Rising electricity volumes and prices lead to strong industry revenue growth
Melbourne, Australia (PRWEB) August 21, 2012
The Electricity Distribution industry is expected to generate revenue of $56.5 billion in 2012-13, up from $35.4 billion in 2007-08. This equates to annualised growth of 9.8%. The gain reflects a combination of higher sales volumes and prices. According to IBISWorld industry analyst M. Williams, “industry revenue is expected to increase by 16.3% in 2012-13, mainly due to higher prices”. These will not only reflect the introduction of carbon pricing, which will increase the cost of electricity purchased for resale, but also higher spending on distribution and transmission networks, and the continued rollout of higher cost renewable generation.
The Electricity Distribution industry’s market share concentration is medium. In the past, the electricity sector was highly concentrated, with effectively only one producer or supplier operating in most states. Williams adds, “this situation has changed markedly, as separate power generation, transmission and distribution firms were split from single, vertically integrated utilities owned by state governments”. Major players in the industry include Origin Energy Limited, TRUenergy Holdings Pty Ltd, AGL Energy Limited, Electricity Retail Corporation, CHEDHA Holdings Pty Limited and Ergon Energy Corporation Limited.
The Electricity Distribution industry’s revenue is expected to grow on the back of firmer demand and higher prices over the next five years. A considerable part of this expansion will reflect measures to expand and improve the distribution network, and the introduction of a price on carbon. Electricity output is expected to increase over the five years through 2017-18. While stronger economic activity is expected to have a positive effect on demand, higher prices will likely work in the opposite direction. Profit is expected to grow more quickly than revenue as firms start to reap the gains of programs such as the rollout of smart meters.
For more information, visit IBISWorld’s Electricity Distribution report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry distribute and retail electricity. Electricity distribution involves operating low voltage power supply systems (consisting of lines, poles, meters and wires). Some firms may also act as electric power brokers or agents that arrange the sale of electricity via power distribution systems operated by others.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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