [2006: 3/10 2008: 4/10]
      • Consumer Representation [2006: 2/10 2008: 2.5/10]
      • Propensity to Switch [2006: 2/10 2008: 3/10]
    • The switching progress forecast in the non-residential market will not be matched by progress in the residential market
  • Outlook: Competitive intensity is likely to remain limited in the short term
    • The less well established nature of the power market compared to the gas market drives a greater increase in score
      • Power scores
      • Gas scores
    • The emergence of the Belpex wholesale market will help new entrants capitalise on opportunities in the Belgian power market
      • New Market Entrant Opportunities, Power
      • New Market Entrant Threats, Power
    • The key threat facing new entrants to the Belgian gas market comes from the presence of existing players
      • New Market Entrant Opportunities, Gas
      • New Market Entrant Threats, Gas
  • MCI Scores
• APPENDIX
  • Definitions
  • Ask the analyst
  • List of Tables
    • Table 1: Market Competitive Intensity, Belgium 2006-08
    • Table 2: MCI Additive, Europe 2006-2008
    • Table 3: MCI Multiplicative, Europe 2006-2008
  • List of Figures
    • Figure 1: MCI Assessment Scale
    • Figure 2: MCI Assessment Framework
    • Figure 3: MCI Market Coverage
    • Figure 4: MCI Scales
    • Figure 5: MCI Applications
    • Figure 6: European Power Market Competitive Intensity, 2006-08
    • Figure 7: European Gas Market Competitive Intensity, 2006-08
    • Figure 8: Power Market Competitive Intensity Index, Belgium
    • Figure 9: Switching Forecasts, Belgium 2008 [Residential: 24% Non Residential:33%]
    • Figure 10: Gas Market Competitive Intensity, Belgium
    • Figure 11: Switching Forecasts, Belgium 2008 [Residential: 2% Non Residential:41%]
    • Figure 12: Market Competitive Intensity, Belgium
    • Figure 13: Scale for MCI Assessment, Effectiveness of Regulator
    • Figure 14: Scale for MCI Assessment, Ease of Third Party Access
    • Figure 15: Scale for MCI Assessment, Effectiveness of Balancing and Data Transfer
    • Figure 16: Scale for MCI Assessment, Wholesale Market Fragmentation
    • Figure 17: Scale for MCI Assessment, Retail Market Fragmentation
    • Figure 18: Scale for MCI Assessment, Traded Market Maturity
    • Figure 19: Scale for MCI Assessment, Traded Market Maturity
    • Figure 20: Scale for MCI Assessment, Access to Market Information and Assistance
    • Figure 21: Scale for MCI Assessment, Consumer Representation
    • Figure 22: Scale for MCI Assessment, Propensity to Switch