Electricity Industry Market Report 2009
Key Note Publications Ltd, August 2009, Pages: 114
This Market Report examines the UK electricity industry in terms of the fundamental activities of generation, transmission, distribution and supply. Between 2005 and 2008, UK final electricity consumption declined year-on-year, and finished at 339,914 gigawatt-hours (GWh) in 2008. Factors contributing to this included a decline in the manufacturing sector, the large loss of office jobs in 2008 and efforts by consumers to contain energy costs during the economic downturn. In 2007, the main final demand for electricity arose from the industrial (34.4%) and domestic (33.6%) sectors. By value, the domestic sector accounts for the largest sales.
Many UK power stations are approaching the end of their useful life and it is estimated that a third of UK generating capacity must be replaced by 2020. Currently, fossil fuels account for the majority of electricity generation, with gas holding the largest share of the market, and this will continue to be the case at least until 2020. Due to increasingly tough measures on environmental issues, the industry will be required to find methods of reducing carbon emissions in the process of burning coal and gas. Some generating companies plan to build new coal-fired power stations, but the Government has decided that a proportion of the capacity of these stations must have carbon capture and storage (CCS) facilities, and has launched a scheme to subsidize four of the eight proposed sites. Eventually, all new coal-fired power stations will be required to include CCS schemes.
A decision has now been made to allow private companies to build new nuclear power stations, and it is anticipated that work can begin in 2013/2014, with operation beginning between 2017 and 2020. Land is currently being purchased for these sites. Renewable energy is growing as a source of electricity, but it is expensive, and some companies in this sector are campaigning for more Government support.
To improve efficiency in meter reading and to give customers more control over their energy consumption, the Government has announced that all homes in Britain will have smart meters by 2020. This major project will involve the installation of remotely read meters in 26 million homes and several million businesses.
Forecasting the electricity industry is extremely difficult due to the current downturn in the UK economy, and factors such as high unemployment, contractions in gross domestic product (GDP) and fluctuations in oil prices are likely to impact on the market between 2009 and 2013. According to the Department for Business, Innovation and Skills (BIS), gas will continue to be the dominant fuel used for electricity generation, and its share of the market (by terawatt-hours [TWh]) will increase from 36.7% in 2005 to 53.1% by 2020.
Executive Summary
1. Market Definition
REPORT COVERAGE
Generation
Transmission
Distribution
Supply
MARKET SECTORS
MARKET TRENDS
ECONOMIC TRENDS
Population
Table 1.1: UK Resident Population Estimates by Sex (000), Mid-Years 2004-2008
Gross Domestic Product
Table 1.2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices
(£m), 2004-2008
Inflation
Table 1.3: UK Rate of Inflation (%), 2004-2008
Unemployment
Table 1.4: Actual Number of Unemployed Persons in the UK (million), 2004-2008
Household Disposable Income
Table 1.5: UK Household Disposable Income Per Capita (£), 2004-2008
MARKET POSITION
The UK
Table 1.6: UK Production of Primary Fuels by Type by Volume
(million tonnes of oil equivalent), 2004-2008
Figure 1.1: UK Production of Primary Fuels by Type by Volume
(million tonnes of oil equivalent), 2004-2008
Table 1.7: Fuel Used in UK Electricity Generation by Volume
(million tonnes of oil equivalent), 2003-2007
Overseas
2. Market Size
THE TOTAL MARKET
Table 2.1: UK Generating Plant Capacity for All Generating Companies
(megawatts), 2003-2007
Table 2.2: Fuel Mix Used in UK Electricity Generation by Type
by Volume (million tonnes of oil equivalent), 2004-2008
Figure 2.1: Fuel Mix Used in UK Electricity Generation
by Type by Volume (%), 2008
Table 2.3: UK Electricity Net Supply by Type of Producer (gigawatt-hours),
2003-2007
BY MARKET SECTOR
By Volume
Table 2.4: UK Final Electricity Consumption by Sector
(gigawatt-hours), 2003-2007
Figure 2.2: UK Final Electricity Consumption (gigawatt-hours), 2003-2007
Table 2.5: UK Final Electricity Consumption
in the Industrial Sector (gigawatt-hours), 2007
By Value
Table 2.6: UK Electricity Sales by Sector by Value (£m), 2003-2007
Figure 2.3: UK Electricity Sales by Value (£m), 2003-2007
OVERSEAS TRADE
By Volume
Table 2.7: Overseas Trade in Electricity by Volume (gigawatt-hours), 2005-2007
By Value
Table 2.8: Overseas Trade in Electricity by Value (£m), 2005-2007
3. Industry Background
RECENT HISTORY
NUMBER OF COMPANIES
Table 3.1: Number of UK VAT- and/or PAYE-Based Enterprises Engaged
in the Production, Transmission and Distribution of Electricity by Turnover Sizeband
(£000 and number), 2007 and 2008
EMPLOYMENT
Table 3.2: Number of UK VAT- and/or PAYE-Based Enterprises Engaged
in the Production, Transmission and Distribution of Electricity by Employment
Sizeband, 2007 and 2008
REGIONAL VARIATIONS IN THE MARKETPLACE
Table 3.3: UK Electricity Sales by Sector by Region (gigawatt-hours), 2006
Table 3.4: Number of Electricity Customers in Great Britain
by Sector by Region (000), 2006
DISTRIBUTION
HOW ROBUST IS THE MARKET?
LEGISLATION
Energy Act 2008
Climate Change Act 2008
Large Combustion Plant Directive
KEY TRADE ASSOCIATIONS
AFAQ-ETA
Association of Electricity Producers
BEAMAEnergy
Energy Networks Association
Energy Retail Association
Energy & Utility Skills
4. Competitor Analysis
THE MARKETPLACE
Generation
Transmission
Distribution
Supply
MARKET LEADERS
British Energy Group PLC
Centrica PLC
EDF Energy PLC
E.ON UK PLC
National Grid PLC
RWE npower PLC
Scottish Power Ltd
Scottish and Southern Energy PLC
Viridian Group Ltd
OTHER COMPANIES
AES Corporation
BNFL
CE Electric UK
Central Networks
Drax Power Ltd
Electricity North West Ltd
International Power PLC
United Utilities
Western Power Distribution Holdings Ltd
OUTSIDE SUPPLIERS
Generation
Transmission and Distribution
Supply
Other Equipment
5. Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
6. Buying Behaviour
FINAL ELECTRICITY CONSUMPTION
Table 6.1: UK Final Electricity Consumption by Sector
(gigawatt-hours), 2005-2007
Industrial Customers
Domestic Customers
Table 6.2: Domestic Expenditure on Energy by Type of Fuel and Energy (£m),
2005-2007
Commercial and Public Administration Customers
7. Current Issues
REPLACEMENT POWER-GENERATING CAPACITY
NUCLEAR POWER
CLEAN BURN AND CARBON CAPTURE AND STORAGE
RENEWABLES
TRANSMISSION NETWORK UPGRADING
SMART METERS
CORPORATE DEVELOPMENTS
8. The Global Market
WORLD MARKET
Table 8.1: World Net Electricity Consumption and Forecast Consumption by Region
by Type of Fuel (trillion kilowatt-hours), 2005, 2010, 2015, 2020, 2025 and 2030
EUROPE
Table 8.2: Maximum Net Electricity Generating Capacity in the EU-27 by Type
(gigawatts), 2005 and 2006
Table 8.3: Total Gross Production Electricity Supply in the EU-27 by Type
(gigawatt-hours), 2007
Table 8.4: Maximum Net Electricity Generating Capacity in the EU-27 by Country
(gigawatts), 2006
Table 8.5: Electricity Demand in the EU-27 by Country (terawatt-hours), 2006
9. Forecasts
INTRODUCTION
The Economy
Population
Table 9.1: Forecast UK Resident Population by Sex (000), Mid-Years 2009-2013
Gross Domestic Product
Table 9.2: Forecast UK Growth in Gross Domestic Product in Real Terms (%),
2009-2013
Inflation
Table 9.3: Forecast UK Rate of Inflation (%), 2009-2013
Unemployment
Table 9.4: Forecast Actual Number of Unemployed Persons in the UK (million),
2009-2013
FORECASTS
Table 9.5: Projected Fuel Mix Used in UK Electricity Generation (terawatt-hours),
2005, 2010 and 2020
Figure 9.1: Projected Fuel Mix Used in UK Electricity Generation (terawatt-hours),
2005, 2010 and 2020
FUTURE TRENDS
10. Company Profiles
BRITISH ENERGY GROUP PLC
CENTRICA PLC
EDF ENERGY PLC
E.ON UK PLC
NATIONAL GRID PLC
RWE NPOWER PLC
SCOTTISH POWER LTD
SCOTTISH AND SOUTHERN ENERGY PLC
11. Further Sources
Associations
Publications
General Sources
Government Publications
Other Sources
Sources
- BRITISH ENERGY GROUP PLC
- CENTRICA PLC
- EDF ENERGY PLC
- E.ON UK PLC
- NATIONAL GRID PLC
- RWE NPOWER PLC
- SCOTTISH POWER LTD
- SCOTTISH AND SOUTHERN ENERGY PLC
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