Industry Analysis & Industry Trends
Operators in the Electricity Distribution industry use networks to transport electricity from high-voltage transmission networks to households and businesses. These distribution networks are built and regulated to ensure a safe and reliable supply of electricity, even during peak demand periods in summer. Over the past five years, network operators have extended their networks substantially to account for potential rises in peak electricity demand. Regulators allow industry operators to generate a return on their capital so they can pay debt and equity holders. Historically, the amount of revenue that regulators have permitted the industry to capture from users has been proportional to the size of the industry's capital base... purchase to read more
Industry Report - Industry Investment Chapter
A high level of capital intensity characterises the industry. In 2016-17, for every dollar paid as wages, an estimated $1.13 is invested in capital. Industry players are heavily reliant on infrastructure to deliver low-voltage electricity to end users such as households and businesses. Although labour is still required to complete these services, capital costs exceed total labour requirements. Over the past five years, capital intensity has increased due to several major network expansion projects under the AER’s previous revenue determination framework.
The industry has the second-highest level of capital spending within the Electricity Supply subdivision, falling slightly below that of the Electricity Transmission industry... purchase to read more