BMI View: The UK's decision to leave the EU has had little impact on our already-muted forecasts for the UK power sector. Our forecasts for conventional power generation were already downbeat due to a failure to mobilise investment into new capacity - with economic and political uncertainty following the Brexit vote only serving to cement this prevailing view.
|e/f = BMI estimate/forecast. Source: EIA, National Sources, BMI|
|Generation, Total, TWh||315.170||315.500||317.770||319.910||322.170||318.130||320.890|
|Consumption, Net Consumption, TWh||302.3||305.4||306.3||307.2||307.8||308.6||309.5|
|Capacity, Net, MW||95,825.0||92,766.4||93,941.3||95,719.6||94,801.4||95,805.8||96,746.8|
Latest Updates & Structural Trends
The material impact of Brexit on our power forecasts - at this stage - is minimal. We do not anticipate major changes to regulation or climate targets (although meeting them remains a different matter) and maintain that electricity generation will grow by an annual average of just 0.3% between 2016 and 2025, with capacity growing by an annual average of 0.5% and consumption growing at 0.4%.
We have left our forecasts for generation and capacity unchanged because they already reflect a failure to mobilise investment into conventional generation capacity, which will ensure supply margins remain tight over the next few years. With few conventional power projects moving out of planning and into the construction phase, we have long argued that it is unclear as to how the government would realise its plans to draw GBP100bn into the power sector by the early 2020s - and Brexit has cemented this view.
We still expect the UK to follow through with plans to close all remaining coal capacity by 2025 as most remaining plans are about 50 years old and the best case for new nuclear capacity is it will be delayed further. In this environment, gas power generation remains the most viable alternative.
A major downside risk to our forecast is that investment in the conventional power sector now collapses completely, planned cross-border transmission links could be delayed and capacity margins narrow further as ageing capacity is taken offline without being replaced. The UK may be left with no other option than to extend the lives of remaining coal plants in the absence of other alternatives - reneging on its plan to shut all coal facilities by 2025.
The biggest upside is the new post-Brexit government, under the leadership of Prime Minister Theresa May, may decide to pursue fiscal stimulus measures in order to show the UK is still open for business and - with the government pushing ahead with flagship infrastructure projects such as Hinkley Point C and a new fleet of gas power plants.
The United Kingdom Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The United Kingdom Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for United Kingdom to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks United Kingdom's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in United Kingdom.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).