[Report] Market Competitive Intensity: Ireland 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: Whilst both the Irish metrics improve over the forecast period, a particularly strong improvement occurs in the power metric
  - The jump in Ireland' s power score over the forecast period gives it a significant leap upwards in the rankings over the forecast period
  - Despite being a small gas market, Ireland achieves a high ranking within the markets surveyed
- Power MCI: Ireland' s power score is driven by the Market Framework and Supplier Push metrics
  - Market Framework metrics generally score highly and are likely to further improve by July 2008
    - Effectiveness of Regulator [2006: 5.6/10 2008: 7.6/10]
    - Ease of Third Party Access [2006: 3.4/10 2008: 7/10]
    - Effectiveness of Balancing and Data Transfer [2006: 5.3/10 2008: 6.7/10]
  - The Supplier Push metrics will continue to be constrained by only modest gains from new entrants and the lack of wholesale power
    - Wholesale Market Fragmentation [2006: 2.8/10 2008: 5.5/10]
    - Retail Market Fragmentation [2006: 3.4/10 2008: 6/10]
    - Traded Market Maturity [2006: 0.3/10 2008: 1.5/10]
  - Customer Pull metrics will remain relatively low by 2008, despite the progress resulting from full market opening in 2005
    - Access to Market Information and Assistance [2006: 2.3/10 2008: 4/10]
    - Consumer Representation [2006: 1.5/10 2008: 3.5/10]
    - Propensity to Switch [2006: 5.8/10 2008: 7/10]
  - Switching activity in the residential sector will continue to be much lower than the non-residential market
- Gas MCI: A strong Market Framework score serves to offset weakness in some of the other metrics
  - All of the Irish Market Framework factors will be at the upper end of the scale by 2008
    - Effectiveness of Regulator [2006: 6.7/10 2008: 7.8/10]
    - Ease of Third Party Access [2006: 8.5/10 2008: 9/10]
    - Effectiveness of Balancing and Data Transfer [2006: 8.3/10 2008: 8.5/10]
  - The consolidation of new market entrants will increase the scores of the Supplier Push metrics
    - Wholesale Market Fragmentation [2006: 2.5/10 2008: 3/10]
    - Retail Market Fragmentation [2006: 1.4/10 2008: 4.5/10]
    - Traded Market Maturity [2006: 7.7/10 2008: 9/10]
  - Continued switching following full market opening in 2005 will drive the Customer Pull metrics higher in 2008
    - Access to Market Information and Assistance [2006: 4/10 2008: 5.5/10]
    - Consumer Representation [2006: 2.5/10 2008: 3/10]
    - Propensity to Switch [2006: 5.4/10 2008: 5.4/10]
  - The development of competition between now and 2008 will continue to result in increased rates of switching
- Outlook: The emerging nature of the Irish energy markets and the robust economy create significant potential commercial opportunities
  - In spite of being in its relative infancy, the Irish gas market is at a similar stage of competitiveness to the power market
    - Power scores
    - Gas scores
  - Despite a favourable TPA regime, new entrants will need to ensure they gain access to power and overcome switching lethargy
    - New Market Entrant Opportunities, Power
    - New Market Entrant Threats, Power
  - The issues facing new entrants to the Irish gas market are similar to those facing entrants to the power 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, Ireland 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, Ireland
  - Figure 9: Switching Forecasts, Ireland 2008 [Residential: 15% Non Residential:36%]
  - Figure 10: Gas Market Competitive Intensity, Ireland
  - Figure 11: Switching Forecasts, Ireland 2008 [Residential: 14% Non Residential:4%]
  - Figure 12: Market Competitive Intensity, Ireland
  - 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: Ireland

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