Melbourne, Australia (PRWEB) July 29, 2013 -- In the five years through 2013-14, operators in the Electricity Distribution industry in Australia have expanded the scope of their activities. According to IBISWorld industry analyst Caroline Finch, “The positive relationship between the size of the industry's fixed capital formation and the industry's regulated pricing structures has supported revenue growth”. Revenue has increased at a compound annual rate of 7.7% to $27.5 billion, with growth of 5.0% forecast in 2013-14.
In the five years through 2013-14, network investment increased to meet rises in peak electricity demand. The ever-increasing presence of air conditioners in households in the past five years has expanded the theoretical volume of electricity the industry must be able to transport during peak demand events. Industry networks are built and regulated to ensure a safe supply of electricity, even at electricity demand peaks on the hottest of summer days. To match reliability standards set by regulatory bodies, electricity distributors have invested in extra capacity. “More resilient networks mean more capital expenditure, depreciation and maintenance costs,” says Finch. These costs are being passed on by the Electricity Distribution industry to end users through mounting charges for network access, as approved by regulators. The industry technically has a medium market share competition, as measured by the contribution to industry revenue of the four largest players. State and territory governments still play a large role in electricity distribution. Major players include Ergon Energy Corporation Limited, Ausgrid, SA Power Networks and Victoria Power Networks Pty Ltd.
In the five years through 2018-19, a number of changes are likely to affect the Electricity Distribution industry. The industry's revenue has grown in line with its contribution to electricity bills. Many of the characteristics of the current legislation regarding the industry are under review. The recommendations made so far concern the structure of investment incentives for National Electricity Market (NEM) participants. In addition, barriers to the privatisation of industry operations appear to be weakening. Privatisation has not been a feature of the industry for over a decade and would bring about a range of structural changes to its operations. The technology used for generating electricity is also changing, with renewables such as wind showing the fastest growth in terms of new installation. The growth of renewables, particularly the installation of small-scale solar power generation, is likely to challenge the structure of current electricity transport networks. The existing network is built to transfer electricity from generators to end users. New services may be required to support changing patterns in generation.
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 operate low voltage electricity distribution systems, including lines, poles, meters and wiring, that deliver electricity to final consumers.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld Inc.
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 every Australian industry. 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 Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
Gavin Smith, IBISWorld, 310-490-5973, [email protected]
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