Chilly returns: Falling energy consumption and stricter regulations lead to declining revenue

Operators in the Gas Distribution industry maintain a 284,000 km gas pipeline network across the United Kingdom. The industry is primarily comprised of eight Gas Distribution Networks (GDNs) across Great Britain, owned by four companies which operate regional monopolies. To protect consumers, operators are heavily regulated through price control frameworks. There are also eight smaller networks operated by independent gas transporters (IGTs) that primarily connect new build homes and industrial sites to existing networks, while a further two IGTs operate the Northern Ireland distribution more.

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

Industry Threats & Opportunities

  • Regulations to reduce household energy bills have negatively affected industry revenue
  • Severe weather conditions in March 2018 increased operating costs, negatively affecting profit margins
  • The shift towards a low-carbon economy is expected to curtail demand
  • Industry Report - Industry Investment Chapter

    The Gas Distribution industry is highly capital intensive. For every £1.00 that industry players spend on capital, they are expected to spend 87p on labour. Depreciation is a substantial cost item due to the high level of capital spending required to both maintain and expand gas distribution networks. The Energy Networks Association has estimated that gas network companies replace 4,200 kilometres of gas mains per year, the equivalent of Britain's entire motorway network. Capital investment is expected to remain high and possibly even increase further over the coming years.The level of employment is low compared with many other industries. Labour is mainly needed to monitor the network and to repair it when problems arise. Emp...purchase to read more.

    Additional Insights for the Gas Distribution Industry

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

  • Effective cost controls
  • Ability to manage external (outsourcing) contracts
  • Ability to negotiate successfully with regulator
  • IBISWorld analysts also discuss how external factors such as Average maximum temperature and Consumer price index in the Gas Distribution industry impact industry performance..

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    What's in this report

    What is the Gas Distribution Industry?

    Firms in this industry operate the low-pressure gas distribution mains that carry gas from high-pressure transmission pipelines to end users.

    Industry Products
  • Gas distribution
  • Industry Activities
  • Operating low-pressure gas main distribution systems
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Average maximum temperature
  • Consumer price index
  • Number of households
  • year bond rate
  • Downstream demand from manufacturing

  • Current Performance
  • Industry structure
  • Financial performance
  • Declining consumption
  • Innovation
  • Chart: Revenue Growth

  • Industry Outlook
  • Renewable growth
  • Changes in the pipeline
  • Table: Gas Distribution Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Gas Distribution Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Manufacturing
  • Wholesale and Retail Trade
  • Accommodation and Food Service Activities
  • Public Administration and Defence; Compulsory Social Security
  • Consumers

  • Key Selling Industries
  • Consultant Engineering Services
  • Pipeline Transport

  • Products & Services
  • Gas distribution
  • Other
  • Chart: Gas Distribution Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Households
  • Manufacturing and industrial premises
  • Commercial and government premises
  • Other
  • Chart: Major Market Segmentation for the Gas Distribution Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Gas Distribution

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Gas Distribution Industry

  • Industry Globalization
    Cadent Gas Ltd, Scotia Gas Networks Ltd, Wales & West Utilities Limited, Northern Gas Networks Ltd,
  • Table: Cadent Gas Ltd - financial performance
  • Table: Scotia Gas Networks Ltd - financial performance
  • Table: Wales & West Utilities Limited - financial performance
  • Table: Northern Gas Networks Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Gas Distribution 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 Gas Distribution 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
    Northern Ireland Authority For Utility Regulation
  • The NIAUR is the industry regulator in Northern Ireland.
  • Office Of Gas And Electricity Markets (Ofgem)
  • The regulator of gas distributors in Great Britain. Ofgem sets the prices that distributors can charge for their services.
  • Riio-Gd1
  • The first gas distribution price control review to use the Revenue = Incentives+Innovation+Outputs model, enforced by Ofgem.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Gas Distribution 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 Gas Distribution:
    • 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 Gas Distribution 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 Gas Distribution, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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