Electricity is a hallmark of modern society due to its unmatched usefulness in lighting and powering appliances and electric motors, to name just a few energy services. Electricity accounted for 21% of final energy use in the European Union in 2022.1 That share is expected to grow because cities, states, and countries are encouraging the electrification of transportation, heating, and other energy services as a principal means to meet their targets for reducing greenhouse gas emissions.
The generation and sale of electricity is a big business. Market capitalization or “market cap” is one way to measure the value of a company. Market cap is equal to the current price of one company share multiplied by the number of outstanding shares. If the price of one share of a company is worth $5 and 1,000,000 shares have been issued, then the market cap of the company is $5 million.
The world’s 220 largest electricity companies accounted for about 3% of the $96 trillion total market cap of all publicly traded companies in the world in 2021.2 Note that this includes companies whose primary business is the manufacture of batteries, the demand for which is surging due to the demand for electric vehicles and utility-scale battery storage of electricity. CATL (China) and LG Energy Solution (South Korea) are battery companies with a combined value of about $173 billion. The largest company is NextEra, an American energy company that generates and sells electricity in 49 states and Canada.
Like the oil and gas industry, many of the most valuable electric companies are state-owned enterprises (SOE): a business enterprise in the government or state has significant control. Some SEOs have a public component that enables them to be valued by their market cap. For example, TAQA is a government-controlled energy holding company of Abu Dhabi, United Arab Emirates that is valued at $96 billion. Other SEOs have no public component, such as the State Grid Corporation of China which is the largest electric utility in the world and serves over one billion customers! In 2023 State Grid ranked third on the Fortune Global 500 list, trailing only Walmart and Saudi Aramco in aggregate revenues.
The value of electricity companies is highly concentrated in a small number of firms. Just five companies hold 20% of the market cap, and the 88 largest firms hold 90% of the total value.
1 Eurostat, “Energy Statistics – an overview,” accessed February 17, 2024, Link
2 CompaniesMarketCap , “Largest oil and gas companies by market cap,” accessed November 23, 2023, Link
