Utilities Market Definition
The utilities market consists of sales of electric power, natural gas, steam supply, water supply, and sewage removal services by entities (organizations, sole traders, and partnerships) that provide these utilities to end consumers.
Electric utility companies engage in the generation, transmission, and distribution of electricity. They source coal from mining companies and heavy oil distillates from oil companies for power generation. Some also source power from sustainable energy sources and nuclear power stations for distribution. The power generated is transmitted over long distances to transformers in substations. The electricity from the substation is then delivered to commercial and residential customers, in some cases along a national or state grid. The market for electricity is often a regulated one
Utilities Market Size
The global utilities market reached a value of nearly $4,230.3 billion in 2020, having increased at a compound annual growth rate (CAGR) of 1.4% since 2015. The market is expected to grow at a CAGR of 7.2% from 2020 to reach $5,996.6 billion in 2025. The global utilities market is expected to reach $8,092.4 billion in 2030, at a CAGR of 6.2%.
Growth in the historic period resulted from rapid economic growth in emerging markets, technological advances and market liberalization. Factors that negatively affected growth in the historic period were electricity transmission and distribution losses, rise in debts, and COVID-19 pandemic. Going forward, global population growth, faster economic growth, rising investments in renewable energy and increase in global utility mergers and acquisitions will drive growth. Factors that could hinder the growth of the utilities market in the future include changing regulatory environment, and outbreak of coronavirus disease (COVID-19).
Utilities Market Drivers
The key drivers of the utilities market include:
Faster Economic Growth
The global economy is expected to go through a continued period of steady growth during the forecast period. The International Monetary Fund (IMF) predicts that the global GDP growth will be 3.3% in 2020 and 3.4% in 2021 . In addition, the recovering commodity prices after a decline in 2014 and 2015 are expected to increase the average prices of power and increase the market value. The European market is expected to see growth return later in the period between 2018 and 2022. Emerging markets are expected to continue to see generally higher levels of growth than the developed markets during this period. Rapid population growth, urbanization and industrialization in emerging markets will drive economic growth. The economic growth in developed and developing countries is expected to increase the demand for electricity, driving the utilities market.
Utilities Market Restraints
The key restraints on the utilities market include:
Coronavirus Pandemic
The outbreak of Coronavirus disease (COVID-19) has acted as a significant restraint on the utilities market in 2020 as demand for utility services from industrial and commercial establishments decreased due to trade restrictions and lockdowns imposed by governments globally. Many manufacturing facilities globally halted operations to contain the spread of virus among its workforce, thereby limiting the need for utility services such as electricity and wastewater treatment. COVID 19 is an infectious disease with flu-like symptoms including fever, cough, and difficulty in breathing. The virus was first identified in 2019 in Wuhan, Hubei province of the People’s Republic of China and spread globally including Western Europe, North America and Asia. Steps by national governments to contain the transmission have resulted in a decline in economic activity with countries entering a state of 'lock down' and the outbreak is expected to continue to have a negative impact on businesses throughout 2020 and into 2021. However, it is expected that the utilities market will recover from the shock across the forecast period as it is a 'black swan' event and not related to ongoing or fundamental weaknesses in the market or the global economy.
Utilities Market Trends
Major trends influencing the utilities market include:
Utilizing Battery Storage For Solar Energy
Electric power generation companies are increasingly using batteries to store solar energy during daylight hours. These energy-storage sites consist of large lithium-ion batteries. These batteries store enough energy to serve as a back-up in case of fuel shortages. They are designed to absorb solar power and feed it back to the grid. These systems minimize the need for capital intensive power generation plants, thereby enhancing transmission and distribution efficiencies and thus reduce operational costs. For Instance, World Bank Group is planning to invest USD 1 billion for a new global program to accelerate investments in battery storage for energy systems. Also, in 2020, Greenko, a leading provider of renewable electricity in India, announced investment of $1 billion in lithium-ion batteries production for applications in the power grid.
Digital Technologies In Electric Power Generation And Gas Distribution
Digital technologies are increasingly making their way into power generation, transmission and distribution, and the gas distribution industry to enhance productivity, efficiency, and safety associated with power plants and gas plants. Digital technologies such as smart grids, sensors and smart meters provide the company, customer, with more accurate and real-time account of power and gas usage. These technologies help to improve productivity, efficiency, safety, compliance and reliability in power and gas generation and distribution. This results in better asset management, planning, execution, and faster level of service with higher customer satisfaction. According to the Federal Energy Regulatory Assessment 2020, the penetration of smart meters in the USA reached penetration rate of 57%. Also, British Gas has installed smart gas meters in the UK and plans to install them in every home and small business by 2020. This target date has since been extended to the end of June 2025. , Some of the major companies adopting digital technologies include Duke Energy, Engie, National Grid and NextEra.
Opportunities And Recommendations In The Utilities Market
Opportunities –The top opportunities in the utilities market segmented by type will arise in the electric power generation, transmission and distribution segment, which will gain $1,264.2 billion of global annual sales by 2025. The top opportunities in the utilities market segmented by type of operator will arise in the private operator segment, which will gain $1,092.6 billion of global annual sales by 2025. The top opportunities in the electric power, generation and transmission market by type will arise in electric power transmission, control and distribution market, which will gain $904.2 billion by 2025. The top opportunities in the water and sewage market by type will arise in water supply and irrigation systems market, which will gain $109.1 billion by 2025.The top opportunities in the natural gas distribution market by type will arise in industrial and commercial natural gas distribution market, which will gain $248.2 billion by 2025.The utilities market size will gain the most in China at $270.1 billion.
Recommendations-To take advantage of these opportunities, The Business Research Company recommends the utilities companies to focus on distributed generation models, focus on smart grids, reduce emissions, localize production activities, provide competitively priced offerings, focus on corporate power purchase agreements, leverage social media to maximize the reach and focus on end-use industries.
Utilities Market Segmentation
The utilities market is segmented by type, by type of operator and by geography.
By Type -
The utilities market is segmented by type into
- a) Water and sewage
- b) Natural gas distribution
- c) Electric power generation, transmission, and distribution
The electric power generation, transmission and distribution market was the largest segment of the utilities market segmented by type, accounting for 77.1% of the total in 2020. The natural gas distribution is expected to be the fastest growing segment, at a CAGR of 10.2% during 2020-2025.
Sub-Segmentation:
The water and sewage market is further segmented into
- a) Water Supply & Irrigation Systems
- b) Sewage Treatment Facilities
- c) Steam & Air-Conditioning Supply
The natural gas distribution market is further segmented into
- a) Industrial And Commercial Natural Gas Distribution
- b) Household Natural Gas Distribution
The electric power generation, transmission, and distribution market is further segmented into
- a) Electric Power Transmission, Control, And Distribution
- b) Electricity Generation
By Type Of Operator -
The utilities market is segmented by type of operator into
- a) Public Operator
- b) Private Operator
The public operator market was the largest segment of the utilities market segmented by type of operator, accounting for 52.4% of the total in 2020. The private operator market is expected to be the fastest growing segment, at a CAGR of 9.1% during 2020-2025.
By Geography- The utilities market is segmented by geography into
- o North America
o Western Europe,
- • UK
- • Austria
- • Belgium
- • Denmark
- • Finland
- • France
- • Germany
- • Ireland
- • Italy
- • Netherlands
- • Norway
- • Portugal
- • Spain
- • Sweden
- • Switzerland
- • France
o Asia Pacific
- • China
- • Australia
- • Hong Kong
- • India
- • Indonesia
- • Japan
- • Malaysia
- • New Zealand
- • Philippines
- • Singapore
- • South Korea
- • Thailand
- • Vietnam
o Eastern Europe
- • Russia
- • Czech Republic
- • Poland
- • Romania
o South America
- • Brazil
- • Argentina
- • Chile
- • Colombia
- • Peru
- • Venezuela
o Middle East
- • Saudi Arabia
- • Israel
- • Turkey
- • UAE
o Africa
- • Egypt
- • Nigeria
- • South Africa
Asia-Pacific was the largest region in the global utilities market, accounting for 40.8% of the total in 2020. It was followed by Western Europe, North America, and then the other regions. Going forward, the fastest-growing regions in the utilities market will be Middle East, and South America, where growth will be at CAGRs of 11.3% and 10.9% respectively. These will be followed by the Eastern Europe, and Africa where the markets are expected to grow at CAGRs of 10.3% and 10.2% respectively, during 2020-2025.
Utilities Competitive Landscape
Major Competitors In The Utilities Market are:
Enel SpA
E.ON SE
Uniper SE
State Power Investment Corporation
Iberdrola, S.A.
Other Competitors In The Utilities Market Include:
National Energy Investment Group Co., Ltd.
Engie S.A.
Exelon Corporation
Duke Energy Corporation
Veolia Environnement S.A.
Bionics Consortium Pvt. Ltd
Marcuras Water Treatment Pvt. Ltd.
Paragon Water Technologies
Toshiba Water Solutions Private Limited
Envicare Technologies pvt Ltd
Kelvin Water Technologies
Wuhan Sanzhen Industry Holding Co.
Beijing Enterprises Water Group
China Water Affairs Group
Shenzhen Water (Group) Co.
Jiangxi Hongcheng Waterworks Co.
Beijing IWHR Corporation
China Huadian Group Corporation
China Southern Power Grid Company
CLP Holdings Limited
China Three Gorges Corporation
Power Grid Corporation of India Limited
NTPC Limited
Tata Power
Adani Power
NHPC Limited
China Datang Corporation
China Guodian Corporation
China Huaneng Group
Hokkaido Electric Power Company
Tohoku Electric Power Co
AGL Energy
Osaka Gas
Tokyo Gas
GAIL
Gujarat State Petronet
Indraprastha Gas
Mahanagar Gas
Petronet LNG
ENN Group
Beijing Enterprises Group Company Limited
China Resources Gas GrouP
Korea Gas Corporation (KOGAS)
Northumbrian Water
United utilities
Severen Trent Water
Yorkshire water
Centria Reti Gas
GASAG
Enagás
Italgas
Eni Gas & Power
Cadent Gas Ltd
Amprion GmbH
Endesa
Red Eléctrica de España (REE)
Dana Brevini Power - Transmission S.p.A.
EDF Energy
E.ON.
RWE.
Scottish Power
Centrica SSE
Drax Power Limited
International Power/GDF SUEZ SA
Intergen
ESBI
Électricité de France S.A .
Vattenfall AB
Fortum Oyj
Fennovoima Ltd
Areva
Horizon Nuclear Power
Veolia Environment
IIT Corporation
Dow Water and Process Solutions
Evoqua Water Technologies Corporation
Enel GE
Water and Process Technologies
Krevox
Municipal Water and Sewage Company S.A.
PJSC Inter RAO UES
PJSC Unipro (JSC EON Russia OGK-4)
PJSC Territorial Generating Company Number One (TGK-1)
PJSC Mosenergo (TGK-3)
Gazprom
Novatek
Omv petrom
G.EN. GAZ ENERGIA
NaftoGaz Group
PGNiG
Evoqua Water Technologies
Ultrapure & Industrial Services
Artesian Water Company
Delaware City Water System
Itron Inc.
Louisville Water Company
NextEra Energy
Duke Energy
Southern Company
Dominion Resources
Exelon
American Electric
Public Service Enterprise Group
ENMAX Corporation
TransAlta Corporation
Comision Federal de Electricidad Xcel Energy
Pacific Gas & Electric
Hydro-Quebec
Hydro One Inc
BC Hydro
Federal Electricity Commission
Iberdrola Mexico
AGL Resources
Enbridge Inc
Sempra Energy
TC Energy Corporation
Oneok Inc.
Williams Companies Inc
Dominion Energy Inc.
Southern Co.
Kinder Morgan Inc
Total E&P Canada Ltd
Edenor SA
Edesur SA
Transener
Pampa Energía
Gas Natural Fenosa
Planta Compresora Piedra del Aguila TGS
Galea LG S.A
Montevideo Gas
Alupar
Celesc
CEMIG
Manaus Energia
ENGIE Brasil
Sede Central de la Compania de Gas de Montevideo
Hunt LNG
Companhia Hidro Elétrica do São Francisco
Copel Geração e Transmissão SA
Eletrobras Eletronorte
Petroleo Brasileiro SA Petrobras
Enel Generación Chile
AES Gener
Colbún S.A
Empresas Públicas de Medellín E.S.P.
Siemens LLC
Areva T & D
Hammadi Power Service
Federal Electricity and Water Authority (FEWA)
Israel Electric Corporation
Abu Dhabi National Oil Company
Integrated Gas Services Company LLC
Laheeb Gas Trading
Natural Gas Distribution Company
Aksa Cukurova Dogal Gaz Dagitim Anonim Sirketi
National Iranian Oil Company
Saudi Electricity Company
Dubai Electricity & Water Authority
Saudi Consolidated Electricity Company
Abu Dhabi National Energy Company PJSC (TAQA)
Nuclear Power Production & Development Company of Iran (NPPD)
Nawah Energy
City Power Johannesburg (Pty) Ltd
Vuselela Energy (Pty) Ltd
Star Point Electrical CC
Sonangol Group
Lekoil Limited
PetroSA Sasol
Tanzania Petroleum Development Corporation
Exxaro
AGE Technologies
AngloGold Ashanti