Market Competitive Intensity (MCI): Singapore

Datamonitor's MCI Index offers a robust framework for measuring the development of utility Market Competitive Intensity. The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; 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: Singapore's gas and power markets are at widely differing stages of competitive development 7
Singapore's power market will remain at seventh place among the 20 Asia Pacific power markets 7
Singapore's gas market is expected to experience a slight decline in ranking over the forecast period 8
Power MCI: Singapore's power sector was Asia's first liberalized market 9
Market Framework scores remain strong over the forecast period 9
Effectiveness of regulator [2007: 8/10 2010: 8.5/10] 9
Ease of third-party access [2007: 5/10 2010: 5/10] 10
Effectiveness of balancing and data transfer [2007: 9.5/10 2010: 9.5/10] 10
As the power system operator, the Power System Operation Division (PSOD), under the EMA, ensures the security of electricity supplies to consumers and arranges for the secure operation of the power system in Singapore. Balancing is carried out in real time every half an hour. The current system is seen as being efficient and easy to use. 10
Supplier Push metrics show some degree of development over the forecast period 10
Wholesale market fragmentation [2007: 2.5/10 2010: 3.5/10] 10
Retail market fragmentation [2007: 5.5/10 2010: 7/10] 10
Traded market maturity [2007: 3/10 2010: 5/10] 10
Customer Pull metrics show only minor development over the forecast period 11
Access to market information and assistance [2007: 6/10 2010: 7/10] 11
Consumer representation [2007: 3.5/10 2010: 4.5/10] 11
Propensity to switch [2007: 2.5/10 2010: 3/10] 11
Gas MCI: Singapore's gas market score is driven by Market Framework metrics 12
Market restructuring is continuing to help develop Market Framework scores 12
Effectiveness of regulator [2007: 3/10 2010: 5/10] 12
Ease of third-party access [2007: 5.5/10 2010: 7/10] 12
In Singapore, there has been some unbundling of asset ownership. For example, as a gas transporter, PowerGas (the gas pipeline system operator) is barred from competitive portions of the industry, including gas importation, trading and retailing. Nevertheless, some asset integration remains in Singapore's gas market such as SembCorp Gas Pte Ltd that remains both an importer as well as a retailer. The EMA has made open access to transportation mandatory, and has ruled that gas transporters must allow third-party access on a non-discriminatory basis, not only to pipelines and associated processing facilities, but also to any LNG facilities that it may designate. 12
Effectiveness of balancing and data transfer [2007: 5/10 2010: 6.5/10] 13
PowerGas is responsible for maintaining the pressure of the overall gas system, and for monitoring the quality of the gas that is introduced into the network. This is done through the Gas Transport IT System Solution, which facilitates the balancing of gas injections and withdrawals from the gas transportation network. 13
Supplier Push metrics have considerable scope for development in the coming years 13
Wholesale market fragmentation [2007: 1/10 2010: 1.5/10] 13
Retail market fragmentation [2007: 0.5/10 2010: 1.5/10] 13
Customer Pull scores remain at a largely undeveloped stage 14
Access to market information and assistance [2007: 2/10 2010: 2.5/10] 14
Consumer representation [2007: 2.5/10 2010: 3/10] 14
Propensity to switch [2007: 0.5/10 2010: 0.5/10] 14
Outlook: Competitive intensity in the gas sector will continue to lag that seen in power 15
MCI scores 16
APPENDIX 19
Definitions 19
Ask the analyst 24
LIST OF TABLES
Table 1: Market Competitive Intensity, Singapore 2006-08 16
Table 2: MCI Additive, Asia Pacific 2007-10 17
Table 3: MCI Multiplicative, Asia Pacific 2007-10 18
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Table 1: Market Competitive Intensity, Singapore 2006-08 16
Table 2: MCI Additive, Asia Pacific 2007-10 17
Table 3: MCI Multiplicative, Asia Pacific 2007-10 18
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, Singapore 9
Figure 9: Gas Market Competitive Intensity, Singapore 12
Figure 10: Market Competitive Intensity, Singapore 15
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 tepresentation 23
Figure 19: Scale for MCI assessment, propensity to switch 24
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