Electric Utility Profits in the Forbes Global 2000 from 2006 through 2012

Which are the most and least consistently profitable electric utilities in the world? Hint: the biggest losers all lost on nukes. But the biggest winners may surprise you.

Following up on Southern Company CEO Thomas A. Fanning's brag that "We are a great, big company from an energy production standpoint," I looked in the Forbes Global 2000 to see which are the biggest electricities in the world. Indeed, Southern Company (SO) is the biggest in the U.S. and number 6 in the world for 2012. But what about the rest, and what about previous years? Here's a graph of profits for the top 40 electric utilities from 2006 through 2012. SO is the blue line muddling along in the middle:

Profits
Graph by John S. Quarterman from

What's that dark red line dropping way below the rest? Tokyo Electric Power (TEPCO), owner of the Fukushima nuclear plants. And the red line starting at the top and ending up near the bottom? E.ON, the company that owns most of Germany's nuclear plants, as Germany shifts away from nuclear energy, after Cheronobyl and now Fukushima. The blue line that ends up as low as E.ON? Korea Electric Power (KEP), also an owner of nuclear plants. All the big losers are nuke owners.

What about the winners? The light green line ending up second by profits is Electricité de France (EDF), also an owner of nuclear plants, but one which has not yet had a major accident.

But what's that purple line that starts near the top and ends up at the top?

The most profitable electric utility in the world, according to Forbes, is ENEL, Italy's largest power company. In 1987, after the Chernobyl disaster in Ukraine, the people of Italy voted in a referendum to stop using nuclear power. ENEL also moved to decentralize power generation, moving from a few large plants to many medium-sized power plants, including solar. ENEL already has installed 67 Megawatts of solar power (as of September 2011) and is starting to manufacture solar PV panels. Wind is the fastest-growing power source in Italy and ENEL has 538 MW of wind power installed. ENEL invests in research, and is already operating smart grids in Brazil.

And that dark green line moving up from the middle of the pack to third most profitable? Iberdrola, a Spanish company that claims to be the world leader in wind power. Iberdrola also claims to already be the second-largest wind operator in the U.S.

So, the first and third most profitable energy utilities in the world, according to Forbes, are two companies that are doing what Southern Company refuses to do: deploying solar and wind and a smart grid. Both of them are already operating in multiple countries; Iberdrola is busy cornering the wind market in the U.S.

What does this mean to SO's long-term profitability outlook, as it keeps throwing our good tax and Georgia Power customer money after bad in its Plant Vogtle nuke boondoggle, and while shifting from coal (good), shifting to natural gas instead of to renewable solar, wind, and a smart grid? Could it mean that SO is making itself less competitive in the long run, against companies of the future like ENEL and Iberdrola?

-jsq

PS: The Forbes 2000 lists I used: 2006, 2006 cont., 2007, 2007 cont.,, 2008, 2008 cont., 2009, 2009 cont., 2010, 2011 was not available, and 2012. I'm sure somebody has already done this kind of analysis with better data. I'd be very interested in seeing it.