Private power: Regulatory reforms are attracting for-profit operators to the industry

Businesses in the Electricity Retailing industry have faced mixed operating conditions over the past five years. A decline in wholesale electricity prices has limited industry revenue growth, and rising transmission and distribution costs have exerted downward pressure on profit over the period. Meanwhile, greater awareness of electricity consumption by consumers and businesses, and the increased uptake of home insulation and household solar panels have weakened per capita demand for centrally-generated electricity. Overall, industry revenue is expected to increase at an annualised 1.3% over the five years through 2018-19, to $6.2 billion. This includes expected growth of 3.0% in the current year, due to a forecast uptick in wholesale electricity more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Growth among smaller operators has contributed to increased employment over the past five years
  • Five major gentailers make up close to 80% of all electricity generation and retailing
  • Regulatory reforms over the past decade are expected to continue to affect the industry
  • Industry Report - Industry Key Buyers Chapter

    The Electricity Retailing industry is characterised by a high degree of market share concentration. The industry is dominated by the five major gentailers: Contact Energy, Genesis Energy, Mercury Energy, Meridian Energy and Trustpower. These five generator companies, all of which have retailing arms, account for as much as 90% of New Zealand's electricity generation. They are expected to account for 81.4% of the Electricity Retailing industry in 2018-19. As of March 2018, these five players command a market share (as measured by total installation control points or ICPs) of 88.7%. Adding to the high degree of market concentration is the New Zealand Government's part (51%) ownership of Genesis, Mercury and Meridian. The...purchase to read more.

    Additional Insights for the Electricity Retailing Industry

    IBISWorld has determined the most important Key Success Factors for the Electricity Retailing are:

  • Ability to effectively manage risk
  • Ability to alter goods and services produced in favour of market conditions
  • Ability to allocate product/service to area of greatest need
  • IBISWorld analysts also discuss how external factors such as Electricity wholesale price and Demand from electricity transmission and distribution in the Electricity Retailing industry impact industry performance..

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    What's in this report

    What is the Electricity Retailing in New Zealand Industry?

    Industry operators purchase electricity on the wholesale electricity spot market and onsell it to consumers and businesses.

    Industry Products
  • Hydro-electricity
  • Fossil fuel electricity
  • Geothermal electricity
  • All other electricity
  • Industry Activities
  • Electricity retailing
  • Electricity market operation
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Electricity wholesale price
  • Demand from electricity transmission and distribution
  • Level of annual rainfall
  • Net energy consumption

  • Current Performance
  • Regulatory changes
  • Industry structure
  • Profit margins
  • Chart: Revenue Growth

  • Industry Outlook
  • Industry participation
  • Electricity consumption
  • Tiwai Point Aluminium Smelter
  • Table: Electricity Retailing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Electricity Retailing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers in New Zealand

  • Key Selling Industries
  • Fossil Fuel Electricity Generation in New Zealand
  • Geothermal, Wind and Other Electricity Generation in New Zealand
  • Hydro-Electricity Generation in New Zealand

  • Products & Services
  • Hydro-electricity
  • Geothermal electricity
  • Fossil fuel electricity
  • All other electricity
  • Chart: Electricity Retailing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Households
  • Commercial users
  • Industrial users
  • Agriculture, forestry and fishing firms
  • Chart: Major Market Segmentation for the Electricity Retailing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Electricity Retailing

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Electricity Retailing Industry

  • Industry Globalization
    Contact Energy Limited, Genesis Energy Limited, Mercury NZ Limited, Meridian Energy Limited, TrustPower Limited,
  • Table: Contact Energy Limited - financial performance
  • Table: Genesis Energy Limited - financial performance
  • Table: Mercury NZ Limited - financial performance
  • Table: Meridian Energy Limited - financial performance
  • Table: TrustPower Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Electricity Retailing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Electricity Retailing Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • Stands for earnings before interest, tax, depreciation and amortisation, and fair value adjustments, and is commonly used in the electricity industry as a measure of profit.
  • Gentailer
  • The term refers to generator-retailers, vertically integrated energy companies involved in electricity generation and retailing.
  • Installation Control Points (Icp)
  • ICPs refer to the installation control points managed by an electricity retailer and can be used as a measure of market share.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Electricity Retailing in New Zealand market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Electricity Retailing in New Zealand:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Electricity Retailing in New Zealand market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Electricity Retailing in New Zealand, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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