Extended Expert View: Buying power of the UK's top energy buyers

Publication Date	December 2005
Publisher	Datamonitor
Product Type	Report
Pages	22
ISBN Number	not applicable
Product Code	DAT00495

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Summary

Introduction

This extended expert view examines the buying power of the UK's top energy buyers. Energy buyers are considered to be those that buy energy on behalf of their respective commercial organisation, such as buyers representing a supermarket or a car plant. This analysis excludes buyers that spend less than 30,000 on electricity or gas as these are considered to be SME buyers.

Scope

An analysis of the buying power of the UK's top energy buyers.
An estimate of the size of the market, in terms of energy buyers, through modelling up Datamonitor's extensive survey data from 2004 and 2005 surveys.
An analysis of the make up of the top gas and electricity buyers, by industry segment, classified as energy intensive and non-energy intensive.
A description of the main issues these buyers face, with opinion garnered from 50 interviews with the UK's largest buyers.

Highlights

Although the buying power of the of the UK's largest energy consumers is extremely high, they are vulnerable to the energy markets. The UK's largest buyers feel disserved by the market, yet are increasingly exposed to it because they have adopted shorter-term purchasing.

The top power buyers are not just manufacturers, but retailers, transport operators, telcos and public sector buying groups. Of the top power buyers, those in energy intensive industries have far higher demand from their sites, but the non-intensive buyers actually buy more power in aggregating sites.

Apart from public sector buying groups, the top gas buyers are in energy intensive sectors, such as chemicals and steel. It is gas buyers in energy intensive sectors that have the most buying power, through few, extremely high consumption sites.

Reasons to Purchase

Gain insight into the buying power of the UK's top energy buyers and be provided with an estimate of the size of the market.
Understand that margins are dictated by the market leader in balancing its retail and wholesale positions.

Content

Chapter 1 Executive Summary
- Although the buying power of the of the UK's largest energy consumers is extremely high, they are vulnerable to the energy markets.
Chapter 2 Buying Power Of The Uk's Top Energy Buyers
- Approximately 50,000 MEU buyers buy 400TWh of energy, of which 180TWh is power and 220TWh gas.
- The power market has a select group of energy buyers that procure the vast majority of volumes.
- In gas, the largest buyers have even more buying power, through their extremely energy intensive sites.
- The top power buyers are not just manufacturers, but retailers, transport operators, telcos and public sector buying groups.
- Of the top power buyers, those in energy intensive industries have far higher demand from their sites, but the non-intensive buyers actually buy more power in aggregating sites.
- Apart from public sector buying groups, the top gas buyers are in energy intensive sectors, such as chemicals and steel.
- It is gas buyers in energy intensive sectors that have the most buying power, through few, extremely high consumption sites.
- The UK's largest buyers feel disserved by the market, yet are increasingly exposed to it because they have adopted shorter-term purchasing.
- Were prompt or flexible gas buyers, and now considering flexibility in power buying
- Used brokers for market information or advice on flexible purchases, but only to supplement internal resources.
- Had foreseen this winter's problems with gas suppliers and are dissatisfied with the energy markets.
- Are likely to invest in reducing energy consumption further, through cheap energy being replaced by sustained high prices.
Appendix: Methodology, related reports and contact details
List Of Figures
- Figure 1: Market size for gas [_G] and power [_E] - MEU and SME
- Figure 2: Distribution of power buyers, in survey and estimated universe
- Figure 3: Distribution of gas buyers, in Datamonitor MEU survey
- Figure 4: The top power buyers are not just manufacturers, but retailers, transport operators, telcos and public sector buying groups.
- Figure 5: Chart showing total power volume, avg TWh per buyer and avg GWh per meter, by industry sector, for those consuming 150GWh+ in Datamonitor's surveys.
- Figure 6: Apart from public sector buying groups, the top gas buyers are in energy intensive sectors, such as chemicals and steel.
- Figure 7: Chart showing total gas volume, avg TWh per buyer and avg GWh per meter, by industry sector, for those consuming 300GWh+ in Datamonitor's surveys.
- Table 1: Datamonitor's industry segments