NRG Energy Competition
Now Viewing NRG Energy's competition in: Electric Energy Distribution (primary)
Recent Developments
Energy Metering Arrives - Real-time monitoring of energy use is coming, which for electric energy distributors could mean reduced strain on the electricity grid. Research shows that the use of "smart meters," which allow monitoring of electricity use for homes and businesses, reduces the overall amount of energy used, the cost of energy for consumers, and could make managing electric grids smoother. California's Pacific Gas & Electric Company (PG&E) will install 10 million of the meters by 2011; Texas, Colorado, Maryland, and Ontario are other North American sites considering plans.
State Standards Impact Energy Sources - Many US states require that a specific percentage of electricity come from renewable fuel sources, such as wind power or solar energy. As a result, distributors are increasingly looking for new sources of electricity. Recently, PG&E agreed to buy power produced by a new solar power facility in California that's the largest solar facility ever built in the US. California requires that 20 percent of utility companies' energy come from renewables by 2010.
Work Continues on National Grids - 2003's massive blackout, which caused an estimated 50 million people to lose power in North America, continues to impact the electricity distribution industry in the form of ongoing grid improvements. The North American Electric Reliability Corporation (NERC) is leading the improvement trend with mandatory rules designed to ensure greater reliability, and potential fines to back them up. NERC notes that new technologies will soon improve grid reliability, including bettering monitoring systems to alert officials of problems early.
Competitive Landscape
The electric energy industry in the US is currently in a state- and federally-sponsored transition, or Electric Restructuring. The traditional electricity industry consists of large investor-owned utilities (IOUs); municipal utilities; rural cooperatives; and government entities, like the Tennessee Valley Authority (TVA), that own the generation, transmission, and retail distribution facilities within a limited area, and serve all customers within that area as tightly regulated "natural monopolies." Under restructuring, the generation, transmission, and distribution operations are carried out by separate companies, and the owners of local distribution lines make their lines available to competitors. About half the states have adopted restructuring legislation, but only a third are actively engaged in restructuring.
Electric Energy Distribution Industry Forecast
from Hoover's/D&B subsidiary First Research
The output of US electric utilities, which includes distribution, is forecast to grow at an annual compounded rate of 4.7 percent between 2008 and 2013.
Electric Utility Growth Stabilizes
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Opportunity Rating
The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.
- Demand: Depends on business/industrial activity
- High fixed costs
- Risk: Slow economy cuts use
Industries Where NRG Energy Competes
- Energy & Utilities
- Independent/Merchant Power Production (primary)
- Alternative Energy Sources
- Energy Trading & Marketing
- Wholesale Energy Trading & Marketing
