Market Competitive Intensity: Sweden

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: A considerable gap exists between Sweden' s gas and power scores and rankings
    • Sweden' s power market score puts is significantly ahead of the majority of markets surveyed
    • The undeveloped nature of the Swedish gas sector means that it ranks towards the bottom of the markets surveyed
  • Power MCI: The majority of Sweden' s metrics score towards the upper end of the scale
    • The Swedish Market Framework metrics are likely to move up the scale by July 2008
      • Effectiveness of Regulator [2006: 3.5/10 2008: 5/10]
      • Ease of Third Party Access [2006: 7/10 2008: 8/10]
      • Effectiveness of Balancing and Data Transfer [2006: 6/10 2008: 7/10]
    • Supplier Push metrics are driven by the existence of the Nord Pool market
      • Wholesale Market Fragmentation [2006: 8/10 2008: 8/10]
      • Retail Market Fragmentation [2006: 7.5/10 2008: 7.5/10]
      • Traded Market Maturity [2006: 10/10 2008: 10/10]
    • Customer Pull factors score relatively highly, though are unlikely to move significantly between now and 2008
      • Access to Market Information and Assistance [2006: 7.5/10 2008: 8.5/10]
      • Consumer Representation [2006: 5/10 2008: 6/10]
      • Propensity to Switch [2006: 3/10 2008: 6/10]
    • Strong rates of switching are likely to continue into 2008 in both the residential and non-residential sectors
  • Gas MCI: In contrast to the power market, all but one of Sweden' s gas scores are in the bottom end of the scale
    • The undeveloped nature of the Swedish gas market constrains the Market Framework scores
      • Effectiveness of Regulator [2006: 3/10 2008: 3/10]
      • Ease of Third Party Access [2006: 3/10 2008: 3/10]
      • Effectiveness of Balancing and Data Transfer [2006: 4/10 2008: 6/10]
    • High levels of wholesale and retail fragmentation combined with a lack of wholesale gas constrain the Market Framework scores
      • Wholesale Market Fragmentation [2006: 0.5/10 2008: 1.5/10]
      • Retail Market Fragmentation [2006: 2.5/10 2008: 2.5/10]
      • Traded Market Maturity [2006: 0/10 2008: 0/10]
    • Customer Pull metrics will remain at the lower end of the scale between now and 2008 given the immature nature of the market
      • Access to Market Information and Assistance [2006: 3/10 2008: 3/10]
      • Consumer Representation [2006: 3/10 2008: 4/10]
      • Propensity to Switch [2006: 1.5/10 2008: 2.5/10]
    • Switching rates in the Swedish gas market are likely to remain modest
  • Outlook: Opportunities exist for players willing to make long term distribution infrastructure investments
    • Sweden' s position as one of Europe' s most competitive power markets is in direct contrast to its gas market
      • Power scores
      • Gas scores
    • Concerns over regulatory stability and the existing dominant players will somewhat temper the otherwise attractive nature of the market
      • New Market Entrant Opportunities, Power
      • New Market Entrant Threats, Power
    • The current opportunities in the Swedish gas market appear to be extremely limited with little improvement likely before at least 2010
      • 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, Sweden 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, Sweden
    • Figure 9: Switching Forecasts, Sweden 2008 [Residential: 37% Non Residential:54%]
    • Figure 10: Gas Market Competitive Intensity, Sweden
    • Figure 11: Switching Forecasts, Sweden 2008 [Residential: 07% Non Residential:08%]
    • Figure 12: Market Competitive Intensity, Sweden
    • 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