The global electricity market, valued at est. $5.1 trillion in 2023, is projected to grow at a 4.7% CAGR over the next five years, driven by electrification and economic expansion. While single-phase supply is a subset of this market, its price and availability are dictated by these broader dynamics. The market is characterized by high price volatility tied to natural gas and increasing regulatory pressure for decarbonization. The single biggest opportunity lies in leveraging long-term renewable energy contracts, such as Power Purchase Agreements (PPAs), to hedge against price volatility and meet corporate ESG mandates.
The Total Addressable Market (TAM) for global electricity supply is substantial and expanding. Growth is primarily fueled by industrialization in emerging economies, the electrification of transportation and heating, and the increasing power demands of digital infrastructure like data centers. The three largest geographic markets are China, the United States, and India, collectively accounting for over half of global consumption. While the UNSPSC code specifies single-phase, market analytics are based on the total electricity market, as generation and transmission assets serve all load types.
| Year | Global TAM (USD) | Projected CAGR (5-Yr) |
|---|---|---|
| 2023 | est. $5.1 Trillion | — |
| 2028 | est. $6.4 Trillion | 4.7% |
[Source - IEA, Mordor Intelligence, Jan 2024]
The market is dominated by large, capital-intensive, and often state-owned or regulated utilities. True "competition" is typically limited to deregulated retail markets. Barriers to entry are exceptionally high due to massive capital requirements for generation and transmission assets, complex regulatory approvals, and entrenched incumbents.
⮕ Tier 1 Leaders * State Grid Corporation of China: The world's largest utility, operating as a state-owned monopoly with unparalleled scale in transmission and distribution. * NextEra Energy (US): The largest utility in the U.S. by market cap and the world's largest generator of wind and solar power. * Enel S.p.A. (Italy): A global utility with a significant presence in Europe and Latin America, aggressively expanding its renewable energy portfolio. * Iberdrola, S.A. (Spain): A global leader in wind power and a major player in grid modernization and smart-grid technologies.
⮕ Emerging/Niche Players * Ørsted: A global leader in offshore wind development, transitioning from a fossil-fuel-based utility. * Vistra Corp: A major U.S. independent power producer and retailer, investing heavily in battery storage and solar to transition its legacy fossil fuel fleet. * Sunrun: A leader in residential solar and battery storage, representing the growth of distributed energy resources (DERs).
The final price of electricity is a stack of multiple costs. The primary component is the Generation Cost, which includes fuel (natural gas, coal, uranium), operations, maintenance, and capital recovery for the power plant. This is followed by regulated Transmission & Distribution (T&D) charges to move power from the plant to the end-user. Finally, various Taxes, Environmental Levies (e.g., carbon tax), and, in deregulated markets, a Retail Supplier Margin are added.
The most volatile elements in the price build-up are tied to wholesale market dynamics: 1. Natural Gas: Often sets the marginal price of electricity. U.S. Henry Hub prices saw swings of >60% in 2022. [Source - EIA, Mar 2023] 2. Wholesale Power Price: Can spike dramatically during periods of high demand or low renewable output. Some markets (e.g., ERCOT in Texas) have seen prices jump from ~$30/MWh to the cap of $5,000/MWh for brief periods during weather events. 3s. Carbon Allowances: The price for EU Allowances (EUAs) in the European Union's ETS increased by over 25% during 2023, directly impacting generation costs.
| Supplier | Region(s) | Est. Market Share (by revenue) | Stock Exchange:Ticker | Notable Capability |
|---|---|---|---|---|
| State Grid Corp. of China | China | est. 15% (Global) | State-Owned | World's largest transmission & distribution network |
| NextEra Energy | North America | est. 2% | NYSE:NEE | Largest global generator of wind and solar energy |
| Enel S.p.A. | Europe, Americas | est. 2% | BIT:ENEL | Extensive global renewable portfolio and smart grid tech |
| Duke Energy | United States | est. 1% | NYSE:DUK | Major regulated utility in the U.S. Southeast & Midwest |
| Iberdrola, S.A. | Europe, Americas | est. 1% | BME:IBE | Global leadership in onshore and offshore wind |
| Électricité de France (EDF) | Europe | est. 2% | EPA:EDF | World's largest operator of nuclear power plants |
| Tokyo Electric Power (TEPCO) | Japan | est. 1% | TYO:9501 | Dominant utility in Japan's largest economic region |
North Carolina operates as a regulated electricity market, meaning customers cannot choose their electricity supplier. The market is dominated by Duke Energy. Demand is projected to grow faster than the national average, driven by a strong influx of population and energy-intensive industries, including a significant data center presence for major tech firms. The North Carolina Utilities Commission (NCUC) oversees Duke's rates and infrastructure plans. State law (HB 951) mandates a 70% reduction in CO2 emissions from 2005 levels by 2030, forcing an aggressive transition away from coal towards natural gas, solar, and potentially new nuclear. For procurement, this means all sourcing is via a tariff structure with Duke Energy, but opportunities exist to engage with them on green tariff programs or other renewable solutions.
| Risk Category | Grade | Justification |
|---|---|---|
| Supply Risk | Medium | Generation capacity is generally adequate, but grids are increasingly strained by extreme weather and the intermittency of renewables. |
| Price Volatility | High | Direct exposure to volatile natural gas markets, weather-driven demand spikes, and costs associated with the energy transition. |
| ESG Scrutiny | High | Electricity is a primary focus for corporate decarbonization (Scope 2 emissions). Stakeholders demand transparency and progress. |
| Geopolitical Risk | Medium | Fuel supply chains (natural gas, uranium) are subject to disruption. Cybersecurity threats to grid infrastructure are a growing concern. |
| Technology Obsolescence | Low | The core product (electricity) is fundamental. Risk is on the supplier side regarding generation asset choices, not for the buyer. |
For sites in deregulated U.S. markets (e.g., Texas, PJM), execute a layered hedging strategy for the next 24 months. Lock in 30-40% of projected load via fixed-price contracts to mitigate budget risk from gas price volatility, which has exceeded 50% in recent 12-month periods. Leave the remainder open to capture potential market dips, creating a balanced risk portfolio.
Initiate a formal Request for Information (RFI) for a 10-15 year Virtual Power Purchase Agreement (VPPA) to cover 20% of the total North American load. This provides a long-term financial hedge against wholesale market volatility, generates high-value RECs to meet ESG goals, and offers budget certainty in a turbulent market. Target projects in PJM and MISO for their favorable economics.