Market Competitive Intensity (MCI): Switzerland

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 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: Switzerland' s position in the power rankings remains better than that seen in gas 7
The competitive intensity ranking of Switzerland' s power market will deteriorate over the period 7
Switzerland' s gas position declines over the forecast period 7
Power MCI: Switzerland' s power position is impacted by weak market framework and customer pull factors 9
Market Framework metrics will remain lower in forecasted period 9
Effectiveness of Regulator [2008: 2/10 2010: 3/10] 9
Ease of Third Party Access [2008: 0.5/10 2010: 1.5/10] 9
Swissgrid was set up in 2006 to manage electricity transmission network operations. Although plans for a more structured TPA regime are in place, significant progress towards this aim is not expected before 2012. 9
Effectiveness of Balancing and Data Transfer [2008: 2/10 2010: 2.5/10] 10
Supplier Push metrics are surprisingly strong 10
Wholesale Market Fragmentation [2008: 6.5/10 2010: 7/10] 10
Although there are around 80 generators active in Switzerland, the 5 largest players (the Uberlandwerke) account for around 80% of generation capacity. 10
Retail Market Fragmentation [2008: 3/10 2010: 3.5/10] 10
Retail and distribution operations are regional monopolies. As such, the market remains concentrated, and will continue to do so until both the market has been liberalized and new entrants become established. 10
Traded Market Maturity [2008: 7/10 2010: 8/10] 10
Only consumer representation scores highly on the Customer Pull pillar 10
Access to Market Information and Assistance [2008: 2.5/10 2010: 3.5/10] 10
Consumer Representation [2008: 7/10 2010: 8/10] 10
Propensity to Switch [2008: 0/10 2010: 0/10] 10
Gas MCI: Regional monopolies and weak market regulation impede competition 11
Market framework metrics doesn' t show any significant improvement 11
Effectiveness of Regulator [2008: 2.5/10 2010: 3.5/10] 11
Ease of Third Party Access [2008: 2/10 2010: 3.5/10] 12
Effectiveness of Balancing and Data Transfer [2008: 3/10 2010: 3.5/10] 12
Supplier push metrics remain weak over the forecast period 12
Wholesale Market Fragmentation [2008: 2/10 2010: 2.5/10] 12
Retail Market Fragmentation [2008: 2/10 2010: 3.5/10] 12
Traded Market Maturity [2008: 0/10 2010: 0/10] 12
Customer Pull metrics remain weak throughout the forecast period 12
Access to Market Information and Assistance [2008: 2/10 2010: 2.5/10] 12
Consumer Representation [2008: 1/10 2010: 1.5/10] 12
Propensity to Switch [2008: 0/10 2010: 0/10] 13
Outlook: The competitive outlook for the power market remains stronger than in gas 14
Competitive intensity scores will remain modest at the end of the forecast period 14
Power scores 14
Gas scores 14
Nuclear power may provides new opportunity in power sector 15
New Market Entrant Opportunities, Power 15
New Market Entrant Threats, Power 15
New opportunities potentially lie in gas fired generation 15
New Market Entrant Opportunities, Gas 15
Gas demand growth in Switzerland has been particularly apparent in the power generation sector. Growth in the residential and non-residential sectors has been significantly lower at less than 1% per annum over the past decade. The need for new capacity, combined with the opportunities to acquire gas in nearby markets, means that new build CCGT capacity is a potential area of opportunity for new market entrants. 15
New Market Entrant Threats, Gas 15
MCI Scores 16
APPENDIX 19
Definitions 19
Ask the analyst 24
List of Tables
Table 1: Market Competitive Intensity, Switzerland 2008-10 16
Table 2: MCI Additive, Europe 2008-2010 17
Table 3: MCI Multiplicative, Europe 2008-2010 18
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, Switzerland 9
Figure 9: Gas Market Competitive Intensity, Switzerland 11
Figure 10: Market Competitive Intensity, Switzerland 14
Figure 11: Scale for MCI Assessment, Effectiveness of Regulator 19
Figure 12: Scale for MCI Assessment, Ease of Third Party Access 20
Figure 13: Scale for MCI Assessment, Effectiveness of Balancing and Data Transfer 20
Figure 14: Scale for MCI Assessment, Wholesale Market Fragmentation 21
Figure 15: Scale for MCI Assessment, Retail Market Fragmentation 21
Figure 16: Scale for MCI Assessment, Traded Market Maturity 22
Figure 17: Scale for MCI Assessment, Access to Market Information and Assistance 22
Figure 18: Scale for MCI Assessment, Consumer Representation 23
Figure 19: Scale for MCI Assessment, Propensity to Switch 23