Sparking growth: Support for renewable energy has encouraged revenue and enterprise growth

Electricity production is the first phase in the process of delivering electricity to consumers, and is followed by transmission, distribution and trade. The composition of UK electricity generation has undergone substantial change in recent years, as government initiatives have incentivised a shift to renewable electricity generation in pursuit of emissions targets. According to data from the Office for National Statistics, natural gas was the primary source of electricity generation in 2018, at 39.4% of total electricity produced, followed by renewables at 33.3%, nuclear power at 19.5% and coal at just 5%...read more.

Industry Statistics & Market Size
Revenue
£20.5bn
Annual Growth 15-20
3.5%
Forecast Growth 20-25
Profit
Employment
34,516
Businesses
188

Industry Threats & Opportunities

  • Revenue is expected to sink in the current year, partly due to falling wholesale electricity prices
  • Age-related maintenance requirements have increased cost for nuclear power generators
  • Opportunities in renewable energy generation are expected to encourage the entry of new firms
  • Industry Report - Starting a New Business Chapter

    Firms wishing to enter the Electricity Production industry face high barriers to entry. The main barrier to entry is high start-up costs. A large amount of capital is necessary to purchase or construct electricity-generating facilities. Production is dominated by a limited number of large establishments, which each generate high output, and a new entrant would have to ensure a high output in order to remain profitable. Larger industry players tend to be vertically integrated and therefore benefit from economies of scale and scope, which makes entry difficult for potential entrants.Regulation limits the amount of greenhouse gas emissions released by each establishment and non-compliance can result in hefty sanctions. Fossil fuels are known to release the most emissions. As ...purchase to read more.

    Additional Insights for the Electricity Production Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Electricity Production Industry are

  • Ability to accommodate environmental requirements
  • Optimum capacity utilisation
  • Superior financial management and debt management
  • IBISWorld analysts also discuss how external factors such as EUA prices and Total electricity consumption in the Electricity Production industry impact industry performance..

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    What's in this report

    What is the Electricity Production Industry?

    Firms in this industry produce electricity by burning fossil fuels such as gas and coal. They also operate nuclear power stations, hydroelectric plants and stations fuelled by renewable sources such as wind or biomass.

    Industry Products
  • Gas-fired electricity
  • Coal-fired electricity
  • Nuclear power
  • Wind and solar photovoltaics
  • Oil and other
  • Biomass
  • Hydro
  • Industry Activities
  • Generating electricity in gas-fired plants
  • Generating electricity in coal-fired plants
  • Generating nuclear power
  • Generating hydroelectric power
  • Generating electricity from renewable sources such as wind, solar and biomass
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • EUA prices
  • Total electricity consumption
  • World price of natural gas
  • World price of steaming coal

  • Current Performance
  • Energy sources
  • Nuclear impact
  • Carbon concerns
  • Renewing revenue
  • Chart: Revenue Growth

  • Industry Outlook
  • Cleaning up
  • Nuclear growth
  • International connections
  • Table: Electricity Production Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Electricity Production Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Electricity Transmission

  • Key Selling Industries
  • Crude Petroleum & Natural Gas Extraction
  • Hard Coal Mining
  • Nuclear Fuel Processing

  • Products & Services
  • Gas-fired electricity
  • Wind and solar photovoltaics
  • Nuclear power
  • Biomass
  • Coal-fired electricity
  • Oil and other
  • Hydro
  • Chart: Electricity Production Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Households
  • Manufacturing industries
  • Commercial operators
  • Public administration establishments
  • Transport industries
  • Other
  • Chart: Major Market Segmentation for the Electricity Production Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitProfit has fluctuated over the past five-year period, reflecting changes in the relative cost of generation by different technologies. In 2018-19, operating profit is estimated to average 2% of revenue, down from 2.7% in 2014-15. Margins have been under pressure due to the rising price of carbon, particularly for operators using fossil fuels. A number of operators are expected to have recorded a loss in 2015-16, following the Carbon Price Floor (CPF) hike in April 2015. Margins remained under pressure in the following year and throughout the remainder of the period, as operators were faced with higher depreciation and amortisation costs, driven by the closure of previously profitable power plants and increased investment. However, an increase in automation has enabled operators to reduce wage costs and supported profit growth. Additionally, operating costs associated with renewable electricity generation have recorded a notable decline in the latter part of the period, aiding the growing number of operators that have opted to focus on renewable generation. PurchasesDepreciationWagesOther
  • Chart: Cost Structure Benchmarking – Sector vs Electricity Production

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Electricity Production Industry

  • Industry Globalization
    Drax Power Limited, EDF Energy Holdings Ltd, SSE plc, RWE AG,
  • Table: Drax Power Limited - financial performance
  • Table: EDF Energy Holdings Ltd - financial performance
  • Table: SSE plc - financial performance
  • Table: RWE AG - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Electricity Production Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Electricity Production Industry
    Includes:
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Marketing (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Carbon Capture And Storage
  • A process that extracts carbon dioxide before or after fuel is burned. It is then stored underground or under the sea.
  • Combined-Cycle Gas Turbine (Ccgt)
  • Electricity generating turbines that use waste heat from the gas-firing process to produce more electricity.
  • Photovoltaics
  • A method of converting solar energy into electricity.
  • Steaming Coal
  • Also known as thermal coal, steaming coal is coal used for its heating value, typically in electricity generation.
  • Terawatt-Hour
  • A unit of electrical energy. One terawatt-hour is equal to a sustained power of approximately 114 megawatts for a period of one year.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Electricity Production market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Electricity Production:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Electricity Production market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Electricity Production, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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