[Report] Market Competitive Intensity: Netherlands 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 markets in the Netherlands are ranked at the upper end of the scale
  - The one point increase in the Dutch power score over the forecast period sees it remain in fifth place in the rankings
  - The increase in the Dutch gas score over the forecast period is insufficient to prevent a fall of one place in the rankings
- Power MCI: The Dutch power score is curtailed by weakness in the Customer Pull metrics
  - The Market Framework metrics are driven by the competency of the regulator and its focus on social as well as market issues
    - Effectiveness of Regulator [2006: 7.8/10 2008: 8.1/10]
    - Ease of Third Party Access [2006: 6.3/10 2008: 8/10]
    - Effectiveness of Balancing and Data Transfer [2006: 5.2/10 2008: 7/10]
  - Supplier Push factors will grow by July 2008, though only to a minimal degree
    - Wholesale Market Fragmentation [2006: 5.9/10 2008: 6/10]
    - Retail Market Fragmentation [2006: 5.8/10 2008: 5.8/10]
    - Traded Market Maturity [2006: 6/10 2008: 8.8/10]
  - Customer Pull factors are mainly driven by a medium propensity to switch
    - Access to Market Information and Assistance [2006: 7.6/10 2008: 8.2/10]
    - Consumer Representation [2006: 4.5/10 2008: 5/10]
    - Propensity to Switch [2006: 2.5/10 2008: 3.3/10]
  - Switching rates will continue to be and are likely to remain higher than in many other markets
- Gas MCI: By 2008 all of the Dutch gas scores are in the upper half of the scoring scale
  - The relatively high Market Framework scores reflect the status of the Netherlands as an established and mature gas market
    - Effectiveness of Regulator [2006: 7/10 2008: 7.7/10]
    - Ease of Third Party Access [2006: 7.6/10 2008: 7.2/10]
    - Effectiveness of Balancing and Data Transfer [2006: 6/10 2008: 7.3/10]
  - Supplier Push factors are driven by the existence of, and growing liquidity in, the TTF wholesale market
    - Wholesale Market Fragmentation [2006: 4.1/10 2008: 5.5/10]
    - Retail Market Fragmentation [2006: 6/10 2008: 6.7/10]
    - Traded Market Maturity [2006: 7.4/10 2008: 8.6/10]
  - Customer Pull scores have been constrained, and will continue to be constrained, by a lack of strong consumer representation
    - Access to Market Information and Assistance [2006: 4.3/10 2008: 6.4/10]
    - Consumer Representation [2006: 4.1/10 2008: 5.1/10]
    - Propensity to Switch [2006: 3.8/10 2008: 5/10]
  - Switching activity will be higher than in many other markets by 2008 owing to full market opening occurring ahead of EU deadlines
- Outlook: If the threat posed by entrenched players can be overcome, the Dutch market offers commercial opportunities to new entrants
  - Relatively liquid traded wholesale markets are key elements leading to high levels of competitive intensity in the Dutch markets
    - Power scores
    - Gas scores
  - With a stable regulatory environment and a mature traded market, the Dutch power sector has its attractions to new entrants, though efficient balancing remains an issue
    - New Market Entrant Opportunities, Power
    - New Market Entrant Threats, Power
  - Despite being the most competitive market after the UK both now and 2008, opportunities in the Dutch gas market may be limited by the wave of new entrants with first mover advantage
    - 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, Netherlands 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, Netherlands
  - Figure 9: Switching Forecasts, Netherlands 2008 [Residential: 2% Non Residential:45%]
  - Figure 10: Gas Market Competitive Intensity, Netherlands
  - Figure 11: Switching Forecasts, Netherlands 2008 [Residential: 28% Non Residential:46%]
  - Figure 12: Market Competitive Intensity, Netherlands
  - 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: Netherlands

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