Economic growth and rising industrial activity will provide a strong foundation for revenue growth over the next five years, according to a report from Ibis World. Consumers will increase their electricity use as incomes rise, and expanding businesses will support demand for electricity as well. Furthermore, concerns over greenhouse gas emission will stimulate demand for natural-gas. While renewable energy-based generation will pose a competitive threat to the industry, it will not likely grow significantly over the next five years.
Prospective entrants to the coal and natural gas power industry must have large amounts of capital to invest in a generating station and considerable expertise in the energy sector. Permitting is also a large hurdle for new entrants as it will be difficult to gain permits for new generation stations without a good track record and significant prior experience.
Barriers to entry were reduced somewhat by the easing of regulations governing electricity generators and the move to a more competitive electricity market from the second half of the 1990s onward. Electricity utilities in states that have deregulated some of the electricity market are divesting themselves of generating plants.
This industry operates fossil fuel-powered electricity generating plants. The steam generated by burning coal and gas is used to power turbines that generate electricity. Industry operators sell generated power to regulated transmission and distribution utilities and on wholesale electricity markets.
Subscribe to Power Engineering magazine