Black & Veatch has releases its sixth annual survey of the eletric power industry, 2012 Strategic Directions in the U.S. Electric Utility Industry Report, which was conducted from 22 February through 23 March 2012.
The respondents represent a broad cross section of the industry, but are primarily from investor owned utilities (IOUs).
According to the survey, there is an industry consensus on a few things
- there will be some certainty on carbon
- prices for electricity will continue to rise
- while coal has a future, renewables have a growing but limited one
- water is a critical environmental concern
There is also significant agreement on what represent “viable clean energy” technologies by 2020
- natural gas
- hydroelectric
- nuclear
The glut and continuing very low price of natural gas in the U.S. are undoubtedly contributing to a high rate of replacement of coal-fired capacity by natural gas. The need to backstop intermittent renewables is another driver. But there is serious concern that the EPA study of the impact of unconventional gas exploitation on aquifers will result in federal regulation and higher gas prices.
65 percent of the utility respondents reported electric power consumer rate increases during the past year. 92 percent said that the cost of regulations will cause prices to rise for consumers in the future.
Interestingly, more than 60 percent of the utility respondents expect to hit their renewable energy targets. The main concern is no longer whether renewable energy is technically feasible, but about the cost of implementing it.
Top industry concerns
Reliability, aging infrastructure and the environment are the top industry concerns. Two to three years ago, aging infrastructure was sixth, significantly behind aging workforce. This year this has been reversed. I suspect that the aging workforce is not less of an issue, but that other issues have become more critical driven by external factors including regulation and state renewable portfolio standards (RPS).
EPA environmental regulations such as the MATS standards and the proposed CO2 emissions standards on one hand, and renewable portfolio standards on the other are contributing to the retirement of older, especially coal-fired, plants and their replacement by combined cycle gas turbine and renewable energy sources such as wind and solar.
Top environmental concerns
The top environmental issues reflect areas where the EPA has completed rule making or is in the process of defining rules.
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