Power play: An expected recovery in wholesale electricity prices will lead to industry growth

Over the past five years, falling wholesale electricity prices and weak growth in demand for centrally generated electricity have contributed to a decline in industry revenue. Overall, industry revenue is expected to decline by an annualised 6.8% over the five years through 2017-18, to total $1.4 billion. While this is a poor performance, it is not reflective of the overall long-term conditions that have affected the industry. The drought in 2012 and 2013 significantly depleted the storage of water at hydro-electric power plants. This reduced the supply of electricity available on wholesale electricity spot markets and led to a spike in electricity prices. Overall, this led to strong growth in revenue and profit margins for industry operators in 2011-12 and 2012-13...read more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23

Industry Report - Industry Analysis Chapter

Operators in the Hydro-Electricity Generation industry have endured difficult trading conditions over the past five years. Falling wholesale electricity prices have been a significant drag on industry revenue, with revenue expected to decline at an annualised 6.8% over the five years through 2017-18, to reach $1.4 billion. The industry has declined despite rising generation volumes among industry operators. However, a slight recovery in the wholesale spot market price in 2017-18 is expected to contribute to revenue growth of 5.9% in the current year.Weak demand growthDemand growth from residential electricity users has been limited over the past five years. Tec...purchase to read more.

Additional Insights for the Hydro-Electricity Generation Industry

IBISWorld identifies 250 Key Success Factors for a business.The most important for the Hydro-Electricity Generation Industry are

  • Ability to accommodate environmental requirements
  • Having an integrated operation
  • Optimum capacity utilisation
  • IBISWorld analysts also discuss how external factors such as Electricity wholesale price and Level of annual rainfall in the Hydro-Electricity Generation industry impact industry performance..

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    What's in this report

    What is the Hydro-Electricity Generation in New Zealand Industry?

    Operators in the industry generate electricity through the operation of hydro-electric power plants. Operators that generate electricity through tidal energy are excluded from the industry.

    Industry Products
  • Electricity
  • Industry Activities
  • Hydro-electricity generation
  • 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
  • Level of annual rainfall
  • Net energy consumption
  • Demand from geothermal, wind and other electricity generation

  • Current Performance
  • Weak demand growth
  • Increased rainfall
  • Shift towards renewable
  • Industry structure
  • Transmission costs
  • Chart: Revenue Growth

  • Industry Outlook
  • The decline of fossil fuels
  • Tiwai Point
  • Transmission costs
  • Table: Hydro-Electricity Generation Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Non-Ferrous Metal Product Manufacturing in New Zealand
  • Electricity Retailing in New Zealand
  • Consumers in New Zealand

  • Key Selling Industries
  • Heavy Industry and Other Non-Building Construction in New Zealand
  • Heavy Machinery Repair and Maintenance in New Zealand

  • Products & Services
  • Electricity
  • Chart: Hydro-Electricity Generation Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Industrial firms
  • Households
  • Businesses
  • Agriculture, forestry and fishing firms
  • Chart: Major Market Segmentation for the Hydro-Electricity Generation 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 Hydro-Electricity Generation

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Hydro-Electricity Generation Industry

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

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Hydro-Electricity Generation 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 Hydro-Electricity Generation Industry
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Baseload Power
  • Electricity generators that runs continuously to satisfy minimum demand from the wholesale market.
  • Centrally-Generated Electricity
  • Electricity that is generated at large-scale facilities that is sold into the grid.
  • Gentailers
  • Integrated electricity generators and retailers.
  • Peaking Power
  • Electricity generators that can be switched on during periods of peak demand.
  • What Our Customers Say

    Why buy this report?

    The Hydro-Electricity Generation in New Zealand market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    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 Hydro-Electricity Generation 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 Hydro-Electricity Generation 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 Hydro-Electricity Generation 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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