Energy Market Landscape: Australia - Western Australia

Introduction

Evolving competitive dynamics are rapidly and significantly changing the face of the gas and power markets in the Asia Pacific region. As such, a timely and broadly based understanding of the market landscape is vital for players throughout the 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 and asset developments
• Insight into current levels of gas and power competitive intensity benchmarked against 12 other Asia Pacific markets
• 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.

Reasons to Purchase

• Obtain up-to-date, relevant and standardized information on the Asia Pacific 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
Wholesale Environment 2
Gas Supply and Demand Analysis 2
Gas Infrastructure 5
Pipelines 5
LNG 5
Electricity Market Overview 7
Industry Landscape 7
Electricity Supply and Demand Analysis 7
Electricity Infrastructure 11
Generation Capacity 11
Electricity Networks 12
Competitive Intensity Analysis Overview 13
Datamonitor's MCI Index offers a robust framework for measuring the development of energy Market Competitive Intensity 13
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 defend their market share from new entrants. 13
The MCI Index assesses markets as they stood in early 2010 and forecasts conditions likely to be prevailing in 2013. 13
The MCI assessment draws on nine underlying metrics grouped into three broad clusters: Market framework; Supplier Push; Customer Pull 14
Each of the nine pillars has an assessment scale to allow for the comparison of diverse markets (see appendix for more details) 15
Gas Market Competitive Intensity 16
The gas market competitive intensity lags behind most other markets in the region. 16
Competitive intensity shows little development over the forecast period 17
Market Framework scores are spread across the scale 17
Effectiveness of Regulator [2010: 7/10 2013: 8/10] 17
Ease of Third Party Access [2010: 10/10 2013: 10/10] 17
Pricing Regime [2010: 3/10 2013: 4.5/10] 17
Supplier Push metrics remain limited over the forecast period 18
Wholesale Market Fragmentation [2010: 5/10 2013: 5/10] 18
Retail Market Fragmentation [2010: 0.1/10 2013: 2/10] 18
Traded Market Maturity [2010: 0.1/10 2013: 0.1/10] 18
Customer Pull metrics are at the bottom end of the scale 18
Access to Market Information and Assistance [2010: 2/10 2013: 3.5/10] 18
Consumer Representation [2010: 6/10 2013: 7/10] 18
Propensity to Switch [2010: 0.1/10 2013: 0.1/10] 18
Electricity Market Competitive Intensity 20
Western Australia's competitive intensity remains behind other Australian states 20
Other than regulation, all the power metrics remain weak over the forecast period 21
Strong dominance of a public owned market structure leads to a weak market framework 21
Effectiveness of Regulator [2010: 7/10 2013: 8/10] 21
Ease of Third Party Access [2010: 9/10 2013: 10/10] 21
Pricing Regime [2010: 3/10 2013: 4/10] 21
Supplier Push factors remain modest over the forecast period 22
Wholesale Market Fragmentation [2010: 2/10 2013: 3/10] 22
Retail Market Fragmentation [2010: 1/10 2013: 1/10] 22
Traded Market Maturity [2010: 5.5/10 2013: 6/10] 22
A lack of full market opening curtails the Customer Pull metrics 22
Access to Market Information and Assistance [2010: 7/10 2013: 8/10] 22
Consumer Representation [2010: 6/10 2013: 7/10] 22
Propensity to Switch [2010: 0.1/10 2013: 1/10] 23
COMPETITIVE INTENSITY ANALYSIS APPENDIX 25
MCI Scores Summary 25
MCI Scoring Scales 27
APPENDIX 32
Definitions 32
Ask the analyst 34
Datamonitor consulting 34
Disclaimer 34

List of Tables

Table 1: Australia gas supply and demand balance, 2008─09e 3
Table 2: Australia's power supply and demand balance, 2008─09e 8
Table 3: Market Competitive Intensity, Western Australia 2010 and 2013 25
Table 4: MCI Additive, Asia Pacific 2010 and 2013 26
Table 5: MCI Multiplicative, Asia Pacific 2010 and 2013 26

List of Figures

Figure 1: Australian gas sectoral consumption, 2009e 4
Figure 2: Western Australian gas consumption, trends and forecasts, 2005─20f 5
Figure 3: Australian power production by fuel type, 2009e 9
Figure 4: Australia's power sectoral consumption, 2009e 10
Figure 5: Western Australian power consumption, trends and forecasts, 2005─20f 11
Figure 6: MCI Assessment Scale 13
Figure 7: MCI Assessment Framework 14
Figure 8: MCI Scales 15
Figure 9: Asia Pacific Gas Market Competitive Intensity, 2010─13 16
Figure 10: Gas Market Competitive Intensity, Western Australia 17
Figure 11: Asia Pacific Power Market Competitive Intensity, 2010─13 20
Figure 12: Power Market Competitive Intensity, Western Australia 21
Figure 13: Market Competitive Intensity, Western Australia 24
Figure 14: Scale for MCI Assessment, Effectiveness of Regulator 27
Figure 15: Scale for MCI Assessment, Ease of Third Party Access 28
Figure 16: Scale for MCI Assessment, Pricing Regime 28
Figure 17: Scale for MCI Assessment, Wholesale Market Fragmentation 29
Figure 18: Scale for MCI Assessment, Retail Market Fragmentation 29
Figure 19: Scale for MCI Assessment, Traded Market Maturity 30
Figure 20: Scale for MCI Assessment, Access to Market Information 30
Figure 21: Scale for MCI Assessment, Consumer Representation 31
Figure 22: Scale for MCI Assessment, Propensity to Switch 31