The Top 10 European Utility Companies: Growth strategies, consolidation and convergence in the leading players

Table of Contents

Executive Summary

• Market context
• Eni SpA
• E.ON AG
• Electricite de France SA
• RWE AG
• SUEZ SA
• Enel S.p.A.
• Gaz de France
• Centrica plc
• ENDESA, S.A.
• Gasunie Trade & Supply B.V.

Chapter 1 Introduction

• What is this report about?
• Methodology

Chapter 2 Market context

• Overview
  • Global Electricity Consumption
  • Global Supply and Fuel Sources
  • Electricity Consumption in Europe
  • Electricity Supply in Europe
  • Electricity Prices in Europe
  • Outlook for electricity prices
  • Gas Consumption in Europe
  • Gas Production and Supply in Europe
  • Gas Prices
• The State of Deregulation
• Mergers & Acquisitions and Key Players
  • Emergence of Key Players
• The European Emission Trading System

Chapter 3 Eni SpA

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply and Transmission
  • Other Gas Related Businesses
• SWOT Analysis
  • Strengths
    • High level of diversification
    • Consistent financial growth
  • Weaknesses
    • Declining margins of gas and power division
  • Opportunities
    • Demand for natural gas in Italy
    • Fast growing LNG markets
  • Threats
    • Changes in the system of transmission network access
    • Increased political risk
• Mergers & Acquisitions
• Future Outlook

Chapter 4 E.ON AG

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• SWOT Analysis
  • Strengths
    • Dominant business position
    • Streamlined operations
    • Sound financial condition
  • Weaknesses
    • Significant exposure to German regulatory changes
  • Opportunities
    • Strategic alliance
    • Heavy Investments
    • Italian Market
  • Threats
    • Uncertainty of Russian Gas Supplies
    • Unfavorable weather conditions
• Mergers & Acquisitions
• Future Outlook

Chapter 5 Electricite de France SA

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• SWOT Analysis
  • Strengths
    • Leadership position
    • Global Coverage
    • Increased profitability
  • Weaknesses
    • Latin American operations
    • Large unionized workforce
  • Opportunities
    • Renewal of nuclear generation infrastructure
    • Potential growth in renewable energy
    • Focus on growth in China
  • Threats
    • Deregulation of the French markets
    • Sensitivity to weather
    • Government regulations
• Mergers & Acquisitions
• Future Outlook

Chapter 6 RWE AG

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• SWOT Analysis
  • Strengths
    • Diverse range of services
    • Strong market position
  • Weaknesses
    • Decline in electricity sales volume and power generation
  • Opportunities
    • Concession agreement in Egypt
    • New discoveries of oil and gas
    • Expansion of wind power capacity
    • Increased cash flow from divestment of water business
  • Threats
    • Environmental regulations
    • Saturation of resources in North Sea
    • Unfavorable weather conditions
    • German regulatory changes
• Mergers & Acquisitions
• Future Outlook

Chapter 7 SUEZ SA

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• SWOT Analysis
  • Strengths
    • Market leader in Benelux
    • Diversified operations
    • Financial strength
    • Environment-friendly generating facilities
  • Weaknesses
    • Dependence on mature market
    • Rising fuel costs
  • Opportunities
    • Proposed merger with GDF
    • Expansion in Italy
    • Development of renewable energy sources
    • Research opportunities
  • Threats
    • Deregulation of electricity and gas markets
    • Increased competition
    • Execution risks related to large acquisitions/mergers
• Mergers & Acquisitions
• Future Outlook

Chapter 8 Enel S.p.A.

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply
• SWOT Analysis
  • Strengths
    • Strong market position
    • Strong financial performance
    • Significantly high residual asset life
    • Varied fuel mix
  • Weaknesses
    • Cartel probe against Enel
  • Opportunities
    • Increase in Coal plants
    • Foreign operations expansion
    • Demand for natural gas in Italy
  • Threats
    • Volatile fuel prices and supplies in future
    • Regulation in the generation segment
    • Large number of legal proceedings
• Mergers & Acquisitions
• Future Outlook

Chapter 9 Gaz de France

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation and Supply
  • Gas Transmission and Storage
  • Gas Distribution and Supply
  • Other Businesses
• SWOT Analysis
  • Strengths
    • Leading market position in Europe
    • Strong growth of energy supply and services segment
    • Strong cash position
  • Weaknesses
    • Increasing business risk
  • Opportunities
    • Proposed merger with SUEZ
    • Growth of electricity business
    • Acquisition of Distrigaz Sud
  • Threats
    • Liberalization of French gas markets
    • Growing demand for energy from renewable resources
    • Saturation of resources
• Mergers & Acquisitions
• Future Outlook

Chapter 10 Centrica plc

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply
• SWOT Analysis
  • Strengths
    • Major UK gas supplier
    • Diversified business interests
    • Largest gas storage reservoir
  • Weaknesses
    • Customer losses
    • Declining profits of the UK businesses
    • Low electricity generating capacity
  • Opportunities
    • Strong demand for gas storage capacity
    • Rising UK gas demand
    • Rising gas demand in North America
  • Threats
    • Regulatory threats
    • Slowing deregulation opportunities
    • No regulated assets
    • Weather risk
• Mergers & Acquisitions
• Future Outlook

Chapter 11 ENDESA, S.A.

• Summary
• Company Information
• Current Business and Strategy
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• SWOT Analysis
  • Strengths
    • Large scale of operations
    • Diversified operations
    • Sound financial condition
  • Weaknesses
    • Unfavorable generation portfolio
    • Decline in hydroelectric production
  • Opportunities
    • High growth in the Spanish market
    • Growth in Italian retail market
    • Growth in renewable energy
  • Threats
    • Increasing oil prices
    • Liberalization of the European electricity industry
    • Regulatory changes
    • Increased Latin American operations
• Mergers & Acquisitions
• Future Outlook

Chapter 12 Gasunie Trade & Supply B.V.

• Summary
• Company Information
• Current Business and Strategy
  • Gas Sales
  • Other Businesses
• SWOT Analysis
  • Strengths
    • Part of a strong business group
  • Weaknesses
    • Limited geographical exposure
    • Decline in sales volume
  • Opportunities
    • Good outlook for gas sales
    • High potential of the export market
  • Threats
    • Liberalization of gas markets in the EU
    • Stringent environmental norms
    • Pressure from the EU
• Future Outlook

Chapter 13 Companies ranked 11 to 20

• Vattenfall AB
  • Company Information
  • Power Generation
  • Power Supply
  • Other Businesses
• Iberdrola S.A.
  • Company Information
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• Energie Baden-Wurttemberg AG
  • Company Information
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• Wintershall AG
  • Company Information
  • Gas Supply
  • Other Businesses
• Scottish Power plc
  • Company Information
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• EWE AG
  • Company Information
  • Power Supply
  • Gas Supply
  • Other Businesses
• Edison S.p.A.
  • Company Information
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• Essent N.V.
  • Company Information
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• Union Fenosa S.A.
  • Company Information
  • Power Generation
  • Power Supply
  • Gas Supply
  • Other Businesses
• N.V. Nuon
  • Company Information
  • Power Generation
  • Power, Gas and Heat Supply
  • Other Businesses

Chapter 14 Future Outlook for European

• Utilities
• Outlook
• SWOT Analysis
  • Strengths
    • Improved financial performance
    • Focused business strategy, reduced risks
    • M&A activity will result in additional synergies
  • Weakness
    • Lack of integration in the European market
    • Low secular growth in Europe
    • High capital expenditure requirements
  • Opportunities
    • Full competition from July 2007
    • Return of nuclear power
  • Threats
    • Uncertainty in regulation
    • Fuel security and prices
    • Mergers & Acquisitions
    • Increased competition
• Abbreviations