Market Competitive Intensity (MCI): The Netherlands

Table of Contents

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Introduction: Datamonitor' s MCI Index offers a robust framework for measuring the development of energy Market Competitive Intensity 2
The MCI Index shows how attractive a particular market is to new entrants in terms of the competitive environment 2
The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; Customer Pull. 3
The MCI Index measures competitive intensity in the EU 27 and 6 related markets 4
The MCI Index assesses markets as they stood in early 2008 and forecasts conditions likely to be prevailing three years after full market opening 4
Each of the nine pillars has an assessment scale to allow for the comparison of diverse markets (see appendix for more details) 5
Two differing overall MCI scores are calculated to ensure full clarity of results 5
A simple weighted average (additive) measure shows overall competitive intensity 5
A weighted multiple (multiplicative) measure shows overall competitive intensity 5
The MCI framework has a number of applications for your organization 6
Context: Both the Dutch gas and power markets remain at the upper end of the scale 7
The Dutch power score is curtailed by the weakness in the Customer Pull metrics 7
The increase in the Dutch gas score over the forecast period is insufficient to increase its place in the rankings 7
Power MCI: The Dutch power score is curtailed by weakness in the Customer Pull metrics 9
The Market Framework metrics are driven by the competency of the regulator and its focus on social as well as market issues 9
Effectiveness of Regulator [2008: 8/10 2010: 8.5/10] 9
Ease of Third Party Access [2008: 6.5/10 2010: 9/10] 10
Effectiveness of Balancing and Data Transfer [2008: 5.5/10 2010: 8/10] 10
Supplier Push factors will continue to grow by July 2010 10
Wholesale Market Fragmentation [2008: 6.5/10 2010: 7/10] 10
Retail Market Fragmentation [2008: 6/10 2010: 7/10] 10
Traded Market Maturity [2008: 6.5/10 2010: 9/10] 10
Customer Pull factors are driven by widespread price discovery information 11
Access to Market Information and Assistance [2008: 8/10 2010: 9/10] 11
Consumer Representation [2008: 4.5/10 2010: 5.5/10] 11
Propensity to Switch [2008: 3/10 2010: 5/10] 11
Gas MCI: By 2010 all of the Dutch gas scores are in the upper half of the scoring scale 12
The relatively high Market Framework scores reflect the status of the Netherlands as an established and mature gas market 12
Effectiveness of Regulator [2008: 7/10 2010: 8.5/10] 12
Ease of Third Party Access [2008: 8/10 2010: 8.5/10] 12
Effectiveness of Balancing and Data Transfer [2008: 6.5/10 2010: 7.5/10] 13
Supplier Push factors are driven by the existence of, and growing liquidity in, the TTF wholesale market 13
Wholesale Market Fragmentation [2008: 4.5/10 2010: 6/10] 13
Retail Market Fragmentation [2008: 6/10 2010: 7/10] 13
Traded Market Maturity [2008: 7.5/10 2010: 9/10] 13
Customer Pull scores have been constrained, and will continue to be constrained, by a lack of strong consumer representation 14
Access to Market Information and Assistance [2008: 8/10 2010: 9/10] 14
Consumer Representation [2008: 4.5/10 2010: 6/10] 14
Propensity to Switch [2008: 4/10 2010: 5/10] 14
Outlook: If the threat posed by entrenched players can be overcome, the Dutch market offers commercial opportunities to new entrants 15
Relatively liquid traded wholesale markets are key elements leading to high levels of competitive intensity in the Dutch markets 15
Power scores 15
Gas scores 15
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 16
New Market Entrant Opportunities, Power 16
New Market Entrant Threats, Power 16
Despite being the most competitive market after the UK both now and 2010, opportunities in the Dutch gas market may be limited by the wave of new entrants with first mover advantage 16
New Market Entrant Opportunities, Gas 16
New Market Entrant Threats, Gas 17
MCI Scores 18
APPENDIX 21
Definitions 21
Ask the analyst 26
List of Tables
Table 1: Market Competitive Intensity, Netherlands 2008-10 18
Table 2: MCI Additive, Europe 2008-2010 19
Table 3: MCI Multiplicative, Europe 2008-2010 20
List of Figures
Figure 1: MCI Assessment Scale 2
Figure 2: MCI Assessment Framework 3
Figure 3: MCI Market Coverage 4
Figure 4: MCI Scales 5
Figure 5: MCI Applications 6
Figure 6: European Power Market Competitive Intensity, 2008-10 7
Figure 7: European Gas Market Competitive Intensity, 2008-10 8
Figure 8: Power Market Competitive Intensity, Netherlands 9
Figure 9: Gas Market Competitive Intensity, Netherlands 12
Figure 10: Market Competitive Intensity, Netherlands 15
Figure 11: Scale for MCI Assessment, Effectiveness of Regulator 21
Figure 12: Scale for MCI Assessment, Ease of Third Party Access 22
Figure 13: Scale for MCI Assessment, Effectiveness of Balancing and Data Transfer 22
Figure 14: Scale for MCI Assessment, Wholesale Market Fragmentation 23
Figure 15: Scale for MCI Assessment, Retail Market Fragmentation 23
Figure 16: Scale for MCI Assessment, Traded Market Maturity 24
Figure 17: Scale for MCI Assessment, Access to Market Information and Assistance 24
Figure 18: Scale for MCI Assessment, Consumer Representation 25
Figure 19: Scale for MCI Assessment, Propensity to Switch 25