A Business report of British electricity distributor industry Term Paper

A Business report of British electricity distributor industry - Term Paper Example Other than enabling consumers to access electricity, electricity distribution industry also creates employment, enhances investment and promotes economic growth. This report examines the structure of electricity consumption industry, including the firms that make up the industry and their market share. It also explains the reason for the chosen structure. Furthermore, this report analyses the contribution of the electricity distribution industry to the economy. It also provides a critical analysis of sustainability targets on business plan for the industry as well as the factors that contribute competitive advantage for the electricity distribution industry in UK. The market structure of UK electricity distribution industry is an oligopoly. An oligopoly is a market structure which involves the domination of a few firms in an industry, although smaller firms with small market shares may exist in the market. In this case, a few firms may be concentrated. The UK electricity distribution industry consists of six large electricity distributors with a total of 90% market share. The remaining market share is held by smaller networks owned and operated by Independent Network Operators (IDNOs) which operate within the areas covered by the larger firms. The market shares of major British electricity Distribution Networks (DNOs) is divided by regions, as shown in appendix one. Each serves specific region. The six distributors by region include: UK Power Networks, Western Power Distribution, SSE Power Distribution, SP Energy Networks, Northern Powergrid, and Electricity Northwest. In a competition newsletter of 2014, UK Power Networks (UKPN) analysed the market share of its distributors in its designed regions. The newsletter categorised the market share into three: Eastern Power Networks plc (EPN), London Power Networks plc (LPN) and South Eastern Power Networks plc (SPN). The market shares for the three distributors are