Market Competitive Intensity: Spain

Table of Contents

• 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: Spain' s position in the power rankings will continue to lag that seen in gas
    • The competitive intensity ranking of Spain' s power market will deteriorate over the period
    • Spain' s gas position is unchanged over the forecast period
  • Power MCI: Spain' s power position is particularly impacted by weak Customer Pull metrics
    • Market Framework metrics will remain in the middle range both currently and by July 2008
      • Effectiveness of Regulator [2006: 6.5/10 2008: 7/10]
      • Ease of Third Party Access [2006: 4.2/10 2008: 5/10]
      • Effectiveness of Balancing and Data Transfer [2006: 6/10 2008: 6.5/10]
    • Supplier Push metrics are currently modest, though by July 2008 will begin to increase upwards
      • Wholesale Market Fragmentation [2006: 4/10 2008: 4.1/10]
      • Retail Market Fragmentation [2006: 4/10 2008: 4.5/10]
      • Traded Market Maturity [2006: 2/10 2008: 2.4/10]
    • Customer Pull metrics will remain relatively low in July 2008
      • Access to Market Information and Assistance [2006: 3/10 2008: 4.5/10]
      • Consumer Representation [2006: 3.5/10 2008: 3.8/10]
      • Propensity to Switch [2006: 2.2/10 2008: 3/10]
    • Switching rates in both the residential and non-residential sectors will continue to rise
  • Gas MCI: Market Framework factors are the main drivers of the Spanish gas score
    • Spanish Market Framework scores will increase only slightly by 2008
      • Effectiveness of Regulator [2006: 4.9/10 2008: 5.8/10]
      • Ease of Third Party Access [2006: 6.2/10 2008: 7.1/10]
      • Effectiveness of Balancing and Data Transfer [2006: 5.5/10 2008: 6.2/10]
    • Reductions in wholesale and retail fragmentation will drive the Supplier Push metrics higher by July 2008
      • Wholesale Market Fragmentation [2006: 3.4/10 2008: 4/10]
      • Retail Market Fragmentation [2006: 3.4/10 2008: 5/10]
      • Traded Market Maturity [2006: 3.1/10 2008: 3.9/10]
    • The Customer Pull metric is most heavily influenced by switching rates both currently and in the future
      • Access to Market Information and Assistance [2006: 3.3/10 2008: 5/10]
      • Consumer Representation [2006: 2.4/10 2008: 3/10]
      • Propensity to Switch [2006: 3.8/10 2008: 5.5/10]
    • Following an upsurge in residential switching, both sectors will continue to see increased switching activity in July 2008
  • Outlook: Commercial opportunities in the gas sector will lead those available in the power sector
    • Although the gas and power markets are currently at different stages of development, their competitive intensity scores converge in 2008
      • Power scores
      • Gas scores
    • Developments in the Spanish power market will create improved competitive intensity, though challenges remain to be overcome
      • New Market Entrant Opportunities, Power
      • New Market Entrant Threats, Power
    • Strong demand growth and continued gasification enhance the attractiveness of the Spanish market to new players
      • 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, Spain 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, Spain
    • Figure 9: Switching Forecasts, Spain 2008 [Residential: 19% Non Residential:38%]
    • Figure 10: Gas Market Competitive Intensity, Spain
    • Figure 11: Switching Forecasts, Spain 2008 [Residential: 26% Non Residential:35%]
    • Figure 12: Market Competitive Intensity, Spain
    • 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