Electric Utilities Industry Profile

Companies in this industry generate, transmit, and distribute electric power. Major companies include Duke Energy, Exelon, and Southern Company (all based in the US), as well as EDF (France), Enel (Italy), EON (Germany), and TEPCO (Japan).

The global electricity industry generated more than 29,000 terawatt hours (TWh) of electricity in 2022, according to Statista. Leading countries in electricity generation include China, the US, and India. Power generation declined globally due to lower electricity demand in 2020 driven by the COVID-19 pandemic.

The US electric utilities industry includes about 11,500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $460 billion.

COMPETITIVE LANDSCAPE

Although deregulation has altered power markets in many nations, electric utilities often continue to operate as unofficial monopolies in a given service territory. A growing number of countries have deregulated or are moving to deregulate their energy markets, including Canada, the US, Austria, Germany, Australia, New Zealand, Japan, and South Korea, among others, according to Electric Choice. The intended purpose of moving toward a less-regulated electricity market is to decrease the cost of electricity by fostering competition among producers. One practical effect is the divestment of generation facilities by many investor-owned and government-owned utilities.

Profitability in the electric utility industry is determined by government regulations and fuel costs. Large companies have an advantage in negotiating fuel contracts. Small companies can compete effectively by exploiting market ...