Abstract
Introduction
Evolving competitive dynamics are rapidly and significantly changing the face
of the gas and power markets in and around Europe. As such, a timely and
broadly based understanding of the market landscape is vital for players
throughout the energy value chain. Central to this is an understanding of the
exact stage of competitive development reached in each market, and how it is
likely to change.
Scope
*Up-to-date insight on market structures, regulatory developments, supply and
demand balances, asset developments and player strategies.
*Insight into current levels of gas and power competitive intensity
benchmarked against 33 relevant markets (EU 27 and 6 related countries).
*Forecasts of how the nine metrics making up the competitive intensity scores
will change by 2012.
Highlights
The MCI scores draw on nine underlying metrics grouped into three categories:
Market Framework (Regulatory Effectiveness; Pricing Regime; Ease of Third
Party Access), Supplier Push (Wholesale Fragmentation, Retail Fragmentation,
Traded Market Maturity), and Customer Pull (Access to Market Information,
Consumer Representation, Propensity to Switch)
Each of the Energy Market Landscape series provides a profile of both the
relevant gas and power market. Issues examined include regulatory structures,
player strategies and supply/demand dynamics. There is also a list of
operational, planned and under construction infrastructure including power
stations, pipelines, LNG terminals and storage sites
Reasons to Purchase
*Obtain up-to-date, relevant and standardized information on European and
related energy markets from a single source.
*Have a logical framework to monitor market developments and emerging trends,
identify opportunities and plan strategies accordingly.
*Assess current and future gas and power market competitive environments by
gaining insight into factors driving market competitiveness.
Table of Contents
DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Gas Market
Overview 2
Industry Landscape 2
Retail Market Players 2
Regulation
2
Gas Supply and Demand Analysis 3
Gas Infrastructure 7
Pipelines
7
Storage 7
Electricity Market Overview 8
Industry Landscape 8
Retail Market Players 8
Regulation 8
Electricity Supply and Demand
Analysis 9
Electricity Infrastructure 14
Generation Capacity 14
Electricity Networks 15
Competitive Intensity Analysis Overview 17
Datamonitor' s MCI Index offers a robust framework for measuring the
development of energy Market Competitive Intensity 17
The MCI Index shows
how competitive a particular market is. This has applications for both new
entrants seeking to enter the market, and established players and former
monopoly incumbents seeking to defined their market share from new entrants.
17
The MCI Index assesses markets as they stood in early 2009 and
forecasts conditions likely to be prevailing in July 2012, five years after
full market opening. 17
The MCI assessment draws on nine underlying
metrics grouped into three broad clusters: Market framework; Supplier Push;
Customer Pull 18
Each of the nine pillars has an assessment scale to allow
for the comparison of diverse markets (see appendix for more details) 19
Gas Market Competitive Intensity 20
Latvia' s gas position remains weak
over the forecast period 20
Developments in Latvia' s gas score will remain
modest across all metrics 21
All of the Market Framework factors will
remain modest throughout the forecast period 21
Effectiveness of Regulator
[2009: 2.5/10 2012: 3/10] 21
Ease of Third Party Access [2009: 0.1/10
2012: 1/10] 21
Pricing Regime [2009: 2/10 2012: 3/10] 21
None of the
supplier push factors will develop in any meaningful way over the forecast
period 22
Wholesale Market Fragmentation [2009: 1/10 2012: 1/10] 22
Retail Market Fragmentation [2009: 0.1/10 2012: 1/10] 22
Traded Market
Maturity [2009: 0.1/10 2012: 0.1/10] 22
Customer pull metrics will remain
weak for the forecast period 22
Access to Market Information and
Assistance [2009: 1/10 2012: 2/10] 22
Consumer Representation [2009:
0.1/10 2012: 1/10] 22
Propensity to Switch [2009: 1/10 2012: 2/10] 22
Electricity Market Competitive Intensity 23
The competitive intensity
ranking of Latvia' s power market will deteriorate over the period 23
None
of Latvia' s current or forecast scores break through the midpoint on the scale
24
None of the Market Framework factors show particular improvement over
the forecast period 24
Effectiveness of Regulator [2009: 3/10 2012:
4.5/10] 24
Ease of Third Party Access [2009: 2.5/10 2012: 3.5/10] 24
Pricing Regime [2009: 1.5/10 2012: 2/10] 25
The dominant position of
Latvenergo throughout the value chain will continue to constrain the supplier
push metrics 25
Wholesale Market Fragmentation [2009: 1.5/10 2012: 3.5/10]
25
Retail Market Fragmentation [2009: 0.1/10 2012: 2/10] 25
Traded
Market Maturity [2009: 0.1/10 2012: 0.1/10] 25
Customer Pull metrics will
remain at the lower end of the scale in 2012, despite the development of full
market opening in 2007 25
Access to Market Information and Assistance
[2009: 1.5/10 2012: 2/10] 25
Consumer Representation [2009: 0.1/10 2012:
1/10] 25
Propensity to Switch [2009: 0.5/10 2012: 1.5/10] 25
Latvia is
unlikely to create significant commercial opportunities for new market
entrants in the near term 26
COMPETITIVE INTENSITY ANALYSIS APPENDIX
27
MCI Scores Summary 27
MCI Scoring Scales 30
APPENDIX 35
List of power stations in Latvia 35
Definitions 35
Ask the analyst
36
Datamonitor consulting 36
Disclaimer 36
List of Tables
Table 1: Latvia major gas retail players 2
Table 2: Latvia gas supply and
demand balance, 2007-08e 4
Table 3: Latvia gas transmission pipelines
7
Table 4: Latvia gas storage sites 7
Table 5: Latvia major power
retail players 8
Table 6: Latvia power supply and demand balance, 2007-08e
10
Table 7: Latvia system capacity 16
Table 8: Market Competitive
Intensity, Latvia 2009 and 2012 27
Table 9: MCI Additive, Europe 2009 and
2012 28
Table 10: MCI Multiplicative, Europe 2009 and 2012 29
Table
11: Latvia power generation assets 35
List of Figures
Figure 1:
Latvia gas consumption by sector, 2008e 5
Figure 2: Latvia gas
consumption, trends and forecasts, 1990-2020f 6
Figure 3: Latvia power
production by fuel type, 1990-2008e 11
Figure 4: Latvia power production
by fuel type, 2008e 12
Figure 5: Latvia power sectoral consumption, 2008e
13
Figure 6: Latvia power consumption, trends and forecasts, 1990-2020f
14
Figure 7: Latvia power generation capacity by fuel type, 2008 15
Figure 8: MCI Assessment Scale 17
Figure 9: MCI Assessment Framework
18
Figure 10: MCI Scales 19
Figure 11: European Gas Market Competitive
Intensity, 2009-12 20
Figure 12: Gas Market Competitive Intensity, Latvia
21
Figure 13: European Power Market Competitive Intensity, 2009-12 23
Figure 14: Power Market Competitive Intensity, Latvia 24
Figure 15: Market
Competitive Intensity, Latvia 26
Figure 16: Scale for MCI Assessment,
Effectiveness of Regulator 30
Figure 17: Scale for MCI Assessment, Ease of
Third Party Access 31
Figure 18: Scale for MCI Assessment, Pricing Regime
31
Figure 19: Scale for MCI Assessment, Wholesale Market Fragmentation
32
Figure 20: Scale for MCI Assessment, Retail Market Fragmentation 32
Figure 21: Scale for MCI Assessment, Traded Market Maturity 33
Figure 22:
Scale for MCI Assessment, Access to Market Information 33
Figure 23: Scale
for MCI Assessment, Consumer Representation 34
Figure 24: Scale for MCI
Assessment, Propensity to Switch 34
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