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Utility Capital Expenditure (Industrial report) - UK - July 2013

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This report is segmented between the following sectors:
  • Water & Sewerage
  • Electricity Generation 
  • Electricity Transmission 
  • Electricity Supply 
  • Gas Transmission 
  • Gas Supply.
The definitions of each area of expenditure tend to vary between the individual market sectors and can be broadly categorised as follows:
 
Water & Sewerage

Water resources fall into three main categories:
Resource development, which is the replacement of water resource assets, and the provision of additional capacity to improve current levels of service, and to meet future demand for potable water. Reservoir safety, which is expenditure required under the Reservoirs Act (1975). Aqueduct refurbishment, which refers to raw water aqueducts associated with potable water supplies.
 
Water treatment expenditure covers:
New development, which is the provision of water treatment assets to provide for new customers, and to accommodate increased use of water by existing customers. Water quality (nitrates), which refers to the provision of water treatment assets or processes to comply with the requirements of the EC Directive on Drinking Water Quality in respect of nitrates. Water quality (other), which is similar to that above only for parameters other than nitrates. Works refurbishment, which is the replacement and preservation of water treatment assets.
 
Water distribution capital expenditure refers to:
New development, which is the provision of assets to enable distribution systems to accommodate increased usage of water by existing customers, and to provide for new customers. Discolouration, which refers to work on the distribution systems necessary to comply with the Drinking Water Directive with respect to iron and colour, and undertakers' own internal standards for discolouration. Bacteriological quality, which refers to work on distribution systems necessary to eliminate bacteriological problems, and problems of compliance with hygiene codes. All communication pipes, which is the replacement of the pipes that connect the water main in the street to the stop tap at the customer's boundary. Inadequate pressure refers to expenditure on work undertaken to comply with the target level of service relating to adequate pressure. Supply interruptions, which is work undertaken to comply with the target level of service relating to interruptions to supply. Other relining and renewal, which is the relining or similar renovation of distribution networks to prolong asset life, and the renewal of water distribution mains where useful life has ended not covered above.
 
Electricity Generation:
Includes expenditure on transmission, distribution, generating equipment, plant and machinery, infrastructure, land and buildings and assets in the course of construction. It also includes fixtures and equipment, vehicles and mobile plant and other non-operational activities.
 
Electricity TransmissionLoad-Related Capex: the installation of new assets to accommodate changes in the level or pattern of electricity or gas supply and demand.Non-Load-Related Capex: the replacement or refurbishment of assets which are either at the end of their useful life due to their age or condition, or need to be replaced on safety or environmental grounds.
 
Electricity Supply
Capital expenditure is defined by Ofgem as any expenditure which, for the purpose of the regulatory accounts, has been included in the value of the fixed assets of the distribution business provided that:
 
(a) the expenditure conforms with at least one of the following: the expenditure relates to the purchase, development or construction of a new asset the expenditure will increase the capacity or functionality of the distribution assets the expenditure will significantly reduce the ongoing maintenance of the assets the expenditure will extend the service life of distribution assets beyond that expected when the assets were originally installed.
 
(b) the expenditure is determined in accordance with applicable accounting standards. Capital expenditure excludes the following: renewal and replacement of insulation medium in switchgear, whether reprocessed or not capitalised interest revaluation amounts.
 
Gas Supply
Total capital expenditure figures include total allowed capital expenditure and replacement (repex) expenditure. It includes spending on LTS & storage facilities, connections, mains reinforcement, other operational and non-operational.
 
Gas Transmission Load-Related Capex: the installation of new assets to accommodate changes in the level or pattern of electricity or gas supply and demand. Non-Load-Related Capex: the replacement or refurbishment of assets which are either at the end of their useful life due to their age or condition, or need to be replaced on safety or environmental grounds.
 
All values quoted in this report are at current prices unless otherwise specified.

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Table of contents

  1. Executive Summary

    • Introduction

        • Water & Sewerage
          • Electricity Generation
            • Electricity Supply
              • Gas Supply
                • Methodology
                  • Abbreviations
                    • Market Positioning
                      • Customers
                        • Suppliers
                          • UK Economy
                            • Market Factors
                            • Water Industry

                              • Chapter Summary
                                • Capital Expenditure
                                  • Figure 1: Total Capital Expenditure by Water and Sewerage Companies in England & Wales, 2005-10 and 2010-15
                                  • Figure 2: Total Capital Expenditure by Water-only Companies in England & Wales, 2005-10 and 2010-15
                                  • Figure 3: Actual UK Capital Expenditure on Water and Sewerage Services, 2005/06-2010/11
                                  • Figure 4: UK Capital Expenditure on Water and Sewerage Services, 2005/06-2010/11
                                  • Figure 5: Analysis of Water-related Capital Expenditure, by Water and Sewerage Companies in England and Wales, 2006/07-2010/11
                                  • Figure 6: Analysis of Water Capital Expenditure, by Water and Sewerage Companies, by Purpose, 2010/11
                                  • Figure 7: Analysis of Water Capital Expenditure by Water-only Companies, by Type, 2010/11
                                  • Figure 8: Analysis of Sewerage-related Capital Expenditure in England and Wales, by Company, 2005/06-2010/11
                                  • Figure 9: UK Capital and Process Plant Expenditure by the Water and Sewerage Industry, 2006/07-2010/11
                                  • Figure 10: UK Capital and Civil Engineering Expenditure by the Water and Sewerage Industry, 2006/07-2010/11
                                  • Figure 11: Civil Engineering Construction Output by the Sewerage Industry in Great Britain, 2007-12
                                  • Figure 12: Sewers Renovated and Replaced in England and Wales, by Company, 2006/07-2010/11
                                  • Figure 13: UK Capital and Building Expenditure by the Water and Sewerage Industry, 2006/07-2010/11
                                  • Figure 14: UK Capital and Other Expenditure by the Water and Sewerage Industry, 2006/07-2010/11
                                  • Figure 15: Analysis of Water Capital Expenditure in England and Wales, by Water and Sewerage Companies, by Type, 2007/082010/11
                                  • Figure 16: Analysis of Water Capital Expenditure in England and Wales, by Water-only Companies, by Type, 2007/08-2010/11
                                  • Figure 17: Analysis of Scottish Water Capital Expenditure on Water and Sewerage Services, 2006/07-2011/12
                                  • Figure 18: Progress of Scottish Water to Date in the Five-year Investment Programme, 2010-15
                                  • Figure 19: Progress of Scottish Water to Date in the Five-year Investment Programme, 2010-15
                                  • Figure 20: Sewerage-related Capital Expenditure in Northern Ireland, by Type, 2007/08-2011/12
                                  • Figure 21: Annual Price Limits for Water and Sewerage Companies, 2010/11-2014/15
                                  • Figure 22: Annual Price Limits Water-only Companies, 2010/11-2014/15
                                  • Figure 23: Average Expected Household Bill, by Water and Sewerage Companies, 2009/10 and 2014/15(£ 2009/10 prices)
                                  • Figure 24: Average Expected Household Water Bill, by Water-only Companies, 2009/10 and 2014/15(£ 2009/10 prices)
                                  • Figure 25: UK Population, by Region, 2011-25
                                  • Figure 26: Total Proposed Capital Expenditure by Water and Sewerage Companies in England & Wales, 2010-15
                                  • Figure 27: Forecast UK Capital Expenditure on the Water and Sewerage Industry, 2010/11-2014/15
                                  • Figure 28: Forecast Capital Expenditure for Scottish Water, 2010/11-2014/15(£ Million at 2011/12 prices)
                                  • Figure 29: Forecast Investment Programme for Northern Ireland Water, 2010/11-2014/15
                              • Electricity Industry

                                • Chapter Summary
                                  • Capital Expenditure
                                      • Figure 30: UK Capital Expenditure by the Electricity Distribution Networks, 2007/082011/12
                                      • Figure 31: Capital Expenditure by the Electricity Distribution Network Operators in Great Britain, by Company, 2007/08-2011/12
                                      • Figure 32: DNOs’ Activity Costs in England and Wales, 2010/11
                                    • Process Plant Expenditure
                                      • Figure 33: UK Capital and Process Plant Expenditure by the Electricity Distribution Network Operators, 2007/08-2011/12
                                    • Civil Engineering Expenditure
                                      • Figure 34: UK Capital and Civil Engineering Expenditure by the Electricity Distribution Network Operators, 2007/08-2011/12
                                    • Other Expenditure
                                      • Figure 35: UK Capital and Other Expenditure by the Electricity Distribution Network Operators, 2007/08-2011/12
                                    • Forecast Capital Expenditure
                                        • Figure 36: Forecast UK Capital Expenditure of the Electricity Distribution Network Operators, 2012/132016/17
                                      • Forecast Process Plant Expenditure
                                        • Figure 37: Forecast UK Capital and Process Plant Expenditure by the Electricity Supply Industry, 2012/13-2016/17
                                      • Forecast Civil Engineering Expenditure
                                        • Figure 38: Forecast UK Capital and Civil Engineering Expenditure by the Electricity Distribution Network Operators, 2012/13-2016/17
                                      • Forecast Other Expenditure
                                        • Figure 39: Forecast UK Capital and Other Expenditure on the Electricity Distribution Network, 2012/13-2016/17
                                    • Gas Industry

                                      • Chapter Summary
                                        • Capital Expenditure
                                          • The Market 2008-12
                                            • Figure 40: Total Gas Transmission and Distribution Capital Expenditure, 2007/08-2011/12
                                            • Figure 41: Total Gas Transmission Capital Expenditure, 2007/08-2011/12
                                            • Figure 42: Total Gas Distribution Capital Expenditure, 2007/08-2011/12
                                          • Forecast 2013-17
                                              • Figure 43: Ofgem’s Required Expansion of the Number of Properties to Alleviate Fuel Poverty, 2013-21
                                              • Figure 44: Capital Expenditure Boundaries for National Grid Gas Considered for Ofgem’s RIIO-T1, 2014-21(£ Million at 2010 Prices)
                                              • Figure 45: Capital Expenditure Plans by National Grid Gas Under RIIO-T1, by Category, 2014-21(£ Million at 2010 Prices)
                                              • Figure 46: Controllable Cost Allowances for Gas Distribution Companies Under (RIIOGD1), 2014-21
                                          • Supply Industry Structure

                                            • Chapter Summary
                                              • Companies
                                                • AMEC
                                                    • Figure 47: Financial Analysis of AMEC, 2008-12
                                                    • Figure 48: Financial Analysis of Balfour Beatty, 2008-12
                                                    • Figure 49: Financial Analysis of Balfour Beatty, by Segment, 2009-12
                                                    • Figure 50: Financial Analysis of Kellogg Brown & Root Holdings, 2007-11
                                                    • Figure 51: Financial Analysis of Costain Group, 2008-12
                                                    • Figure 52: Financial Analysis of Laing O’Rourke, 2008-12
                                                    • Figure 53: Financial Analysis of Laing O’Rourke Utilities, 2008-12
                                                    • Figure 54: Financial Analysis of Morrison Utility Services, 2008-12
                                                    • Figure 55: Financial Analysis of McNicholas Construction (Holdings), 2009-13
                                                    • Figure 56: Financial Analysis of Forefront Utilities, 2008-12
                                                • Further Sources & Contacts

                                                    • Trade Magazines
                                                      • Trade Exhibitions

                                                      Companies Covered

                                                      To learn more about the companies covered in this report please contact us.

                                                      Utility Capital Expenditure (Industrial report) - UK - July 2013

                                                      US $1,321.06 (Excl.Tax)