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
This is based on the average score of each underlying factor, weighted by the importance of that factor to the overall score. The weights applied to each of the metrics are shown later. The simple additive measure is calculated using the following formula: MCI=Sz1-9. 5
A weighted multiple (multiplicative) measure shows overall competitive intensity 5
The MCI framework has a number of applications for your organization 6
Context: South Australia's energy market is one of the most developed energy markets in Australia 7
Although well developed, competitive intensity in South Australia is eclipsed by other markets over the forecast period 7
In common with the power sector, gas market competitive intensity development does not keep pace with other markets in the region 8
Power MCI: By 2010, all of South Australia's scores move to the upper end of the range 9
Market Framework scores are particularly strong 9
Effectiveness of regulator [2007: 7.5/10 2010: 9/10] 9
Effectiveness of balancing and data transfer [2007: 9.5/10 2010: 10/10] 10
Concentration in the wholesale and retail markets curtails the Supplier Push metrics 10
Wholesale market fragmentation [2007: 4.5/10 2010: 5.5/10] 10
Retail market fragmentation [2007: 4/10 2010: 4/10] 11
Traded market maturity [2007: 9/10 2010: 10/10] 11
Customer Pull metrics develop well over the forecast period 11
Access to market information and assistance [2007: 6/10 2010: 8/10] 11
Consumer representation [2007: 5/10 2010: 9/10] 11
Propensity to switch [2007: 4.5/10 2010: 6.5/10] 12
Gas MCI: Competitive intensity in the gas sector will remain strong over the forecast period 13
Two of the three Market Framework factors score close to the top end of the scale 13
Effectiveness of regulator [2007: 7.5/10 2010: 9/10] 13
Ease of third party access [2007: 9/10 2010: 10/10] 14
Effectiveness of balancing and data transfer [2007: 3.5/10 2010: 4/10] 14
Supplier Push metrics have room to develop further in the longer term 14
Wholesale market fragmentation [2007: 4.5/10 2010: 4.5/10] 14
Retail market fragmentation [2007: 3/10 2010: 3/10] 14
Customer Pull scores vary widely between individual metrics 14
Access to market information and assistance [2007: 3.5/10 2010: 5/10] 14
Consumer representation [2007: 5/10 2010: 7/10] 15
Propensity to switch [2007: 7/10 2010: 9/10] 15
Outlook: Commercial opportunities in the power sector will continue to outweigh those seen in the gas market 16
MCI Scores 17
APPENDIX 20
Definitions 20
Ask the analyst 28
LIST OF TABLES
Table 1: Market Competitive Intensity, South Australia 2007-10 17
Table 2: MCI additive, Asia Pacific 2007-10 18
Table 3: MCI multiplicative, Asia Pacific 2007-10 19
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