Extended Expert View: BETTA and Energy Retail in Scotland's I&C Market

Publication Date	May 2005
Publisher	Datamonitor
Product Type	Report
Pages	20
ISBN Number	not applicable
Product Code	DAT00565

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Summary

Introduction

When NETA was introduced into England and Wales, Scotland was left with an arrangement little changed from the 1990s. As there was no traded wholesale market, energy producers were required to sell their output to ScottishPower and Scottish and Southern Energy at a price set by the regulator. Thus the two Scottish based utilities controlled almost the entire generation output of Scotland.

Scope

An explanation of the background to BETTA and its key features.
An evaluation of contradictory arguments about the affect that BETTA will have on energy retail in Scotland.
Prediction of the wins and losses for each major utility in the I&C market.

Highlights

The relative sizes of transmission and distribution charges may go some way to explaining the lack of residential switching in Scotland, but this is in no way conclusive.

Datamonitor expects the market share in Scotland's I&C sector to become more like the one in England and Wales. If the Scottish I&C sector becomes like England and Wales ScottishPower will lose market share dramatically, principally to EDF Energy, British Energy and RWE npower.

Reasons to Purchase

Understand what BETTA means to the retail department.
Gauge how much market share the Scottish incumbents are likely to lose

Content

Executive Summary

BETTA will affect the Scottish I&C retail market, particularly to EDF Energy's benefit and ScottishPower's detriment

Betta Eev

Before BETTA, the Scottish wholesale power market was controlled by SSE and ScottishPower but prices were set by Ofgem
BETTA involves the introduction of a traded wholesale market and fundamental changes to power transmission management
There are cogent arguments both for and against the proposition that BETTA will change the retail landscape in Scotland
The retail market will change
The retail market will not change
The prevalence of the Scottish suppliers in Scotland's I&C sector suggests that the retail market was not competitive
Explanations based on brand and location do not explain the lack of switching in the I&C market
Datamonitor concludes that TUOS / DUOS charges do not account for the lack of switching in Scotland
Datamonitor expects the market share in Scotland's I&C sector to become more like the one in England and Wales
If the Scottish I&C sector becomes like England and Wales ScottishPower will lose market share dramatically, principally to EDF Energy, British Energy and RWE npower
Neither Scottish supplier is in a strong position in the I&C market, although ScottishPower seems likely to suffer most
The non-Scottish based suppliers bring several advantages to Scotland, but the SME market will still not be easy to crack

Appendix

Research methodology
Future readings
Report writing team
How to contact experts in your industry

List Of Figures

Figure 1: I&C retail load in Scotland (2003/04)
Figure 2: Cost components of an I&C bill
Figure 3: Percentage of total volume in E&W (2005)
Figure 4: I&C volume in Scotland if the market grows to resemble E&W
Figure 5: Net change in I&C volume in Scotland if the market grows to resemble E&W
Figure 6: ScottishPower is likely to suffer most
Figure 7: The non-Scottish based supplier bring several advantages to Scotland