[Report] Market Competitive Intensity: Russia 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 Russia' s gas and power markets remain very much at the lower end of the scale of the markets surveyed
  - Despite achieving a strong increase in its score, Russia' s power ranking increases by just one place over the forecast period
  - The increase in score over the forecast period allows Russia to climb one position in the gas rankings
- Power MCI: Russia' s power score is driven by strong Supplier Push metrics
  - Other than possible changes in the balancing regime, the Market Framework metrics will remain at the lower end of the scale
    - Effectiveness of Regulator [2006: 2/10 2008: 3/10]
    - Ease of Third Party Access [2006: 0/10 2008: 3/10]
    - Effectiveness of Balancing and Data Transfer [2006: 3/10 2008: 5/10]
  - Ongoing market reform will drive the Supplier Push factors considerably higher by the end of the forecast period
    - Wholesale Market Fragmentation [2006: 2.5/10 2008: 8/10]
    - Retail Market Fragmentation [2006: 2.5/10 2008: 7/10]
    - Traded Market Maturity [2006: 3/10 2008: 8/10]
  - Current market dynamics mean that the power Customer Pull metrics have no scope to remain anything other than very limited
    - Access to Market Information and Assistance [2006: 0/10 2008: 2.5/10]
    - Consumer Representation [2006: 0/10 2008: 1/10]
    - Propensity to Switch [2006: 2.5/10 2008: 3/10]
  - Market reforms will drive Russian power market switching rates, though they will remain modest by EU standards
- Gas MCI: Russia' s gas scores are consistently low across all metrics
  - Russia' s Market Framework factors all score at the lower end of the scale with little improvement likely to be seen by 2008
    - Effectiveness of Regulator [2006: 2/10 2008: 3/10]
    - Ease of Third Party Access [2006: 0/10 2008: 2.5/10]
    - Effectiveness of Balancing and Data Transfer [2006: 0/10 2008: 3/10]
  - None of the factors making up the Supplier Push metrics will develop significantly by 2008
    - Wholesale Market Fragmentation [2006: 1/10 2008: 2/10]
    - Retail Market Fragmentation [2006: 1/10 2008: 2/10]
    - Traded Market Maturity [2006: 2/10 2008: 2.5/10]
  - Current market dynamics mean that the gas Customer Pull metrics have no scope to remain anything other than very limited
    - Access to Market Information and Assistance [2006: 0/10 2008: 1/10]
    - Consumer Representation [2006: 0/10 2008: 1/10]
    - Propensity to Switch [2006: 1/10 2008: 3/10]
  - Extremely low switching rates will be prevailing at the end of the forecast period in Russia
- Outlook: The nature of the Russian energy markets mean that new market entrants are only likely to target the upstream gas sector
  - At the end of the forecast period Russia' s power market will show significantly more competitive intensity than the gas market
    - Power scores
    - Gas scores
  - The reform of RAO UES potentially creates commercial opportunities for new players to enter the Russian market
    - New Market Entrant Opportunities, Power
    - New Market Entrant Threats, Power
  - The dominance of Gazprom means that only marginal opportunities exist in the short to medium term in the Russian 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, Russia 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, Russia
  - Figure 9: Switching Forecasts, Russia 2008 [Residential: 08% Non Residential:12%]
  - Figure 10: Gas Market Competitive Intensity, Russia
  - Figure 11: Switching Forecasts, Russia 2008 [Residential: 03% Non Residential:08%]
  - Figure 12: Market Competitive Intensity, Russia
  - 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: Russia

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