Location: New York
Author: Lisa Boughner
Date: Wednesday, April 9, 2008
Capgemini in cooperation with Platts yesterday released findings from their annual joint utilities executive study. The Platts/Capgemini Utilities Executive study is designed to identify current concerns, gauge opinions about the future of the energy industry, and assess how utility companies will meet ever-increasing energy demands.
After surveying nearly 100 executives within the electric and natural gas industries in the United States and Canada, this year’s study revealed that the five most critical issues facing the energy industry include:
* Addressing environmental concerns such as emissions, carbon dioxide and greenhouse gases;
* Addressing industry regulations;
* Coping with aging workforce and workforce management issues;
* Building new, while maintaining or replacing aging and overburdened infrastructure; and
* Increasing adaptation of new technologies that can enhance energy consumption management
“In its second year, the Platts/Capgemini Utilities Executive Study continues to provide valuable insights into the challenges and concerns the energy industry currently faces now and in the future,” said John Christens, vice president, Energy and Utilities practice, Capgemini. “Companies in the energy and utility sector are, more than ever, taking a proactive approach to addressing environmental concerns and implementing new demand response technologies that can help improve energy efficiency and help consumers and utility companies embrace conservation.”
Focusing on Environmental Concerns and Technology Solutions
According to the study, an overwhelming majority of executives polled - nearly 95 percent - said the industry’s focus on the environment had increased from 2006 to 2007. Furthermore, 77 percent of participants identified environmental issues such as global warming, climate change, and emissions/carbon requirements as the issues of which they are most concerned.
More than half of the executives surveyed (52 percent) said in the last year, the industry’s focus on technology has increased due to enhanced focus on sustainability, such as incorporating clean coal technology and monitoring electricity consumption via smart meters and automated metering infrastructure (AMI).
These findings were supported by one of Capgemini’s Smart Metering clients, Hydro One:
"The new challenge for utilities is to provide their customers with tools and transparent pricing so that they can effectively participate in conservation and manage their energy consumption,” said Rick Stevens, director, Development Strategy, Hydro One Networks, Inc. “Hydro One is addressing both issues by implementing a world class AMI solution with two-way radio frequency (RF) mesh technology that enables time-of-use billing and interface with in-home devices. These devices can provide customers with energy use information at home or remotely and will automatically manage their high consumption appliances like air conditioners and pool pumps.”
Regulatory Issues, Aging Workforce and New/Aging Infrastructure Remain Major Concerns
Other key issues that energy executives believe must be addressed include: regulatory uncertainty; the aging workforce – that is, the gap left behind by retiring baby boomers and the knowledge transfer and knowledge capture needed as a result – as well as, aging infrastructure and how to recover costs needed for new construction.
For retail competition, most executives said they do not feel that deregulation has been successful and believe that it will change. The findings were split almost equally three ways: 38 percent think there will be a movement away from deregulation in the next five to 10 years; 27 percent believe retail competition will continue to grow; and the remaining 35 percent say it will stay the same.
As for North America’s utility infrastructure, nearly a third of participating executives strongly agreed that new generation capacity is essential to meet future energy demands. However, few participating executives stated they believed there will be resolution on how to finance new generation capacity.
Future Concerns & Projections for the Energy Industry
In looking toward the next 10 years, energy executives provided a snapshot of industry issues that include increased environmental regulation and focus on conservation and energy efficiency. They also see increased inclusion of renewables in the fuel mix and continued volatility in natural gas prices as future concerns.
For more information regarding the Platts/Capgemini Utilities Executive Study and to download the complete results, please visit www.us.capgemini.com/PlattsStudy .
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