Electricity Supply and Distribution (Industrial Report) - UK - June 2014
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“The country’s ageing infrastructure assets continue to drive capital investment in the electricity distribution industry. Distribution network operators are also ramping up investment in new technologies to accommodate higher quantities of distributed generation and low carbon technologies on the grid.”
– Claudia Preedy, Industrial Analyst
This report will explore the following key questions facing the UK electricity supply and distribution industry:
The terms of reference for this report are predominately the 15 DNOs in the UK, comprising 12 in England and Wales (though some are now grouped within broader companies), two vertically integrated companies in Scotland, and one in Northern Ireland. The report examines the capital expenditure of those companies, and their financial performance, as well as providing an insight into the key challenges facing the industry. The report also covers the electricity supply sector, providing an analysis of its key competitors and issues.
The electricity industry in Great Britain explained:
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 a distribution business provided that:
(a) the expenditure conforms with at least one of the following:
(b) the expenditure is determined in accordance with applicable accounting standards.
Capital expenditure excludes the following:
Faults costs are defined as the reactive replacement of a system asset following an occurrence where the asset’s functional failure has resulted in an unplanned incident and where the asset must be replaced before full system functionality can be restored. This includes expenditure incurred following an unplanned incident, as defined for Quality of Service reporting, where such costs are the result of physically replacing assets to return them to their pre-incident performance. Fault costs cease when supplies have been restored, rectification works have been completed and the DNO foresees no further work to be required to achieve pre-incident performance.
However, this excludes:
Load related new connections and reinforcements costs include new system assets installed on the network as a result of a new customer connection (contestable and non-contestable works), reinforcement as a result of a new connection, and general reinforcement required due to changes in demand on the system.
Non-Load, non-fault new and replacement assets costs include the installation of new assets and the planned installation of replacement assets for reasons other than fault replacement or load-related reasons. Related expenditure refers to spending on maintaining the integrity, safety and performance of the distribution network.
Non-operational capital costs are defined as spending on new and replacement assets that are not system assets. This includes:
Engineering indirects costs include activities of network policy, network design, project management and engineering management and clerical support.
Network indirects costs refer to activities of wayleave administration, control centre, system mapping, call centre, stores and procurements, vehicles and transport, health and safety, and operational training.
Business support costs include activities of IT and telecoms, property management, HR and non-operational training, finance and regulation, CEO, etc.
This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:
What They Want. Why They Want It.
Who’s Winning. How To Stay Ahead.
Size, Segments, Shares And Forecasts: How It All Adds Up.
New Ideas. New Products. New Potential.
Where The White Space Is. How To Make It Yours.
What’s Shaping Demand – Today And Tomorrow.