Which are the Fastest Growing Utility Brands?

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Utilities Growth Post-Pandemic | Future Business

A new report suggests that growth in utilities is powering up, as the impacts of Covid appear to be receding. We unpick the numbers.

Every year, brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test, and publishes nearly 100 reports, ranking brands across all sectors and countries. This week, the world’s top 100 most valuable and strongest utilities brands have been defined in the Brand Finance Utilities 50 ranking.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

The data makes for some fascinating business insights given the turmoil, both human and corporate, that’s taken place in the last two years.

Utility Winners

The data shows that led by China’s State Grid (brand value up nine per cent to US$60.2 billion), after a tough 2021 correlated with the pandemic, the utilities sector is powering ahead with the world’s 50 most valuable utilities brands achieving a combined nine per cent growth this year.

State Grid is named the world’s most valuable utilities brand for the fifth time in a row. As the overwhelmingly dominant utilities company in China, State Grid is a powerful brand which is beginning to consider environmental concerns with a commitment to green energy and Net Zero carbon emissions for the Winter Olympics 2022.

Richard Haigh, Managing Director of Brand Finance, commented: “[The]utilities sector is at the fulcrum of key issues for our society: the recovery from Covid, the conflict in Ukraine, and broader concerns about environmental sustainability in the future.

“State Grid is obviously a huge brand in a huge market, and will face a challenging future unless they can leverage this brand to deliver for their customers.”

Renewables

It appears that renewable energy is beginning to power the entry of new brands into the global top fifty ranking. With increasing global demand for environmentally sustainable electricity, industry trends in the utilities sector point towards an increased awareness about green and renewable sources of energy.

China’s Huaneng Power International enters the Utilities 50 ranking this year with a brand value of US$2.6 billion. While over 90 per cent of the company’s electricity generation comes from burning gas and coal, the brand has achieved fast growth (from a relatively small base) in its production of electricity from renewable sources.

Similarly, Indonesian utilities brand PLN (brand value doubled this year to US$1.5 billion) aims to digitise their business supply chain to increase efficiency and reduce carbon emissions with its long-term strategy. The brand has established its target to reach 23 per cent renewable energy usage by 2025 but faces substantial technical challenges to do so.

And the UK energy provider British Gas (brand value up 154 per cent year-on-year, valued at US$1.3 billion) entered the Utilities 50 ranking as the world’s 50th most valuable utilities brand. This growth in brand value was correlated with British Gas increasing the number of residential energy customer numbers for the first time since 2010, largely due to the addition of over 500,000 new customers from collapsing competitors.

Elsewhere, in Japan, energy companies face tough local regulations on the procurement of liquified petroleum gas, ownership and access of energy, distribution of electricity and foreign investment in the sector.

The high level of regulations has substantially restricted profit opportunities for several Japanese energy brands, including Kyushu Electric Power, Tohoku Electric Power, ppl, and Fortis, which have fallen out of the Top 50 global rankings.

These regulations are compounded by high global prices for fossil fuels, and Japan has pledged to be carbon neutral by 2050 and is focusing on low carbon emissions and electrification.

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