[Report] Market Competitive Intensity: Croatia TOC

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: Both Croatia' s gas and power markets have only very minor levels of competitive intensity
  - Although only a minor improvement in Croatia' s power metrics occurs over the forecast period, the improvement is sufficient to move it up one place in the rankings
  - Croatia' s gas market competitive intensity leads that of other markets in the region at similar stages of economic development
- Power MCI: Croatia' s Supplier Push metrics show particular weakness
  - None of the Market Framework metrics shows significant improvement over the forecasting period
    - Effectiveness of Regulator [2006: 3/10 2008: 5/10]
    - Ease of Third Party Access [2006: 2/10 2008: 2.5/10]
    - Effectiveness of Balancing and Data Transfer [2006: 2.5/10 2008: 3/10]
  - The limited impact of possible new entrants to the non-residential market is the only factor increasing Supplier Push metrics by 2008
    - Wholesale Market Fragmentation [2006: 0/10 2008: 0/10]
    - Retail Market Fragmentation [2006: 0/10 2008: 1/10]
    - Traded Market Maturity [2006: 0/10 2008: 0/10]
  - Croatia' s Customer Pull metrics will develop even more slowly than the gas metrics given the slower pace of market opening
    - Access to Market Information and Assistance [2006: 1/10 2008: 2/10]
    - Consumer Representation [2006: 0/10 2008: 2/10]
    - Propensity to Switch [2006: 1/10 2008: 3/10]
  - Despite being modest, Croatia' s switching forecasts exceed those seen in some markets at more advanced stages of economic development
- Gas MCI: Croatia' s gas score grows over a number of metrics though the multiplicative score remains at zero due to the lack of traded market
  - Full market opening later in 2006 will help give momentum to the 2008 Market Framework metrics
    - Effectiveness of Regulator [2006: 6/10 2008: 7.5/10]
    - Ease of Third Party Access [2006: 4/10 2008: 6/10]
    - Effectiveness of Balancing and Data Transfer [2006: 4/10 2008: 6/10]
  - The absence of a traded market combined with the lack of wholesale and retail fragmentation significantly constrains the Supplier Push metrics
    - Wholesale Market Fragmentation [2006: 2/10 2008: 2.5/10]
    - Retail Market Fragmentation [2006: 2/10 2008: 4/10]
    - Traded Market Maturity [2006: 0/10 2008: 0/10]
  - Customer Pull metrics will be given renewed impetus later in 2006 when the market becomes fully open
    - Access to Market Information and Assistance [2006: 2/10 2008: 4/10]
    - Consumer Representation [2006: 1/10 2008: 3/10]
    - Propensity to Switch [2006: 2/10 2008: 5/10]
  - Croatia' s switching rates will be modest, but above those seen in more developed markets elsewhere
- Outlook: A lack of competitive intensity creates very few tangible commercial opportunities for players seeking to enter the Croatian market
  - Despite improvements in all the metrics over the forecast period, both the gas and power multiplicative scores remain at zero
    - Power scores
    - Gas scores
  - By 2008 competitive intensity in the Croatian power market will have shown only marginal improvement
    - New Market Entrant Opportunities, Power
    - New Market Entrant Threats, Power
  - The pro-competition regulator on its own will be insufficient to overcome the other factors holding back competitive intensity
    - 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, Croatia 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, Croatia
  - Figure 9: Switching Forecasts, Croatia 2008 [Residential: 07% Non Residential:19%]
  - Figure 10: Gas Market Competitive Intensity, Croatia
  - Figure 11: Switching Forecasts, Croatia 2008 [Residential: 11% Non Residential:18%]
  - Figure 12: Market Competitive Intensity, Croatia
  - 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

Market Competitive Intensity: Croatia

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