[Report] Market Competitive Intensity: France 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: A lack of political willingness to embrace market opening has lead to France' s gas and power metrics remaining relatively weak
  - France' s power market competitive intensity is the lowest of Europe' s developed economies
  - In common with its position power, France' s gas competitive intensity lags behind that of economies at similar stages of economic development
- Power MCI: France' s Supplier Push metrics show particular weakness, though will be driven forward by an increase in Powernext liquidity
  - Increased pro-action and momentum from the Regulator are likely to drive the Market Framework metrics higher by July 2008
    - Effectiveness of Regulator [2006: 5/10 2008: 6/10]
    - Ease of Third Party Access [2006: 4.5/10 2008: 6/10]
    - Effectiveness of Balancing and Data Transfer [2006: 4.5/10 2008: 6.5/10]
  - Growth in the Supplier Push metrics will be mainly driven by reduced retail fragmentation between now and 2008
    - Wholesale Market Fragmentation [2006: 1/10 2008: 3/10]
    - Retail Market Fragmentation [2006: 1.5/10 2008: 2/10]
    - Traded Market Maturity [2006: 2.5/10 2008: 6/10]
  - Only one of the Customer Pull metrics scores highly by July 2008
    - Access to Market Information and Assistance [2006: 5.5/10 2008: 7/10]
    - Consumer Representation [2006: 2/10 2008: 4/10]
    - Propensity to Switch [2006: 2/10 2008: 3/10]
  - Residential switching will only be at modest levels by 2008, though non-residential switching will continue to develop
- Gas MCI: A minor fillip in the Market Framework factors is the only element supporting the French gas metrics
  - Regulatory effectiveness is the key driver of the Market Framework scores
    - Effectiveness of Regulator [2006: 4/10 2008: 4.5/10]
    - Ease of Third Party Access [2006: 5/10 2008: 5.5/10]
    - Effectiveness of Balancing and Data Transfer [2006: 5.3/10 2008: 6.3/10]
  - Supplier Push factors in France are influenced by the reduction in wholesale fragmentation expected by 2008
    - Wholesale Market Fragmentation [2006: 1.7/10 2008: 3.3/10]
    - Retail Market Fragmentation [2006: 2.5/10 2008: 3.7/10]
    - Traded Market Maturity [2006: 2.7/10 2008: 3.8/10]
  - Customer Pull metrics all score low marks both now and in 2008
    - Access to Market Information and Assistance [2006: 2/10 2008: 2.2/10]
    - Consumer Representation [2006: 3.3/10 2008: 3.7/10]
    - Propensity to Switch [2006: 2/10 2008: 3/10]
  - Switching rates in both the non-residential and residential sectors are likely to be lower than in other markets
- Outlook: Exploiting commercial opportunities in France will be heavily influenced by a need to mitigate the role of established players
  - France' s current levels of competitive intensity are low, though some degree of improvement can be expected
    - Power scores
    - Gas scores
  - The dominance and formidable challenge represented by EDF means that new entrants need to aggressively build market share at the lowest possible cost
    - New Market Entrant Opportunities, Power
    - New Market Entrant Threats, Power
  - New gas market entrants will need to overcome a series of threats in the short term, though by 2008 significant commercial opportunities will exist, particularly in the south of the country
    - 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, France 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, France
  - Figure 9: Switching Forecasts, France 2008 [Residential: 08% Non Residential:25%]
  - Figure 10: Gas Market Competitive Intensity, France
  - Figure 11: Switching Forecasts, France 2008 [Residential: 07% Non Residential:26%]
  - Figure 12: Market Competitive Intensity, France
  - 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: France

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