Utility Concerns Over Security and Transmission

Utility Concerns Over Security and Transmission

Jul 17 - Power Economics

THE BIGGEST AREA of concern for power utilities over the next five years is security of supply and increasing transmission capacity, according to a new report.

In PricewaterhouseCoopers' sixth annual survey of around 150 utilities worldwide, utilities ranked security and transmission above increased regulation, price volatility and renewable energy policies. Previously it had been the fourth most important concern.

The report said the change was a "direct result of increasing difficulties in the balancing act of power generation, demand and transmission". It said major blackouts in the US, Sweden, Italy and the UK, and continued corporate failures had "sent shockwaves through the industry".

The report said the power cuts had acted as a wake-up call for the sector and investment in new transmission and generation capacity was required. However it revealed "a huge lack of faith" from utilities that governments would provide the support required for expansion.

The report revealed that some utilities were ill-prepared to deal with climate change and emissions reduction. Just 43 per cent of respondents had a fully or partly operational strategy to deal with the new risks inherent in an environment of emissions trading. Around 26 per cent had no strategy, even in planning. Meanwhile regulatory certainty was an important concern of utilities. Inconsistencies and political changes in regulation were a concern, but the most important issue in many areas was the lack of progress in deregulating power industries, and an inconsistent approach.

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