[Report] Market Competitive Intensity: Hungary 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 the gas and power scores in Hungary hover around the middle position of the markets surveyed
  - Hungary' s power position remains in the centre range of markets surveyed
  - Hungary' s gas position remains unchanged relative to the other markets surveyed over the forecast period
- Power MCI: Hungary' s overall power score is constrained by parts of the Customer Pull metric
  - Development of the Market Framework metrics remains modest both at the current time and in the near term future
    - Effectiveness of Regulator [2006: 6.5/10 2008: 6.5/10]
    - Ease of Third Party Access [2006: 6.7/10 2008: 8/10]
    - Effectiveness of Balancing and Data Transfer [2006: 3.7/10 2008: 5/10]
  - Hungary' s Supplier Push metrics are constrained by the dominance of MVM in the wholesale arena and the lack of a traded market
    - Wholesale Market Fragmentation [2006: 4.3/10 2008: 5/10]
    - Retail Market Fragmentation [2006: 6.2/10 2008: 6.8/10]
    - Traded Market Maturity [2006: 1/10 2008: 2.5/10]
  - Customer Pull metrics are driven by the levels of switching seen in the non-residential market and future residential switching
    - Access to Market Information and Assistance [2006: 2/10 2008: 3/10]
    - Consumer Representation [2006: 2.2/10 2008: 3.8/10]
    - Propensity to Switch [2006: 3.5/10 2008: 5/10]
  - Hungary' s additive score will drive a reasonably strong level of switching in the electricity market
- Gas MCI: Strong Market Framework factors support the overall gas score and offset weakness in the other metrics
  - All of Hungary' s Market Framework factors achieve scores at the upper end of the scale
    - Effectiveness of Regulator [2006: 6.5/10 2008: 8/10]
    - Ease of Third Party Access [2006: 6.6/10 2008: 8/10]
    - Effectiveness of Balancing and Data Transfer [2006: 7/10 2008: 8/10]
  - Supplier Push metrics remain constrained during the forecast period as a legacy of pre-liberalisation market dynamics
    - Wholesale Market Fragmentation [2006: 1/10 2008: 2/10]
    - Retail Market Fragmentation [2006: 4/10 2008: 4.3/10]
    - Traded Market Maturity [2006: 0/10 2008: 1/10]
  - None of the Customer Pull metrics move past their current low levels by the end of the forecast period
    - Access to Market Information and Assistance [2006: 1/10 2008: 2/10]
    - Consumer Representation [2006: 1.3/10 2008: 2/10]
    - Propensity to Switch [2006: 2.3/10 2008: 4.7/10]
  - Hungary' s gas switching rates will remain modest in both the residential and non-residential sectors
- Outlook: Power sector commercial opportunities are largely in the generation part of the value chain in the near term
  - Development in competitive intensity in the Hungarian gas market will continue to lag behind that seen in the electricity market
    - Power scores
    - Gas scores
  - Short term commercial opportunities in the Hungarian electricity market remain extremely limited
    - New Market Entrant Opportunities, Power
    - New Market Entrant Threats, Power
  - High levels of gas penetration and the role of existing players significantly curtail opportunities in the Hungarian gas market
    - 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, Hungary 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, Hungary
  - Figure 9: Switching Forecasts, Hungary 2008 [Residential: 1% Non Residential:34%]
  - Figure 10: Gas Market Competitive Intensity, Hungary
  - Figure 11: Switching Forecasts, Hungary 2008 [Residential: 05% Non Residential:2%]
  - Figure 12: Market Competitive Intensity, Hungary
  - 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: Hungary

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