Electricity Production in the UK Industry Market Research Report now updated by IBISWorld

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The Electricity Production industry is expected to generate revenue of about £16 billion in 2012-13, compared with £15.5 billion five years earlier. The revenue expansion, at an annualised 0.7%, is occurring as higher prices slightly more than offset lower electricity production. Higher electricity prices and the small increase in production are expected to push up industry revenue by 3.4% in 2012-13. Stronger economic growth is forecast for the next five years, which will lift both demand and supply of electricity. At the same time, electricity prices are expected to rise due to higher fuel prices and the increased penetration of more costly generation from renewables. Ageing nuclear facilities will begin closing, as will the more emissions-intensive and expensive coal-fired plants. The industry faces the challenge of constructing sufficient new capacity to meet demand. Overall, industry revenue is forecast to grow over the five years through 2017-18. For these reasons, industry research firm IBISWorld has updated its report on the Electricity Production industry.

IBISWorld Market Research

IBISWorld Market Research

Revenue will grow due to rising prices and increased demand

The Electricity Production industry is expected to generate revenue of about £16 billion in 2012-13, compared with £15.5 billion five years earlier. The revenue expansion, at an annualised 0.7%, is occurring as higher prices slightly more than offset lower electricity production. Total electricity generation is expected to be 375,624 gigawatt hours in 2012-13, up 0.4% on the previous year. However, electricity production fell during some years as weak economic activity and higher electricity prices cut demand for power, especially from industrial users. According to IBISWorld industry analyst Marina Williams-Wynn, “higher electricity prices and the small increase in production are expected to push up industry revenue by 3.4% in 2012-13”.

Gas is the most important fuel for power generation in the United Kingdom, followed by coal and nuclear energy. Production from renewable energy sources has been expanding strongly, mainly from wind and plant matter (biomass), and is expected to continue doing so as the United Kingdom strives to cut its carbon dioxide emissions. Only small amounts of electricity are imported (mainly from France) or exported (mainly to the Republic of Ireland). Limited trade means that the size of the domestic market, at £16 billion, is similar to industry revenue. The industry is expected to employ 20,400 people in 2012-13, paying wages of £824.6 million. There are 440 establishments and 43 enterprises operating in the industry.

Stronger economic growth is forecast for the next five years, which will lift both demand and supply of electricity. At the same time, electricity prices are expected to rise due to higher fuel prices and the increased penetration of more costly generation from renewables. Ageing nuclear facilities will begin closing, as will the more emissions-intensive and expensive coal-fired plants. Williams-Wynn adds, “the industry faces the challenge of constructing sufficient new capacity to meet demand”. Overall, industry revenue is forecast to grow over the five years through 2017-18.

The Electricity Production industry has a medium level of market share concentration with the four largest industry participants accounting for about 49.7% of the electricity produced in the United Kingdom. Major companies include EDF Group, Scottish and Southern Energy, E.ON, RWE and Drax Group.

For more information on the Electricity Production industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

Firms in this industry produce electricity by burning fossil fuels such as coal and gas. They also operate nuclear power plants and hydroelectric plants by using a variety of renewable energy sources (mainly wind and plant matter, which is also known as biomass).
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.

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Gavin Smith
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