Fossil Fuel Power Generation
Companies in this industry operate electric power generation facilities that produce electrical energy from fossil fuels. Major companies include American Electric Power, Duke Energy, and Southern Company (all based in the US), along with China Energy, China Power, NTPC (India), SSE (UK), and Tokyo Electric Power Company (Japan).
Power producers worldwide generate about 24,000 terawatt hours (TWh) of electricity, according to the International Energy Agency. Fossil fuels -- primarily coal and natural gas -- account for about 65% of that total. Among countries, leading electricity generators are China, the US, India, Russia, and Japan. About 15% of the world's population does not have access to electricity. This unmet demand will drive industry growth, primarily in India and in several countries in Africa.
The US fossil fuel-powered electricity generation industry consists of about 1,500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $80 billion.
Government entities and cooperatives that own generating plants are not included in US statistics for the industry. Companies that transmit and distribute electricity are covered in the Electric Power Transmission, Distribution & Marketing industry profile. Companies that generate electricity from both renewables and fossil fuels are covered in the Electric Power Generation 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.
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 US industry is highly concentrated: the 50 largest companies account for about 85% of revenue.
In about 15 states and the District of Columbia, retail electricity markets have been fully or partly deregulated to encourage competition. In deregulated markets, ownership of generating plants is typically separated from ownership of transmission and distribution facilities.
Products, Operations & Technology
The primary product of the industry is alternating current (AC) electrical power. Electricity is produced by generators that convert mechanical energy
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms