Table of Contents
Executive Summary
-
- The market
- Coal-fired power plants to be phased out by 2025
- Share of gas-fired power generation increases from 29% in 2015 to 41% in 2016
- Life of a number of existing nuclear power stations extended
- New Hinkley Point C nuclear power plant beset by delays
- Nearly a quarter of UK electricity generated from renewable sources in 2016
-
- Figure 1: Analysis of electricity supplied in the UK, by type of fuel used in generation, 2016
- Government push for shale gas exploration to reduce reliance on imports
-
- Figure 2: UK Gas Supply, 2012-16
- Energy supplier switching up by nearly 30% in 2016
- Cheap fixed tariffs have become focal point of competition...
- Suppliers looking to differentiate themselves in an ever more competitive market
-
- Figure 3: Breakdown of average domestic dual fuel bill, 2016
- Market factors
- Significant investment in UK energy infrastructure required to ensure security of supply and meet renewables targets
- Electricity Market Reform (EMR) to ensure investment in UK’s low-carbon electricity infrastructure
- Large Combustion Plant Directive drives increased closure rate of coal-fired power stations
- Further reforms on the way for retail energy market following CMA market investigation
- The industry
- What we think
Key Insights
-
- What is the potential impact of Brexit on the UK’s renewable energy policy?
- Are energy suppliers branching out into other services or utilities?
- First Utility plans to add more diversified services to its portfolio.
- What opportunities do smart meters offer for energy suppliers?
Introduction
-
- Definitions
- Methodology
- Abbreviations
- Market positioning
UK Economy
-
- Overview
-
- Figure 4: Forecast GDP development 2017-21
-
- Figure 5: UK GDP quarterly development, 2004-17
-
- Figure 6: UK GDP in economic downturns and recoveries since 1979
- Inflation
- Interest rates
- House prices
-
- Figure 7: UK house price changes, 2006-2017
- Consumer spending
- Manufacturing
-
- Figure 8: UK manufacturing, 2014-17
- Business investment
-
- Figure 9: UK GFCF 2003-17
- Imports
- Exports
Market Factors
-
- Key points
- Industry regulation
- CMA energy market investigation
- Legislative environment
- Large Combustion Plant Directive (LCPD)
- EU Renewables Directives
- UK renewables policy
- Renewables Obligation (RO)
- Feed-In Tariffs (FITs)
- The Renewable Heat Incentive
- Electricity Market Reform
- Carbon Emission Reduction Target (CERT) and Community Energy Saving Programme (CESP)
- Energy Company Obligation (ECO)
Electricity Demand & Generation
-
- Key points
- Overview
- Despite Brexit uncertainty, interconnector capacity between Britain and Europe is set to increase
-
- Figure 10: Existing and planned interconnectors, as of June 2017
- Electricity supply
-
- Figure 11: Analysis of electricity supply in the UK, 2012-16
-
- Figure 12: Analysis of electricity supply in the UK, 2012-16
- Figure 13: Analysis of electricity supplied in the UK, by type of fuel used in generation, 2011-16
- Electricity consumption by end-use sector
-
- Figure 14: Analysis of electricity usage, by type of industry, UK, 2010-15
-
- Figure 15: Analysis of electricity usage, by the commercial sector, 2010-15
-
- Figure 16: Analysis of electricity usage by the commercial sector, 2015
- Coal generation
- Remaining coal fired power stations likely to close by 2025
- Conversion of coal-fired stations to biomass plants
-
- Figure 17: Analysis of electricity supplied from coal-fired power stations in the UK, 2009-16
- Gas/CCGT generation
- Government to prioritise new gas-fired power stations
-
- Figure 18: Analysis of electricity supplied from gas-fired power stations in the UK, 2009-16
-
- Figure 19: Analysis of electricity supplied from gas-fired power stations in the UK, 2009-16
- Nuclear power generation
-
- Figure 20: UK nuclear sites planned closure dates, as of June 2017
- Planned new nuclear power development marred by major delays
-
- Figure 21: Analysis of electricity supplied from nuclear power stations in the UK, 2009-16
- Renewables generation
- Potential impact of Brexit on UK’s renewable energy policy
- Offshore wind
- Offshore wind costs falling fast
- Green Investment Bank drive to boost investment in offshore wind
- Solar power
- Large-scale and small-scale solar PV installations see subsidies slashed
- Hydro electricity
- Bioenergy
-
- Figure 22: Bioenergy electricity generation capacity, by type of plant, 2012-16
- Figure 23: Renewable electricity generation in the UK, 2011-16
-
- Figure 24: Electricity generation from on- and offshore wind, 2012-16
- Figure 25: Renewable energy projects in pipeline, by technology, as of October 2016
Gas Demand & Supply
-
- Key points
- Overview
-
- Figure 26: Total gas supply, UK, 2012-16
- Risks to UK gas supply
- Potential for shale gas extraction
- Wholesale gas prices
-
- Figure 27: Average wholesale gas prices, 2002-16
-
- Figure 28: Average wholesale gas prices, 2002-16
- Gas demand by end user
-
- Figure 29: Segmentation of industrial gas consumption, by end use industries, UK, 2011-15
-
- Figure 30: Segmentation of gas consumption, by non-industrial sectors, UK, 2011-15
- Figure 31: Segmentation of gas consumption, by non-industrial sectors, 2015
- Power Generation
-
- Figure 32: Gas supplied for electricity generation, UK, 2012-16
-
- Figure 33: Gas supplied for electricity generation, UK, 2012-16
- Interruptible
- Industrial
-
- Figure 34: Gas supplied to the industrial sector, UK, 2012-16
-
- Figure 35: Gas supplied to the industrial sector, UK, 2012-16
- Commercial
-
- Figure 36: Gas supplied to the UK commercial sector, 2011-15
-
- Figure 37: Gas supplied to the commercial sector, UK, 2011-15
- Domestic
-
- Figure 38: Analysis of the development of gas supplied to the UK domestic sector, 2012-16
-
- Figure 39: Gas supplied to the UK domestic sector, 2012-16
Retail Energy Market
-
- Key points
- Market background
-
- Figure 40: Proportion of domestic electricity customers by supplier type, by region, 2000 and 2017
-
- Figure 41: Proportion of domestic gas customers of British Gas Trading and other suppliers, by region, 2017
- Regional demand
-
- Figure 42: Gas sales and customers by region, Great Britain, 2015
-
- Figure 43: Electricity sales and customers by region, Great Britain, 2015
- Market issues and recent developments
- Further market reforms on the way following CMA Energy Market Investigation
- Energy market likely to face further government intervention
- Breakdown of average gas and electricity bill
-
- Figure 44: Breakdown of average large supplier dual fuel household bill, 2016
-
- Figure 45: Breakdown of average domestic electricity bill, 2016
- Figure 46: Breakdown of average domestic gas bill, 2016
- Price competition intensified between 2014 and 2016, reflecting falling wholesale costs and more industry players
- ...but many suppliers hike prices in early 2017, citing rising wholesale costs and the cost of delivering government policies
- Competition largely focused on cheap fixed tariffs...
- ... but most households remain on more expensive standard variable tariff
- Switching trends
-
- Figure 47: Number of supplier switches in the domestic gas and electricity markets and share of small suppliers, Great Britain, Q1 2011 - Q1 2017
-
- Figure 48: Number of supplier switches in the domestic gas and electricity markets, Great Britain, Q1 2011 - Q1 2017
- Independent suppliers are rapidly gaining market share
-
- Figure 49: Domestic gas supply market shares in Great Britain, by company 2012-16
- Figure 50: Domestic electricity supply market shares in Great Britain, by company 2012-16
- Lower prices and differentiation strategies drive growth of independent suppliers
- Energy suppliers are branching out into multi-utility market
- Customer service is key driver of customer loyalty
- Smart Meter Roll-out programme
- First-generation (SMETS1) smart meters will need to be upgraded or replaced, as they can revert to being ‘dumb’ if consumers switch supplier
- Potential benefits and opportunities offered by smart meters
- Switching rates in the SME sector also set to increase
The Consumer - Current Supplier and Recent Switches
-
- Key points
- British Gas remains top supplier of gas and electricity
-
- Figure 51: Current gas and electricity supplier(s), May 2017
- Over a quarter of people have changed energy supplier in past 12 months
-
- Figure 52: Change of gas/electricity supplier in the last 12 months, May 2017
The Consumer - Reasons For Switching
-
- Key points
- 22% switched supplier in the past 12 months because their tariff expired
-
- Figure 53: Reasons for changing gas/electricity supplier in the last 12 months, May 2017
The Consumer – Attitudes towards Gas and Electricity Suppliers
-
- Key points
- Most people (84%) satisfied with the customer service received from their current supplier
-
- Figure 54: Attitudes towards gas and electricity suppliers, May 2017
-
- Figure 55: Agreement with statements relating to electricity and gas suppliers, May 2017
- First Utility receives highest customer satisfaction rating of top seven suppliers
-
- Figure 56: I am satisfied with the customer service I receive from my current supplier, by current gas and/or electricity supplier, May 2017
Company Profiles
-
- Key points
- Company profiles
Centrica/British Gas Trading
-
- Recent acquisitions and disposals
- Company strategy
-
- Figure 57: Financial analysis of Centrica, 2012-16
-
- Figure 58: Centrica revenue segmental analysis, 2016
- Following a price freeze in the first half of 2017, British Gas hikes electricity prices by 12.5% from September 2017
- Focus on innovative Connected Homes Products
- Company review and outlook
-
- Figure 59: Financial analysis of British Gas Trading, 2012-16
EDF Energy
-
- Planed new UK power stations
- Smart metering programme
- Recent price cuts and hikes
- Intense competition sees EDF Energy lose more customers in 2016
-
- Figure 60: Financial analysis of EDF Energy, 2012-16
-
- Figure 61: EDF Energy revenue segmental analysis, 2016
RWE NPower
-
- Price cuts announced in early 2016...
- ... followed by price hike in March 2017
- Company strategy and outlook
-
- Figure 62: Financial analysis of Npower, 2011-15
-
- Figure 63: RWE - UK revenue segmental analysis, 2016
E.ON Energy
-
- E.ON cuts gas price in early 2016....
- ... But announces a price hike in March 2017, the first in more than three years
- Company strategy
-
- Figure 64: Financial analysis of E.ON Energy Solutions, 2012-16
-
- Figure 65: E.ON revenue segmental analysis, 2016
ScottishPower Energy Retail
-
- Gas prices cut in early 2016, but dual tariff raised in early 2017
- Company performance & strategy
-
- Figure 66: Financial analysis of ScottishPower Energy Retail, 2012-16
-
- Figure 67: ScottishPower revenue segmental analysis, 2016
SSE
-
- Recent reductions in gas prices for SSE customers
- But SSE hikes electricity prices from April 2017
- Company strategy and outlook
-
- Figure 68: Financial analysis of SSE, 2012-16
-
- Figure 69: SSE revenue segmental analysis, 2016
Ecotricity Group
-
- Ecotricity raises energy prices towards the end of 2016
- Company strategy
-
- Figure 70: Financial analysis of Ecotricity Group, 2012-16
First Utility
-
- First Utility diversifies in a bid to become multi-utility brand
-
- Figure 71: Financial analysis of First Utility, 2011-15
Good Energy Group
-
- Company strategy
-
- Figure 72: Financial analysis of Good Energy Group, 2012-16
-
- Figure 73: Turnover analysis of Good Energy Group, by segment, 2012-16
Future Energy Demand
-
- Key points
- Electricity generation forecast
- National Grid’s Future Energy Scenarios
-
- Figure 74: Annual power demand in Great Britain, 2017-42
-
- Figure 75: Annual power demand in Great Britain, 2017-42
- Electric cars could fuel huge demand for power over the next 30 years
- Electricity storage to increase, but at a more moderate levels than National Grid previously predicted
- Government unveils £246 million battery investment strategy in July 2017
- Future potential energy mix
- Renewables
- Nuclear
- Thermal plants
- Interconnectors
-
- Figure 76: Forecast power generation installed capacity under “slow progression” scenario, by source, 2017-42
-
- Figure 77: Forecast power generation installed capacity under “two degrees” scenario, by source, 2017-42
-
- Figure 78: Forecast power generation installed capacity under “steady state” scenario, by source, 2017-42
-
- Figure 79: Forecast power generation installed capacity under “consumer power” scenario, by source, 2017-42
-
- Figure 80: Future potential energy mix in 2037, by scenario
- Gas demand forecast
-
- Figure 81: Forecast UK gas demand, 2017-42
Further Sources & Contacts
-
- Trade associations & regulatory bodies
- Association of Electricity Producers
- Energy Networks Association
- Energy Industries Council
- Energy Retail Association
- 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)
- Renewable Energy Association
- Solar Trade Association
- Trade magazines
- Modern Power Systems
- Modern Utility Management
- Utility Week
- Energy Now
- Real Power
- Renewable Energy Focus
- Renewable Energy Installer
- Resource
- Solar Business Focus
- Solar UK
- Solar International
- Wind Energy Network
- Wind Power Monthly
- Trade Exhibitions
- Energy4PowerLive 2017
- Offshore Europe 2017
- RWM 2017
- edie live 2017
Back to top