Table of Contents
Executive Summary
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- The market
- Gross capital spending driven by asset replacement and refurbishment activity
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- Figure 1: UK gross capital expenditure by the electricity distribution network operators, 2008/09-2012/13
- Major variations in gross capital spending by geographical area
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- Figure 2: UK gross capital expenditure by the electricity distribution network operators, by company, 2008/09-2012/13
- Non-load related capital spending to dominate network investment between 2015 and 2023, reflecting asset replacement requirements
- Innovation to focus on smart grid technologies to facilitate the transition to a low-carbon economy
- Low Carbon Network Fund provides support to DNOs to trial new technologies
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- Figure 3: Forecast network investment of the electricity distribution network operators in Great Britain, 2015/16-2022/23
- Electricity supply market dominated by the ‘big six’ energy suppliers, with a combined market share of more than 90%
- Average dual fuel bills more than doubled over the last 10 years
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- Figure 4: Breakdown of average domestic electricity household bill, as of January 2013
- Roll-out of smart meters at centre of key changes to energy supply markets over the next few years
- Market factors
- DNOs subject to price controls set by industry regulator Ofgem
- Decarbonisation of UK economy to increase loads placed on distribution network
- Renewables Obligation leading to rise in Distributed Generation
- Renewable Heat Incentive (RHI) promotes take-up of heat pumps
- Energy Company Obligation (ECO) scheme and Green Deal
- Ofgem market review – Reforming the electricity retail market
- Companies
- Electricity distribution Industry
- Introduction of competition in network connections
- Electricity supply Industry
- Proposed CMA investigation could lead to break-up of ‘big six’ energy suppliers
- What we think
Introduction
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- Definitions
- Methodology
- Abbreviations
- Market positioning
- Great Britain
- Northern Ireland
Economy
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- Inflation
- Interest rates
- Business investment
Market Factors
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- Price controls
- Environmental and legislative factors
- Climate Change Programme (including Climate Change Levy and Agreement)
- Carbon Plan
- Green Deal & Energy Company Obligation (ECO)
- Ofgem Retail Market Review
- Electricity Market Reform
- Renewables obligation
- The Renewable Heat Incentive
- Combined Heat and Power
Distribution Industry Structure
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- Key points
- Industry overview
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- Figure 5: Ownership of the distribution network operators in the UK, as of May 2014
- Regional electricity demand
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- Figure 6: Electricity consumed in Great Britain, by region, 2012
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- Figure 7: Regional proportional importance of electricity consumed in Great Britain, 2012
- Electricity consumption by end-use sector
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- Figure 8: Analysis of electricity usage, by type of industry, UK, 2005-12
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- Figure 9: Analysis of electricity usage, by the commercial sector, 2008-12
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- Figure 10: Analysis of electricity usage graph, by the commercial sector, 2008-12
- Scotland
- Northern Ireland
Electricity Distribution Sector Overview
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- Key points
- Overview
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- Figure 11: Distribution network operators in Great Britain, by region, 2014
- Size of UK distribution networks
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- Figure 12: UK distribution networks, 2012/13
Electricity Distribution Market Trends
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- Key points
- Introduction of Competition in Network Connections
- Trends in UK Electricity Supply
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- Figure 13: Analysis of electricity supply in the UK, 2009-13
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- Figure 14: Analysis of electricity supplied in the UK, by type of fuel used in generation, 2009-13
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- Figure 15: Analysis of electricity supplied in the UK, by type of fuel used in generation, 2013
- Smart Grid Development to Support Low Carbon Economy
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- Figure 16: Renewable electricity generation in the UK, 2009-13
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- Figure 17: Renewable electricity generation in the UK graph, 2009-13
- Distribution Price Control Review
- The Low Carbon Network Fund (LCN)
- Electricity North West
- Northern Powergrid
- SP Energy Networks
- SSE
- UK Power Networks
- Western Power Distribution
Electricity Supply Sector Overview
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- Key points
- Market background
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- Figure 18: Proportion of domestic electricity customers by supplier type, by region, 2000 and 2012
Electricity Supply Market Issues
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- Key points
- Rise in Energy Bills and Dominance of the ‘Big Six’ Suppliers
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- Figure 19: Breakdown of average domestic electricity household bill, as of January 2013
- Figure 20: Breakdown of average domestic electricity household bill graph, as of January 2013
- Increased Competition from Smaller Suppliers
- Smart Meter Roll-out
Capital Expenditure
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- Key points
- Capital expenditure
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- Figure 21: UK gross capital expenditure by the electricity distribution network operators, 2008/09-2012/13
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- Figure 22: UK gross capital expenditure by the electricity distribution network operators graph, 2008/09-2012/13
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- Figure 23: UK gross capital expenditure by the electricity distribution network operators, by company, 2008/09-2012/13
- Forecast capital expenditure
- Capital spending during price control period 2010-15 focussed on asset replacement
- New price control framework based on Revenue = Incentives+Innovation+ Outputs to come into effect from April 2015
- Maintain reputational incentive for business carbon footprint (BCF)
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- Figure 24: Proposed total expenditure for RIIO-ED1 in Great Britain, by company, 2015/16-2022/23
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- Figure 25: Proposed total expenditure for RIIO-ED1 in Great Britain graph, by company, 2015/16-2022/23
- Figure 26: Forecast network investment of the electricity distribution network operators in Great Britain, by company, 2015/16-2022/23
- DNOs
- Western Power Distribution
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- Figure 27: Core activity costs by Western Power Distribution, by type, 2011-15 and 2016-23
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- Figure 28: Asset replacement expenditure by Western Power Distribution, by type and company, 2016-23
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- Figure 29: Capital expenditure planned by Western Power Distribution for the West Midlands, by type, 2016-21
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- Figure 30: Capital expenditure planned by Western Power Distribution for the East Midlands, by type, 2016-21
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- Figure 31: Capital expenditure planned by Western Power Distribution for South Wales, by type, 2016-21
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- Figure 32: Capital expenditure planned by Western Power Distribution for the South West, by type, 2016-21
- UK Power Networks
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- Figure 33: Activity costs by UK Power Networks, 2011-15 and 2016-23
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- Figure 34: Activity costs by UK Power Networks graph, 2011-15 and 2016-23
- Figure 35: Asset investment by UK Power Networks, by type, 2011-15 and 2016-23
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- Figure 36: Capital expenditure planned by London Power Networks, by type, 2016-21
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- Figure 37: Capital expenditure planned by Eastern Power Networks, by type, 2016-21
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- Figure 38: Capital expenditure planned by South Eastern Power Networks, by type, 2016-21
- Northern Powergrid
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- Figure 39: Activity costs by Northern Powergrid, by type, 2011-15 and 2016-23
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- Figure 40: Comparison of average annual activity costs by Northern Powergrid, 2011-15 and 2016-23
- Figure 41: Network investment by Northern Powergrid, by type, 2011-15 and 2016-23
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- Figure 42: Capital expenditure by Northern Powergrid (Northeast), by type, 2011-15
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- Figure 43: Capital expenditure planned by Northern Powergrid (Northeast), by type, 2016-21
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- Figure 44: Capital expenditure by Northern Powergrid (Yorkshire), by type, 2011-15
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- Figure 45: Capital expenditure planned by Northern Powergrid (Yorkshire), by type, 2016-21
- SP Energy Networks
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- Figure 46: Activity costs by SP Energy Networks, 2011-15 and 2016-23
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- Figure 47: Comparison of average annual activity costs by SP Energy Networks, 2011-15 and 2016-23
- Figure 48: Asset replacement expenditure by SP Energy Networks, by asset type, 2016-23
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- Figure 49: Capital expenditure planned by SP Distribution, by type, 2011-15 and 2016-23
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- Figure 50: Capital expenditure planned by SP Manweb, by type, 2011-15 and 2016-23
- Electricity North West
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- Figure 51: Activity costs by Electricity North West, by type, 2011-15 and 2016-23
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- Figure 52: Comparison of average annual activity costs by Electricity North West, 2011-15 and 2016-23
- Figure 53: Asset investment by Electricity North West, by type, 2011-15 and 2016-23
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- Figure 54: Planned expenditure by Electricity North West, by type, 2014-21
- Scottish and Southern Energy Power Distribution
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- Figure 55: Core activity costs by Scottish and Southern Energy Power Distribution, by type, 2011-15 and 2016-23
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- Figure 56: Comparison of average annual activity costs by Southern Energy Power Distribution, 2011-15 and 2016-23
- Figure 57: Asset Investment by Scottish and Southern Energy Power distribution, by type, 2011-15 and 2016-23
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- Figure 58: Capital expenditure planned by Scottish Hydro Energy Power Distribution, by type, 2016-23
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- Figure 59: Capital expenditure planned by Southern Energy Power Distribution, by type, 2016-23
- Northern Ireland Electricity
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- Figure 60: Capital expenditure by NIE Transmission and Distribution, 2008/09-2012/13
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- Figure 61: Capital expenditure determination for NIE Transmission and Distribution, 2012/13-2016/17
Company Profiles Introduction
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- Key points
Western Power Distribution
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- Western Power Distribution (East Midlands)
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- Figure 62: Financial analysis of Western Power Distribution (East Midlands), 2008-13
- Western Power Distribution (West Midlands)
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- Figure 63: Financial analysis of Western Power Distribution (West Midlands), 2008-13
- Western Power Distribution (South West)
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- Figure 64: Financial analysis of Western Power Distribution (South West), 2009-13
- Western Power Distribution (South Wales)
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- Figure 65: Financial analysis of Western Power Distribution (South Wales), 2008-12
UK Power Networks
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- UK Power Networks: Eastern Power Networks
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- Figure 66: Financial analysis of Eastern Power Networks, 2008-12
- UK Power Networks: London Power Networks
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- Figure 67: Financial analysis of London Power Networks, 2008-12
- UK Power Networks: South Eastern Power Networks
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- Figure 68: Financial analysis of South Eastern Power Networks, 2008-12
Northern Powergrid
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- Northern Powergrid (Northeast)
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- Figure 69: Financial analysis of Northern Powergrid (Northeast), 2009-13
- Northern Powergrid (Yorkshire)
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- Figure 70: Financial analysis of Northern Powergrid (Yorkshire), 2009-13
SP Distribution
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- SP Manweb
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- Figure 71: Financial analysis of SP Manweb, 2008-12
- SP Distribution (South & Central Scotland)
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- Figure 72: Financial analysis of SP Distribution, 2008-12
SSE
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- Figure 73: Financial analysis of SSE, 2009-13
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- Figure 74: Turnover analysis of SSE, by business segment, 2012-13
- Southern Electric Power Distribution
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- Figure 75: Financial analysis of Southern Electric Power Distribution, 2009-13
- Scottish Hydro Electric Power Distribution
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- Figure 76: Financial analysis of Scottish Hydro Electric Power Distribution, 2008-13
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Electricity North West
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- Figure 77: Financial analysis of Electricity North West, 2009-13
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Northern Ireland Electricity
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- Figure 78: Financial analysis of Northern Ireland Electricity, 2010-13
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British Gas Trading
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- Figure 79: Financial analysis of British Gas Trading, 2008-12
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EDF Energy
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- Figure 80: Financial analysis of EDF Energy, 2008-12
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NPower
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- Figure 81: Financial analysis of Npower, 2008-12
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E.ON Energy
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- Figure 82: Financial analysis of E.ON Energy Solutions, 2008-12
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- Figure 83: Turnover breakdown for E.ON, 2012
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Scottishpower Energy Retail
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- Figure 84: Financial analysis of ScottishPower Energy Retail, 2008-12
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First Utility
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- Figure 85: Financial analysis of First Utility, 2008-12
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Further Sources and Contacts
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- Trade associations and regulatory bodies
- Trade magazines
- Trade exhibitions
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