World Utilities Market Brief

World Utilities Market Brief

The global outlook series on Utilities provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report provides a quick primer on the industry’s structure, and its segments. Global market discussions are lined up with brief summarizations of up-to-date noteworthy issues and trends in each of the identified market segments. The reader stands to gain actionable insights into the US market with discussion in this section covering key sectors, such as, Wind Energy Utilities, Water Utilities, and Gas & Electric Utilities. Punctuated with 9 data rich tables and pictorial representations for easier understanding, the discussion in this section highlights lurking challenges in the form of regulatory concerns, and the implication of deregulation of water supply, the ingress of newer, and powerful players with multinational profiles. A crisply worded outlook additionally summarizes the market’s future. Other briefly abstracted markets designed to offer the reader a prelude to regional-level dynamics include Canada, Japan, France, Germany, Russia, Spain, UK, China, India, Indonesia, Australia, Brazil, Middle East and Africa. The report recapitulates the recent mergers, acquisitions, and other select strategic corporate developments in addition to providing an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 407 companies worldwide.

UTILITIES GOS-045
A GLOBAL OUTLOOK, SEPTEMBER 2008


CONTENTS


1. Overview 1
Scales and Economies of Scale 1
Market Structure 1
It is a European Fort 2
Mergers & Acquisitions: The Key For Growth 2
One-stop shopping: Losing the Grace? 2
Water - The Fastest Growing Utility Sector 2
Changing Scenario - The Indicators 3
Supply Security - Triggering Alarm Bells 3

2. Major Issues and Trends 3
Energy-Intensive Customers Take a New Path 3
Lack of Skilled Workforce Boost M&A Activities 3
Industry Regulation - An Important Determinant of Company
Strategies 3
Pressurized Margins - Redefining Success Determinants 4
Blackouts - The ‘Dark’ Jeopardy 4
Slow Reforms - Mirroring Inconsistent Deregulation 4
Environmental Concerns: Yet to Take Full-Form 4
Growth Potential for IT Sector 5
Call Centers and Brand Building: A Leap Ahead in Customer
Service 5
Emergence of Call Centers 5
Brand Building Efforts 5

3. A Segmental Perspective 5
Gas Utilities 5
A Sector Profile 5
Table 1: Global Natural Gas Consumption by Region: Annual
Market Estimates for 2003 through 2008 in Billion Cubic Feet
for US, Canada, Japan, Europe, Asia-Pacific, Latin America
and Middle East & Africa 6

Table 2: Global Natural Gas Consumption by Region:
Percentage Breakdown for 2004 and 2008 for US, Canada,
Japan, Europe, Asia-Pacific, Latin America and Middle East
& Africa 6
Europe and North America: The Isles of Demand Creating
Polarized Markets 7
Construction of Gas Pipelines - A Strategic Move 7
Table 3: Global Gas Pipelines Construction by Country: Annual
Market Estimates for 2003 through 2008 in Miles for Canada,
Europe, Asia-Pacific, Middle East, Africa, Latin America,
and US 7
Running Out of Reserves: Can Imports Help? 7
‘Globalization’ of Gas: Far from Reality? 8
Regulatory Reforms: Changing the Dynamics of Gas Industry 8
Deregulation Drives Demand 8
Bracing Up to the Challenges of Liberalized Market 8
Water Utilities 9
A Backdrop 9
Water Security: Catching ‘Investment’ Fire 9
Electric Utilities 9
Mapping the Power Utilities’ Growth Line 9
Table 4: Global Electric Power Generation Market
(2006-2007): Cost per Kilowatt Hour in Cents by Country -
Denmark, Italy, Germany, The Netherlands, Belgium, UK,
Spain, US, France and Australia 10

Table 5: Global Net Generation of Electricity by Type:
Percentage Market Share for 2005, 2008, and 2010 for Coal,
Petroleum, and Others 10
Asia Tops Demand Growth 11
Electric Utilities: Towards a Greener Aspect 11
Eco-Friendly and Innovative Products Fuel the Market Growth
of Power Utility Sector 11
Substation Automation and Integration Programs Marks the
Power Utility Sector 12
Protective-Relay Usage Patterns Growing in the World 12
Table 6: Global Electricity Consumption by Region: Annual
Market Estimates for 2004 through 2010 in Billions of
Kilowatt Hours for Mature Market Economies, Transitional
Economies, and Emerging Economies 12
Risk ‘Returns’ 13

4. Mergers & Acquisitions 13

5. Strategic Corporate Developments 24

6. Products/ Services/ Concepts/ Technology Developments & Launches 26

7. Outlook 27

8. A North American Perspective 27

8a. United States 27
Wind Energy Utilities Market 27
Winds of Change in the US Energy Sector 27
Wind Energy Market: Consolidation 27
Growth Prospects 28
New Energy Policy Act: A Welcome Change 28
Water Utilities: A Market Primer 28
Deregulation of Water Supply: In the Pipeline 28
Gas & Electric Utilities: Market Review 28
Residential and Small Business Consumers: A Niche Unwilling
to Switch! 28
Benefits of Waiting Game: Realized??? 28
Slumped by the Slow On Takers 29
Branding Might Help 29
Market Snippets 29
Size Does Matter!!! 29
Lurking with Regulatory Concerns 29
Mergers & Acquisitions in the Recent Past 29
Market Analytics - A Review By Water, Gas & Power Sectors 30
Water Utility 30
Table 7: Leading Publicly-traded Water Companies in the US
(2005): Revenues in US$ Million for American Water, United
Water, Aqua America, California Water Service Group, and
American States Water 30

Table 8: Water Supply in the US: 2005 Gallons of Ground
Water with Square Miles of Estuaries, Miles of Ocean and
Great Lakes Shoreline, Acres of Wetlands, Great Lakes
Shoreline, Lakes, Ponds & Reservoirs, and Million Miles of
Rivers & Streams. 30

Table 9: Leading Water Treatment Service Companies’ Sales in
the US: Percentage Market Share for 2005 for Suez, Hercules,
Drew, ChemTreat, and Others 31
Gas Utility 31
Table 10: Natural Gas Production and Supply in the US:
Annual Market Estimates for 2003 through 2008 in Billions of
Cubic Feet 31

Table 11: Natural Gas Consumption by Category in the US:
2005 in Cubic Feet Per Day for Residential, Commercial,
Industrial, Electric Utilities, Lease and Plant Use, and
Pipeline Fuel 31
Power Utility 32
Table 12: Leading Electric Utility Companies in the US
(2005-2006): Market Capitalization in US$ Billion for
Exelon, Duke Energy, TXU, Dominion Resources, and Southern
Company 32

Table 13: Electricity Generation by Source in the US: Annual
Market Estimates for 2003 through 2008 in Terawatt Hours for
Coal, Nuclear, Natural Gas, Hydro Electric, and Oil 32

Table 14: Electricity Sales by Type in the US: Annual
Market Estimates for2003 through 2008 in ‘000’s of Megawatt
Hours for wholesale, and Retail 33

Table 15: Electricity Transmission Capacity in the US:
Forecasts for 2008 in Megawatt Miles Per Megawatt by Region
- East Central Area Reliability Coordination Agreement
(ECAR), Electric Reliability Council of Texas (ERCOT),
Florida Reliability Coordinating Council (FRCC), and Others 33
Outlook 34

8b. Canada 34
Overview 34
Electric Utilities 34
Feeling the Heat of Supply Insecurity 34
Phased Liberalization: Eliminates Level Playing Field 34
Electric Utilities Venture into Telecom Sector 35
Gas Utilities 35
Bogged Down by Conservative State Regulation 35
Table 16: Natural Gas Production and Consumption in Canada:
Annual Market Estimates for 2003 through 2008 in Billion
Cubic Meters 35

9. Japan 35
Power Sector 35
Gas Sector 36
Obstacles Faced 36
Enhancement of Prices and Infrastructure 36
Table 17: Power Production by Energy Source in Japan: Annual
Market Estimates for 2003 through 2008 in Terawatt Hours for
Coal, LNG, Oil, Nuclear, Hydro, and Others 36

10. A European Perspective 37
Overview 37
2003 & 2004: A Snapshot 37
European Electricity Market: A Review 37
Table 18: Household Electricity Consumption by Geographic
Region in Europe: Annual Market Estimates for 2003 through
2008 in Terawatt Hours for France, UK, Germany, Italy,
Spain, Denmark, Finland, Norway, and Sweden 38
Liberalization and Emissions Trading: Sparking Cost
Efficiencies in the Market 38
Deregulation in the European Power Markets: Journeying the
Time Line 38
Power Fuels Across EU 39
Supply Shortfalls & Environmental Concerns - The Nostalgia in
2003 40
Deregulation of Gas Utilities: The Market Stand 40
Table 19: Natural Gas Production in Europe by Country: Annual
Market Estimates for 2003 through 2008 in Billion Cubic
Meters for Denmark, Germany, Hungary, Italy, Netherlands,
Norway, Romania, and UK 40

Table 20: European Natural Gas Consumption by Country: Annual
Market Estimates for 2003 through 2008 in Billion Cubic Feet
for France, Germany, UK, Italy, Spain, Russia and Rest of
Europe 41

Table 21: European Natural Gas Consumption by Country:
Percentage Breakdown for 2004 and 2008 for France, Germany,
UK, Italy, Spain, Russia and Rest of Europe 41
Outlook 42
Fundamental Concerns Remain Intact 42
IT Spending in Utilities Market 42

10a. France 42
Overview 42
Electric Utilities 42
Liberalization of Small Industrial Power Markets 42
Table 22: Electricity Domestic Consumption in France:
Annual Market Estimates for 2004 through 2010 in Number of
TWh 43

Table 23: Electrical Energy Production through Energy
Sources in France: Annual Market Estimates for 2003 through
2008 in Million Tons for Coal, Oil, Natural Gas, Nuclear,
and Hydro 44

10 b. Germany 44
Overview 44
Table 24: Germany Natural Gas Consumption by Category: Annual
Market Estimates for 2003 through 2008 in Million Tons of Oil
Equivalent for Power Plants, Industry, Residential and Small
Consumers, and Others 44

Table 25: Electric Power Generation by Source in Germany:
Annual Market Estimates for 2003 through 2008 in GWH for
Hydropower, Nuclear, Hard Coal, Natural Gas, Lignite, Heating
Oil and Others 45

10c. Russia 45
Industry Overview 45
Government Initiative to Reform Market 45
RAO UES to be Liquidated 46
Competitive Landscape 46
Restructuring of Nuclear Power Industry 46
Electric Utilities 46
Reformation and Restructuring 46
Table 26: Electricity Demand in Russia: Annual Market
Estimates for 2003 through 2008 in Gigawatt Hours 47

Table 27: Electricity Power Consumption in Russia: Annual
Market Estimates for 2003 through 2008 in Terawatt Hours 47

10d. Spain 47
Overview 47
Table 28: Electricity Generation in Spain by Power Sources:
Annual Market Estimates for 2003 through 2008 for Production
Output in Giga Watt Hours for Hydro Electric, Nuclear, Coal,
and Fuel Oil/Gas 48

10e. United Kingdom 48
Overview 48
Regulatory Reviews Waiting in Wings 48
Table 29: Electricity Demand in the UK: Annual Market
Estimates for 2004 through 2010 in Thousands of Gigawatts 48

Table 30: Fuel Consumption for Electricity Generation by
Source in the UK: Annual Market Estimates for 2004 through
2010 in Millions of Tons for Coal, Oil, and Others 49
Electric Utilities 49
Table 31: UK Electrical Power Sales and Supply in the UK:
Annual Market Estimates for 2003 through 2008 in Terrawatt
Hours 49
Water Utilities 49
UK Water Bill: Modeling Water Flow in the Country 49
Gas Utilities 50
Table 32: Natural Gas Demand by End User in the UK: Annual
Market Estimates for 2003 through 2008 in Billions of Cubic
Meters for Electricity Generation, Heat Generation, Energy
Industry Use, Losses, Iron & Steel, Other Industry,
Households, Other Final Users, and Non-Energy Use 50

11. An Asia-Pacific Perspective 50
Overview 50
Liberalization in Asian Utility Sector 50
Investment Trends 51
Costs - A Major Cause of Concern 51
Electricity Market 51
An Overall Picture 51
A Regional Perspective 51
Gas Utilities 52
Industrialized & Developing Asia: A Perspective on Upcoming
Demand! 52
Table 33: Asia-Pacific Natural Gas Consumption by Region:
Annual Market Estimates for 2003 through 2008 in Billion
Cubic Feet for Australia, China, Indonesia, India, South
Korea, Malaysia and Rest of Asia-Pacific 53

Table 34: Asia-Pacific Natural Gas Consumption by Region:
Percentage Breakdown for 2004 and 2008 for Australia, China,
Indonesia, India, South Korea, Malaysia and Rest of
Asia-Pacific 53
Water Resources 54
Table 35: Asian Water Resources By Country: 2005 Per Capita
Water Availability in ‘000s of Cubic Meters for Afghanistan,
Bangladesh, Bhutan, Cambodia, China, Fiji, India, Indonesia,
Kazakhstan, Kyrgyz Republic Laos, and Others 54
Outlook 54

11a. China 55
Overview 55
Gas Utilities 55
Environment-Friendly Measures 55
Table 36: Demand for Natural Gas by Region in China: 2010
and 2015 Forecast in Billions of Cubic meters for Northeast
Region, Bohai Sea Rim, Yangtze River Delta, Central South
Region, Central Region, West Region, Southwest Region, and
Southeast Region 56
Power Utilities 56
Table 37: Power Consumption by Industry Type in China:
Annual Market Estimates for 2003 through 2008 in Billion
Kilowatt-Hours for Primary, Secondary, Tertiary Industries
and for Daily Living 56

11b.India 57
Overview 57
Power Market 57
Power Utility Sector Receives a Facelift 57
Table 38: Private Power Generation in India: 2005 Percentage
Market Share for Commissioned Capacity by Geographic Regions
for Western, Southern, and Eastern Regions 58

Table 39: Private Power Generation in India: 2005 Percentage
Market Share for Commissioned Capacity By States (Gujarat,
Maharashtra, Andhra Pradesh, West Bengal, Karnataka, Tamil
Nadu, Kerala, Bihar, and Goa) 58
Fuel Shortage - A Threat to the Sector 58

11c. Indonesia 58
Electricity 58

11d.Australia 59
Industry Deals with Workforce Crisis 59
The M&A Scenario 59

12. A Latin American Perspective 59
Overview 59
Power Utilities: A Score Card of Opportunities & Challenges 59
Electricity Consumption: A Snapshot! 60
Gas Utilities 60
Argentina: Most Resourceful Market for Natural Gas! 60
Table 40: Natural Gas Reserves in Latin America: 2005 in
Billions of Cubic Meters for Bolivia, Chile, Brazil, and
Argentina 60

12a. Brazil 60
An Industry Overview 60

13. A Middle East/African Perspective 61

13a. Middle East 61
A Brief Regional Market Scan 61
Waking Up to Fresh Investments 61
Table 41: Middle East Natural Gas Consumption by Region:
Annual Market Estimates for 2003 through 2008 in Quadrillion
British Thermal Units for Turkey, and Others 62

13b. Africa 62
Countries Grapple with Capacity Challenges 62
Focus Towards Cleaner Fuels 62
Restructuring - A Life Saver 63
Consumption and Regulation: Witnessing an Upward Spiral 63
Natural Gas 64
Table 42: Natural Gas Consumption in Africa: Annual Market
Estimates for 2003 through 2008 in Quadrillion British
Thermal Units 64
Sub-Saharan Africa - A Hotbed for Electric Utilities 64
Table 43: Electricity Demand in Kenya: Annual Market
Estimates for 2004 through 2010 in Megawatts 65
South Africa - The Largest Power Producer in Sub-Saharan Africa 65
2003 & 2004: A Review 65
Electricity Market 66


GLOBAL DIRECTORY