Dim the lights: Revenue is likely to sink as firms cut costs to offer customers better value

Operators in the Electricity Distribution industry maintain a network of over 281,000 kilometres of lines and cables across the United Kingdom. Electricity Distribution Network Operators (DNOs) have regional monopolies, so pricing in the industry is heavily regulated by the Office of Gas and Electricity Markets (Ofgem) in the United Kingdom and the Northern Ireland Authority for Utility Regulation (NIAUR) in Northern Ireland. Regulators have reduced revenue allowances in recent years, which has led to industry revenue decreasing at a compound annual rate of 1.4% over the five years through 2018-19. There are also 14 Independent Distribution Network Operators (IDNOs) in the United Kingdom. IDNOs primarily connect new housing, commercial and industrial premises to existing networks...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • The number of IDNOs has grown rapidly as Ofgem encourages competition in the industry
  • Smart meters are allowing users to monitor and be more conservative with their energy usage
  • Heavy investment may be needed to update network infrastructure for the use of smart technology
  • Industry Report - Starting a New Business Chapter

    The Electricity Distribution industry has high barriers to entry. The most prominent barrier to entering this industry is the requirement to secure an electricity distribution licence. However, the regulatory environment is slightly more relaxed for independent distributors than for the bigger Distribution Network Operators (DNOs), as demonstrated by the number of new enterprises entering the industry in recent years. As DNO licences are tied to specific distribution areas, acquiring a licence essentially means purchasing the existing operator. Any acquisition of this kind would be subject to approval from the regulatory authorities. Aut...purchase to read more.

    Additional Insights for the Electricity Distribution Industry

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

  • Effective cost controls
  • Superior financial management and debt management
  • Ability to manage external (outsourcing) contracts
  • IBISWorld analysts also discuss how external factors such as Housing starts and Average maximum temperature in the Electricity Distribution industry impact industry performance..

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    What's in this report

    What is the Electricity Distribution Industry?

    Firms in this industry operate the low-voltage electricity distribution networks that carry power from high-voltage transmission lines to end users.

    Industry Products
  • Electricity distribution
  • Industry Activities
  • Operating electricity distribution systems
  • Maintaining and expanding distribution networks
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Housing starts
  • Average maximum temperature
  • Number of households
  • Total electricity consumption
  • Downstream demand from manufacturing

  • Current Performance
  • Lower charges
  • Smart consumption
  • Surges in demand
  • Chart: Revenue Growth

  • Industry Outlook
  • Network upgrades
  • Regulator pressure
  • Table: Electricity Distribution Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Electricity Supply

  • Key Selling Industries
  • Consultant Engineering Services
  • Electricity & Telecommunications Infrastructure Construction

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

  • Demand Determinants
    Major Markets
  • Households
  • Commercial and public administration premises
  • Manufacturing and industrial premises
  • Other
  • Chart: Major Market Segmentation for the Electricity 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 Electricity Distribution

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

  • Industry Globalization
    UK Power Networks Holdings Ltd, Western Power Distribution plc, SSE plc, Northern Powergrid Holdings Company, ScottishPower Ltd, Electricity North West Ltd,
  • Table: UK Power Networks Holdings Ltd - financial performance
  • Table: Western Power Distribution plc - financial performance
  • Table: SSE plc - financial performance
  • Table: Northern Powergrid Holdings Company - financial performance
  • Table: ScottishPower Ltd - financial performance
  • Table: Electricity North West Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Electricity 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 Electricity Distribution Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Distributed Generation
  • An electricity generating plant that is connected to a distribution network, rather than the transmission network.
  • Riio-Ed1
  • The first electricity distribution price control review to use the Revenue = Incentives + Innovation + Outputs model, enforced by Ofgem.
  • Smart Meter
  • A meter that records how much electricity is being consumed and communicates the results back to the utility company.
  • What Our Customers Say

    Why buy this report?

    The Electricity Distribution market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    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 Electricity 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 Electricity 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 Electricity Distribution, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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