Table of Contents
Key Insights
-
- What does the shift towards total expenditure (Totex) and long-term outcomes in AMP6 mean for the water and sewerage industry?
- What are the key drivers for network investment by the electricity distribution network operators (DNOs)?
- What are the key drivers for investment and challenges facing the electricity transmission sector?
- Have Ofgem’s settlements for gas distribution networks for the price control period RIIO-GD1 been too generous?
Introduction
-
- Market factors
- Definitions
- Water & Sewerage
- Electricity Transmission
- Electricity Distribution
- Gas Distribution
- Gas Transmission
- Methodology
- Abbreviations
- Market positioning
- Customers
- Suppliers
- Market factors
UK Economy
-
- Overview
- Inflation
- Interest rates
- Business investment
Water & Sewerage Industry
-
- Key points
- Water & sewerage industry market factors
- Industry regulation
- Ofwat’s priorities are manifold and include:
- Legislative environment
- European Water Framework Directive (WFD)
- Urban Waste Water Treatment Directive (UWWTD)
-
- Figure 5: Sewerage treatment enhancement expenditure driven by UWWTD in England & Wales, 1990-15
-
- Figure 6: Sewerage treatment enhancement expenditure driven by UWWTD in England & Wales, 1990-2015
- The Drinking Water Directive
- Revised Bathing Water Directive
-
- Figure 7: UK coastal bathing water compliance with Bathing Water Directive for mandatory coliform standards, as of 2014
- Transfer of private sewers in England and Wales
-
- Figure 8: Capital expenditure on private sewers in England & Wales, by water and sewerage company, 2012-15
- The Flood and Water Management Act 2010
- Water Act 2014 to open up water and sewerage retail competition for all business customers in 2017
Water & Sewerage Capital Expenditure
-
- Key points
- Overview
-
- Figure 9: Total capital expenditure by water and sewerage companies in England & Wales, 2005-10 and 2010-15
-
- Figure 10: Total capital expenditure by water-only companies in England & Wales, 2005-2010 and 2010-2015
-
- Figure 11: Actual UK capital expenditure on water and sewerage services, 2009/10-2014/15
-
- Figure 12: UK capital expenditure on water and sewerage services, 2009/10-2013/14
-
- Figure 13: UK Capital Expenditure on Water and Sewerage Services, 2009/10-2013/14
- Sewerage-related capital expenditure
-
- Figure 14: Analysis of sewerage-related capital expenditure in England and Wales, by company, 2008/09-2013/14
-
- Figure 15: Analysis of sewerage-related capital expenditure, by water and sewerage companies in England and Wales, 2008/09-2013/14
- Figure 16: Analysis of sewerage capital expenditure in England and Wales by water and sewerage companies, by type, 2011/122013/14
- Water-related capital expenditure
-
- Figure 17: Analysis of water related capital expenditure, by water and sewerage companies in England and Wales, 2008/09-2013/14
-
- Figure 18: Analysis of water-related capital expenditure, by water and sewerage companies in England and Wales, 2008/09-2013/14
- Figure 19: Analysis of water capital expenditure in England & Wales, by water and sewerage companies, by purpose, 2013/14
-
- Figure 20: Analysis of water capital expenditure by water-only companies in England & Wales, by type, 2013/14
-
- Figure 21: Analysis of water capital expenditure in England and Wales, by water and sewerage companies, by type, 2011/12-2013/14
-
- Figure 22: Analysis of water capital expenditure in England and Wales, by water and sewerage companies, by type, 2013/14
- Figure 23: Analysis of water capital expenditure in England and Wales, by water-only companies, by type, 2011/12-2013/14
-
- Figure 24: Analysis of water capital expenditure in England and Wales, by water-only companies, by type, 2013/14
- Scottish Water Capital Expenditure
-
- Figure 25: Analysis of Scottish Water capital expenditure on water and sewerage services, 2009/10-2013/14
-
- Figure 26: Progress of Scottish Water to Date in the Five Year Investment Programme 2010/15
- Northern Ireland Capital Expenditure
-
- Figure 27: Analysis of Northern Ireland Water capital expenditure on water and sewerage services, 2009/10-2013/14
Water & Sewerage Future Capital Expenditure
-
- Key points
- 25-year Strategic Direction Statements
-
- Figure 28: UK Population, by Region, 2013-2025
- Forecast capital expenditure
- England & Wales - AMP6 2015-20
-
- Figure 29: Average expected combined household bill, by water and sewerage companies, 2014/15 and 2019/20
-
- Figure 30: Average expected household water bill, by water-only companies, 2014/15 and 2019/20
- Changes to regulatory framework for AMP6
- Move towards long-term alliances and frameworks across industry
-
- Figure 31: Total expenditure (Totex) allowance for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
-
- Figure 32: Total expenditure (Totex) allowance for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
- Figure 33: Forecast capital expenditure for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
-
- Figure 34: Forecast capital expenditure for AMP6 in England & Wales, by water & sewerage company, 2015/16-2019/20
- Figure 35: Forecast capital expenditure for AMP6 in England & Wales, by water only company, 2015/16-2019/20
- Thames Tideway Tunnel
-
- Figure 36: Estimated cost of Thames Tideway Tunnel, 2014/15-2021/22+
- Scotland Investment Programme 2015-2021
-
- Figure 37: Forecast Capital Expenditure for Scottish Water, 2015/16-2020/21
- Northern Ireland Investment Programme 2015/16-2020/21
Electricity Industry
-
- Key points
- Electricity industry market factors
- Price Controls
- Environmental and Legislative Factors
- Ofgem retail market review
- Electricity market reform
- Contracts for Difference (CfDs)
- Capacity Market (CM)
- Renewables Obligation (RO)
- Feed-in Tariffs (FITs)
- The Renewable Heat Incentive
- Combined Heat and Power
Electricity Distribution Capital Expenditure
-
- Key points
- Capital expenditure
-
- Figure 38: UK gross capital expenditure by electricity distribution network operators, 2009/102013/14
-
- Figure 39: UK gross capital expenditure by the electricity distribution network operators, by company, 2009/10-2013/14
-
- Figure 40: UK gross capital expenditure by the electricity distribution network operators, by company, 2009/10-2013/14
Electricity Distribution Future Capital Expenditure
-
- Key points
- Capital expenditure allowance 2010-15
- New price control framework based on Revenue = Incentives + Innovation + Outputs to come into effect from April 2015
-
- Figure 41: Total expenditure allowance for RIIO-ED1 in Great Britain, by company, 2015/16-2022/23
-
- Figure 42: Total expenditure allowance for RIIO-ED1 in Great Britain, by company, 2015/16-2022/23
- Figure 43: Forecast network investment of the electricity distribution network operators in Great Britain, by company, 2015/162022/23
Electricity Transmission Capital Expenditure
-
- Key points
- Capital expenditure
-
- Figure 44: Size of electricity transmission network in Great Britain, 2014
-
- Figure 45: Allowed Capital Expenditure by the Electricity Transmission Industry in Great Britain, 2007/08-2012/13
-
- Figure 46: Capital expenditure by the electricity transmission industry in Great Britain, 2009/10-2013/14
-
- Figure 47: Capital expenditure by the electricity transmission industry in Great Britain, 2009/10-2013/14
Electricity Transmission Future Capital Expenditure
-
- Key points
- New price control period RIIO-T1 2013-21
-
- Figure 48: Baseline capital expenditure allowance for NGET, 2013/14-2020/21
-
- Figure 49: Baseline capital expenditure allowance for SHETL 2013/14-2020/21
-
- Figure 50: Baseline capital expenditure allowance for SPTL, 2013/14-2020/21
-
- Figure 51: NGET annual capital expenditure, Actual 2013/14 and Forecast 2014/15-2020/21
-
- Figure 52: SHET annual capital expenditure, Actual 2013/14 and Forecast 2014/15-2020/21
-
- Figure 53: SPTL annual capital expenditure, Actual 2013/14 and Forecast 2014/15-2020/21
- Drivers for future capital investment
-
- Figure 54: Renewable electricity generation capacity awaiting/under construction, as of March 2015
-
- Figure 55: Operational renewable generation capacity, by technology, as of March 2015
- National Grid’s electricity 10 year statement
-
- Figure 56: Major current and planned transmission network development projects, as of November 2014
- Future potential energy mix
-
- Figure 57: Forecast power generation installed capacity under “slow progression” scenario, by source, 2015-35
-
- Figure 58: Forecast power generation installed capacity under “gone green” scenario, by source, 2015-35
-
- Figure 59: Forecast power generation installed capacity under “no progression” scenario, by source, 2015-35
-
- Figure 60: Forecast power generation installed capacity under “low carbon life” scenario, by source, 2014-35
- Increased Interconnectivity between European Countries
-
- Figure 61: Existing and planned interconnectors, as of November 2014
Gas Industry
-
- Key points
- Market factors
- Social factors
- Economic factors
- The UK’s increased reliance on gas imports
- Potential for shale gas extraction
- Wholesale gas prices
-
- Figure 62: Average wholesales gas prices, 2002-14
- Environmental and Legislative Factors
- Climate Change Programme (including Climate Change Levy, Agreement and efficiency measures)
- Emissions trading scheme
- Combined Heat and Power
- EU Renewables Directives
- UK renewables policy
- Renewables Obligation (RO)
- FeedIn Tariffs (FITs)
- The Renewable Heat Incentive
- National emission ceilings directive
- Carbon Emission Reduction Target (CERT) and Community Energy Saving Programme (CESP)
- Energy Company Obligation (ECO)
- Carbon Emissions Reduction Obligation
- Community obligation
- Home heating cost reduction obligation
Gas Capital Expenditure
-
- Key points
- The market 2010-14
-
- Figure 63: Total gas transmission and distribution capital expenditure, 2009/10-2013/14
-
- Figure 64: Total gas transmission capital expenditure, 2009/10-13/14
-
- Figure 65: Total gas distribution capital expenditure, 2009/10-2013/14
-
- Figure 66: Total gas transmission and distribution capital expenditure, 2009/10-2013/14
-
- Figure 67: Cumulative capital expenditure during GDPRC1 2008-13, by GDN and type
- Replacement Expenditure (Repex)
-
- Figure 68: Length of gas mains replaced, by distribution network operator, 2009-13
-
- Figure 69: Cumulative replacement expenditure during GDPRC1 2008-13, by GDN and type
Gas Future Capital Expenditure
-
- Key points
- Forecast 2014-21
-
- Figure 70: Ofgem’s required expansion of the number of properties to alleviate fuel poverty, 2013-21
- Innovation at centre of new price control model for gas distribution and transmission network
- Transmission network
-
- Figure 71: Capital Expenditure Plans by National Grid Gas Under RIIO-T1, by Category, 2014-2021
-
- Figure 72: Annual capital expenditure plans by National Grid Gas Under RIIO-T1, by Category, 2014-2021
- Distribution network
-
- Figure 73: Controllable Cost Allowances for Gas Distribution Companies Under (RIIOGD1), 2014-2021
-
- Figure 74: Annual capex plans under RIIO-GD1, by GDN, 2014-2021
-
- Figure 75: Annual repex plans under RIIO-GD1, by GDN, 2014-2021
-
- Figure 76: Forecast total capex and repex during RIIOGD1, 2013/142020/21
- Individual companies
- Northern gas networks
-
- Figure 77: Northern Gas Networks Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 78: Northern Gas Networks Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
- Scotland gas networks
-
- Figure 79: Scotland Gas Networks Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 80: Scotland Gas Networks Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
- Southern gas networks
-
- Figure 81: Southern Gas Networks Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 82: Southern Gas Networks Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
- Wales and West Utilities (WWU)
-
- Figure 83: WWU Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 84: WWU Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
- NGG East of England
-
- Figure 85: NGG East of England Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 86: NGG East of England Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
- NGG London
-
- Figure 87: NGG London Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 88: NGG London Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
- NGG North West
-
- Figure 89: NGG North West Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 90: NGG North West Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
- NGG West Midlands
-
- Figure 91: NGG West Midlands Capex & Repex, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
-
- Figure 92: NGG West Midlands Capex & Repex Workload, 2013/14 (Actual) and 2014/15-2020/21 (Planned)
Supply Industry Structure
-
- Key points
- Companies
AMEC Foster Wheeler
-
- Company outlook:
-
- Figure 93: Financial analysis of AMEC, 2009-13
Balfour Beatty
-
- Balfour Beatty announces six profit warnings in two years as it faces major challenges from construction contracts
-
- Figure 94: Financial analysis of Balfour Beatty, 2009-13
-
- Figure 95: Financial analysis of Balfour Beatty by segment, 2012-13
Kellogg Brown & Root Holdings
-
-
- Figure 96: Financial Analysis of Kellogg Brown & Root Holdings, 2009-13
-
The Costain Group
-
- Company performance
-
- Figure 97: Financial Analysis of Costain Group, 2009-13
-
- Figure 98: Turnover analysis of Costain Group, by division, 2010-13
Laing O’rourke Utilities
-
- Company performance
-
- Figure 99: Financial analysis of Laing O’Rourke, 2010-14
-
- Figure 100: Financial analysis of Laing O’Rourke Utilities, 2010-14
Morrison Utility Services
-
- Company performance
-
- Figure 101: Financial analysis of Morrison Utility Services, 2010-14
Mcnicholas Construction Holdings
-
- Company performance
-
- Figure 102: Financial Analysis of McNicholas Construction (Holdings), 2010-14
Forefront Utilities
-
-
- Figure 103: Financial analysis of Forefront Utilities, 2010-14
-
Further Sources & Contacts
-
- Association of Electricity Producers
- Energy Networks Association
- Energy Industries Council
- Energy Retail Association1
- Office of Gas and Electricity Markets (Ofgem)
- Office of Gas and Electricity Markets - Scotland (Ofgem Scotland)
- Office of Gas and Electricity Markets - Wales (Ofgem Wales)
- Energy Networks Association
- Society of British Gas Industries
- Association of Consulting Engineers
- British Water
- British Waterways Board
- Chartered Institution of Water & Environmental Management
- International Water Association
- OFWAT
- Society of British Water & Wastewater Industries
- National Joint Utilities Group
- Trade magazines
- The Engineer
- European Process Engineer
- Modern Utility Management
- Plant Engineer
- Plant and Works Engineering
- Professional Engineering
- Utility Week
- Trade exhibitions
- Utility Week Live incorporating IWEX 2015
- Sustainability Live 2015
Back to top