Electric Power Generation

Brief Excerpt from Industry Overview Chapter:

The US electric power generation industry consists of about 480 companies with combined annual revenue of about $120 billion. Major companies include American Electric Power, AES, Dominion Resources, Duke Energy, and Exelon. The industry is highly concentrated: the 50 largest companies account for about 85 percent of revenue.

Government entities and cooperatives that own generating plants are not included in the industry. Companies that transmit and distribute electricity are covered in the Electric Power Transmission, Distribution & Marketing industry profile. Companies that generate electricity only from wind are covered in the Wind Power Generation profile. Companies that generate electricity only from the sun are covered in the Solar Power Generation profile.

The global electricity industry generates about 20 trillion kilowatt hours (KWh) of electricity. The leading countries in electricity generation are the US, China, Japan, and Russia. Large companies based outside the US include China Datang Group and China Power; Tokyo Electric Power Company; and Inter RAO (Russia).

COMPETITIVE LANDSCAPE

Demand is driven by commercial, government, and residential needs for electrical power, which depend mainly on economic activity and population growth. Profitability is determined by government regulations and fuel costs. Large companies have an advantage in negotiating fuel contracts and being able to pass the costs of implementing government regulations directly to consumers. Small companies can compete effectively by exploiting market niches, such as offering green power in regulated markets. The industry is capital-intensive: average annual revenue per employee...