Low flow: Subdued rainfall has reduced water catchment volumes, causing revenue to dry up

Falling wholesale electricity prices and weak demand growth for centrally generated electricity have contributed to a decline in the Hydro-Electricity Generation industry's revenue over the past five years. Overall, industry revenue is expected to fall by an annualised 3.5% over the five years through 2017-18, to $1.2 billion. While this represents a poor performance over the period, it does not reflect the wider long-term conditions that have affected the industry. Drought in 2012 significantly depleted the availability of water at hydro-electric power plants. This reduced industry output and restricted the supply of electricity available on wholesale electricity spot markets, leading to a spike in electricity prices...read more.

Industry Statistics & Market Size
Revenue
$1bn
Annual Growth 13-18
-3.5%
Forecast Growth 18-23
Profit
Employment
1,634
Businesses
27

Industry Threats & Opportunities

  • Falling wholesale electricity prices have contributed to revenue declines over the past five years
  • Hydro-electric power plants’ ability to boost supply is limited by rainfall and water storage levels
  • Electricity generation in New Zealand is expected to continue to shift away from fossil fuels
  • Industry Report - Industry Key Buyers Chapter

    The Hydro-Electricity Generation industry is extremely concentrated. In 2017-18, the industry's four largest players, Meridian Energy, Mercury NZ, Contact Energy and Genesis Energy - are expected to account for over 90% of total industry revenue. Most economical large-scale hydropower plants have already been established in New Zealand. Furthermore, all industry players are integrated energy players, with significant retail operations that complement their generation businesses. As a result, it is extremely difficult for any new player to access the funding, resource consents, distribution networks and brand necessary to challenge the industry's major players. Market share concentration has therefore remained at a high level over the past five years...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?

    Industry operators generate electricity through operating 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 renewables
  • 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
  • Profit
  • Depreciation
  • Wages
  • Purchases
  • Contracting
  • Other
  • 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
    Includes:
  • 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
    Base Load 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?

    IBISWorld’s Hydro-Electricity Generation 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 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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