Market Competitive Intensity (MCI): Brunei

Datamonitor's Market Competitive Intensity Index (MCI) is a robust framework for measuring and benchmarking the development of competitiveness and market conditions in a range of gas and electricity markets. The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push and Customer Pull.

Report Highlights
MCI scores are calculated using two different methods. The first, the simple weighted average (additive) measure shows overall competitive intensity. The second, the multiplicative method, is more complex. It prevents markets with an overly wide spread of underlying raw scores from exerting undue influence over, or skewing, the final result. Liberalisation, energy pricing issues and environmental concerns will remain key drivers of gas and power market dynamics throughout the MCI forecast period.
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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 3
The MCI assessment draws on nine underlying metrics grouped into three broad clusters: market framework, supplier push, customer pull. 3
The MCI Index measures the development of 20 diverse Asia Pacific gas and power markets 4
The MCI Index assesses markets in December 2007, and on July 1, 2010, in addition to driving a market switching forecast 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: Brunei's energy markets lack competitive intensity throughout the forecast period 7
Brunei's power market score is constrained by weak customer pull scores 7
Brunei's gas market scores are weak across all of the metrics 8
Power MCI: Brunei's power market shows only very marginal development 9
Other than the balancing score, Brunei's Market Framework scores are weak 9
Effectiveness of regulator [2007: 1/10 2010: 1/10] 9
Effectiveness of balancing and data transfer [2007: 4/10 2010: 5/10] 10
Brunei is characterized by a duopoly type structure where the government body is the main supplier at both wholesale and retail level 10
Wholesale market fragmentation [2007: 3/10 2010: 4/10] 10
Retail market fragmentation [2007: 3/10 2010: 4/10] 10
Traded market maturity [2007: 0/10 2010: 0/10] 10
Customer pull scores are all at the bottom end of the scale 10
Access to market information and assistance [2007: 2/10 2010: 2/10] 10
The dominant role of the DES and BPC in the retail power sector mean that this metric scores very much at the bottom end of the scale. 10
Consumer representation [2007: 0/10 2010: 0/10] 10
Propensity to switch [2007: 0/10 2010: 0/10] 10
Gas MCI: Brunei's gas market remains at the lower end of the competitive intensity scale 11
The Market Framework scores will remain modest over the coming years 12
Effectiveness of regulator [2007: 2/10 2010: 3/10] 12
Ease of third party access [2007: 0/10 2010: 0/10] 12
Brunei LNG (BLNG) is the only company engaged in the midstream value chain of the gas industry. BLNG has its own LNG terminal and transmission network, and no other company exists in the segment. As a result of this configuration there is no need for third party access as the market is dominated by a single player. 12
Effectiveness of balancing and data transfer [2007: 0/10 2010: 0/10] 12
The current gas market structure in Brunei means that balancing is yet to emerge as a concept. 12
A highly concentrated wholesale and retail market leads to weak Supplier Push scores 12
Wholesale market fragmentation [2007: 1/10 2010: 1/10] 12
Retail market fragmentation [2007: 0.5/10 2010: 0.5/10] 12
No customer pull exists in the Brunei gas market 12
Access to market information and assistance [2007: 1/10 2010: 2/10] 12
Consumer representation [2007: 0/10 2010: 0/10] 12
Propensity to switch [2007: 0/10 2010: 0/10] 13
Outlook: Competitive intensity will remain limited for the foreseeable future 13
MCI Scores 14
APPENDIX 17
Definitions 17
Ask the analyst 22
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Table 1: Market Competitive Intensity, Brunei 2007-10 14
Table 2: MCI additive, Asia Pacific 2007-2010 15
Table 3: MCI multiplicative, Asia Pacific 2007-2010 16
Figure 1: MCI assessment Scale 3
Figure 2: MCI Assessment Framework 3
Figure 3: MCI market coverage 4
Figure 4: MCI scales 5
Figure 5: MCI Applications 6
Figure 6: Asia Pacific power Market Competitive Intensity, 2007-10 7
Figure 7: Asia-Pacific gas Market Competitive Intensity, 2007-10 8
Figure 8: Power Market Competitive Intensity Index, Brunei 9
Figure 9: Gas Market Competitive Intensity, Brunei 11
Figure 10: Market Competitive Intensity, Brunei 13
Figure 11: Scale for MCI assessment, effectiveness of regulator 17
Figure 12: Scale for MCI assessment, ease of third party access 18
Figure 13: Scale for MCI assessment, effectiveness of balancing and data transfer 18
Figure 14: Scale for MCI assessment, wholesale market fragmentation 19
Figure 15: Scale for MCI assessment, retail market fragmentation 19
Figure 16: Scale for MCI assessment, traded market maturity 20
Figure 17: Scale for MCI assessment, access to market information and assistance 20
Figure 18: Scale for MCI assessment, consumer representation 21
Figure 19: Scale for MCI assessment, propensity to switch 21
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