Electricity Distribution in the UK Industry Market Research Report Now Updated by IBISWorld

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As economic conditions improve, demand for electricity is expected to increase, particularly from manufacturers and households. Increasing electricity prices are also expected to positively affect industry revenue. For these reasons, industry research firm IBISWorld has updated its report on the Electricity Distribution industry.

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The total revenue of the Electricity Distribution industry is expected to expand at a compound annual rate of 2.6% over the five years through 2013-14. Higher prices have more than offset a fall in the volume of electricity transported along the low-voltage distribution network. These prices reflect the investment that is necessary to bring the industry's ageing and growing infrastructure up to date. According to IBISWorld industry analyst Lewis Sutton, “Industry revenue is expected to increase by a further 0.4% to £5.6 billion in 2013-14.” Electricity distribution businesses are regional monopolies, so their pricing is heavily regulated by the Office of the Gas and Electricity Markets (Ofgem). Ofgem aims to act on behalf of consumers, while ensuring that distributors receive a fair return. As a result of this regulation, profit margins do not vary much from year to year.

The Electricity Distribution industry has a high level of market share concentration. The 15 electricity distribution licences covering the United Kingdom (14 in Great Britain and one in Northern Ireland) are held by seven firms. The four largest of these businesses generate a large share of industry revenue, and each hold multiple distribution licences. The industry is estimated to employ 10,406 people and pay £574.7 million in wages in 2013-14. There are seven firms involved in distributing electricity, covering 15 distribution areas in the United Kingdom (14 in Great Britain and one in Northern Ireland). A number of these firms generate electricity and some are involved in both transmitting and distributing electricity. Some firms also distribute or transmit natural gas. “The volume of electricity distributed in 2013-14 is expected to be about 336,922 gigawatt hours, compared with 350,445 gigawatt hours in 2008-09,” says Sutton. The reduction reflects the economic recession and the negative effect of higher prices on consumption.

Over the five years through 2018-19, revenue is projected to rise due to somewhat firmer demand as economic conditions improve, and increasing demand from both manufacturers and households. Revenue will also be pushed up by further price rises to finance the capital investment required to refurbish ageing parts of the network. As costs and prices will both increase, profit margins are expected to remain fairly stagnant.

For more information on the Electricity Distribution 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 operate the low-voltage electricity distribution networks that carry power from high-voltage transmission lines to end users.

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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