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Electricity Industry Market Report 2002
Key Note Publications Ltd, Jan 2002
This Key Note market report analyses the UK electricity industry in terms of generation, transmission, distribution and supply. The trends in fuel used to generate electricity show the continued decline of coal and a steady rise in gas - which grew by 62.8% between 1996 and 2001. Although small at present, renewable energy sources have grown by 36.4% over the same period.
Electricity consumption grew by 7.2% between 1996 and 2000 to reach 338.52 terawatt hours (TWh) in 2000. During the same period, electricity generated grew by 7.8% to reach 358.640 TWh in 2000.
The industrial sector is the largest consumer, with 33.9% of the total in 2000, closely followed by domestic users with 33% of the total consumption. Around 91.7% of numbers of sites consuming electricity are domestic. The vast majority of sites consume less than 9 gigawatt hours (GWh) a year.
Electricity requirements as measured by transmission companies show that in 2000/2001 the requirement was 347.3 TWh, a growth of 6.5% over the 1996/1997 figure.
The UK industry has undergone a major structural change during the past decade and the market is now fully open to competition. The Utilities Act 2000 increases provision for the protection of consumer interests, a move which is supported by the regulatory requirement to separate distribution from supply activities. A new body, Energywatch, has been formed specifically to protect consumer interests and to give a forum for their concerns.
This report gives profiles of leading companies in the sector, including Innogy PLC, Powergen PLC, British Energy PLC, TXU Europe Ltd, Scottish Power UK PLC, The National Grid Company PLC and, Scottish and Southern Energy PLC. The gas company Centrica PLC is also active in the electricity market.
Current issues are also discussed within the report. Electricity prices have continued to fall under the New Trading Arrangements (Neta), which is causing companies to review their business strategies to maintain revenues decisions have yet to be made regarding the replacement of the UK's ageing nuclear reactors renewable energy is growing but is experiencing difficulties with Neta pricing policy. The UK electricity industry will be more dependent on imported gas in the future and the use of the Internet for energy marketing and transactions is increasing.
There have also been major corporate changes - Innogy has agreed a takeover by RWE of Germany, Powergen has agreed a takeover by E.ON of Germany and Eléctricité de France, which already owns LE Group, is in the process of acquiring Seeboard PLC.
Forecasts based on transmission companies estimates, show that UK electricity demand is expected to grow from 346.6 TWh in 2001/02 to 360.0 TWh in 2005/06, a growth of 3.9%.
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