Heavy resistance: Significant regulation and tough operating conditions have reduced revenue

The Electricity Supply industry has developed considerably since its liberalisation in 1999. The market is regulated by Ofgem in Britain and by NIAUR in Northern Ireland. Overall electricity consumption has decreased over recent years, as high energy prices, energy efficient appliances and the roll-out of smart metering encouraged lower energy consumption to reduce bills. Lower consumption has weighed on industry revenue over the past five years. Over the five years through 2019-20, industry revenue is expected to contract at a compound annual rate of 1.9%, including a forecast decline of 0.7% in the current year, to reach £32.8 billion.Ofgem has stepped up its efforts to create a more competitive energy sector over the past five years...read more.

Industry Statistics & Market Size
Annual Growth 15-20
Forecast Growth 20-25

Industry Threats & Opportunities

  • Difficult operating conditions have reduced revenue and caused enterprise numbers to fall
  • Although Ofgem raised the price cap recently, tariff regulation has negatively affected revenue
  • The UK's exit from the European Union could cause considerable upheaval regarding the Internal Energy Market
  • Industry Report - Industry Investment Chapter

    The Electricity Supply industry has a high level of capital intensity. For every £1.00 that operators spend on capital, 48p is spent on labour. The industry actually has a very low level of spending on both capital and labour. The industry’s major capital expense relates to the IT systems needed to administer customer acquisitions, manage customer information, bill customers and manage cash collection. The industry’s major outlay relates to electricity purchased for sale to retail customers...purchase to read more.

    Additional Insights for the Electricity Supply Industry

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

  • Ensuring pricing policy is appropriate
  • Ability to effectively manage risk
  • Must have licence
  • IBISWorld analysts also discuss how external factors such as Total electricity consumption and Industrial production index in the Electricity Supply industry impact industry performance..

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    What's in this report

    What is the Electricity Supply Industry?

    Operators in this industry purchase electricity from generators and sell it to households and businesses.

    Industry Products
  • Electricity retailing
  • Industry Activities
  • Selling electricity to end users
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Total electricity consumption
  • Industrial production index
  • Real household disposable income
  • Total use of renewable and waste energy sources
  • EUA prices

  • Current Performance
  • Power switch
  • A fair deal
  • Profit trends
  • Chart: Revenue Growth

  • Industry Outlook
  • Energy consumption
  • Electricity trade
  • Green energy
  • Table: Electricity Supply Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Bread & Bakery Goods Production
  • Paper & Paperboard Manufacturing
  • Supermarkets
  • Full-Service Restaurants

  • Key Selling Industries
  • Electricity Distribution
  • Electricity Production
  • Electricity Transmission

  • Products & Services
  • Electricity retailing
  • Other
  • Chart: Electricity Supply Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Households
  • Manufacturing industries
  • Commercial premises
  • Other consumers
  • Chart: Major Market Segmentation for the Electricity Supply Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesNetworkWagesOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Electricity Supply

  • Basis of Competition
  • Internal competition
  • External competition

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

  • Industry Globalization
    EDF Energy Holdings Ltd, Npower Group Ltd, SSE plc, Centrica plc, E.ON UK plc, Scottish Power UK plc,
  • Table: EDF Energy Holdings Ltd - financial performance
  • Table: Npower Group Ltd - financial performance
  • Table: SSE plc - financial performance
  • Table: Centrica plc - financial performance
  • Table: E.ON UK plc - financial performance
  • Table: Scottish Power UK plc - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Electricity Supply 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 Supply Industry
  • 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
    Dual Fuel
  • A contract where a customer purchases gas and electricity from the same supplier.
  • Niaur
  • Northern Ireland Authority for Utility Regulation, the government regulator for the gas and electricity markets in Ireland.
  • Ofgem
  • Office of Gas and Electricity Markets, the government regulator for gas and electricity markets in Great Britain.
  • Smart Meter
  • A meter that records users' consumption and then transmits the information to the utility supplier at regular intervals.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Electricity Supply market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    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 Supply:
    • 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 Supply 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 Supply, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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