United Kingdom Power Report

Published 20 February 2015

  • 97 pages
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$1,295.00
United Kingdom Power Report

BMI View: An unpredictable shift to a multi-party political system following the 2015 general election w ill cloud UK energy policy and risks undermining investment in much-needed new power capacity. The successful completion of the UK's first capacity auction creates some upside to our forecasts over the long term, but fears of a capacity crunch will persist until this comes into effect in 2018/2019.

Political interference in the UK's power market remains one of the biggest threats to the outlook for domestic utilities - and we expect investment decisions to be further complicated by political posturing in the run up to the May 2015 general election. The outcome of the election remains too close to call as the UK undergoes a once-in-a-generation shift to a multi-party political system that will make coalition politics more common. This new era of coalition politics - and the unpredictability of the election result - makes deciphering the UK's future energy policy and establishing a long-term investment strategy increasingly difficult; it also risks deterring much-needed investment in new generation capacity.

Uncertainty over energy policy will dominate our UK power sector coverage and is only likely to grow worse over the next two years. The results of an ongoing Competition and Markets Authority (CMA) probe into the UK's 'Big Six' energy companies, which could lead to the break-up of some vertically integrated utilities, is set to run until end-2015. In addition, the opposition Labour Party is preparing to intervene in the power market to drive down retail electricity prices and has promised a 20-month electricity price freeze should it win the election. A potential referendum on membership of the European Union in the event that the Conservatives remain in power could also stall investment in new power capacity through to 2017.

These factors will weigh on the share prices of UK utilities. We maintain that - from a purely utility-focused perspective -...

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
12
United Kingdom Snapshot
12
Table: Country Snapshot: Economic and Demographic Data (United Kingdom 2013-2018)
12
Table: Country Snapshot: Economic and Demographic Data (United Kingdom 2018-2023)
12
Table: Country Snapshot: Power Sector
12
United Kingdom Power Forecast Scenario
13
Electricity Generation and Power Generating Capacity
13
Table: Total Electricity Generation Data And Forecasts (United Kingdom 2012-2017)
13
Table: Total Electricity Generation Data And Forecasts (United Kingdom 2018-2023)
14
Table: Electricity Generating Capacity Data And Forecasts (United Kingdom 2012-2017)
16
Table: Electricity Generating Capacity Data And Forecasts (United Kingdom 2018-2023)
16
Table: Key Components Of The Energy Bill
19
Table: 'Big Six' Energy Companies - Aggregate Profit Margin By Segment (%)
21
Table: The Hinkley Point Consortium
34
Table: UK Planned Nuclear Projects
37
Electricity Consumption
39
Table: Total Electricity Consumption Data And Forecasts (United Kingdom 2012-2017)
39
Table: Total Electricity Consumption Data And Forecasts (United Kingdom 2018-2023)
39
Transmission & Distribution, Imports & Exports
40
Table: Electric Power T&D Losses Data And Forecasts (United Kingdom 2012-2017)
40
Table: Electric Power T&D Losses Data And Forecasts (United Kingdom 2018-2023)
40
Table: Trade Data And Forecasts (United Kingdom 2012-2017)
40
Table: Trade Data And Forecasts (United Kingdom 2018-2023)
40
Industry Risk/Reward Ratings
43
North America And Western Europe Power Risk/Reward Ratings
43
Table: North America And Western Europe Power Risk/Reward Ratings (Scores Out Of 100)
49
United Kingdom Power Risk/Reward Ratings
51
Rewards
51
Risks
51
Market Overview
53
Key Policies And Market Structure
53
Regulation and Competition
53
Table: Key Components Of The Energy Bill
55
Sustainable Energy Policies
56
Pricing
57
United Kingdom Power Projects Database
59
Competitive Landscape
67
EDF Energy
67
The National Grid Company
67
E
68
RWE npower
68
SSE
69
Scottish Power
70
Centrica
70
Company Profile
72
EDF Energy
72
Regional Overview
77
North America And Western Europe Regional Overview
77
Glossary
85
Table: Glossary Of Terms
85
Methodology
86
Methodology And Sources
86
Industry Forecast Methodology
86
Sources
89
Risk/Reward Ratings Methodology
89
Table: Power Risk/Reward Rating Indicators
90
Table: Weighting Of Indicators
92

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.

Key Benefits

  • 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.

Coverage

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,

Market Overview

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.

Competitive Landscape

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.

Regional Overview

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.

Sources

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).

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc