Five Most Critical Issues Facing the Energy Industry
04/28/2008

A new study of nearly 100 high-level executives from the electric and natural gas industries identified the top five most critical issues facing the energy industry today. The study, by Platts and Capgemini, found the top industry issues are:

• The environment—including such issues as global warming/ climate change and emissions/carbon requirements.

• More regulation—including environmental regulations on new and existing plants as well as costs associated with incorporating renewable resources into the fuel mix.

• Workforce management—including replacement of an aging workforce and increased competition for talent.

• Industry infrastructure—including recovering costs for constructing new generation and new transmission facilities.

• Technology—including smart meters, automated metering and clean-coal technology, which was found to be critical to meeting future challenges.

Driven by moderate increases in natural gas prices and load growth, on-peak wholesale electric prices increased between 6 and 11 percent in 2007, according to the Federal Energy Regulatory Commission’s “2007 State of the Markets Report.” On-peak wholesale spot prices rose 12 to 13 percent in the Northwest, while prices in Texas rose just 1 percent because of a cool and rainy summer.

The report found that during 2007 “relatively little” new generating capacity was completed by the electric utility industry. Natural gas units accounted for 7,500 mw of new capacity—45 percent of the total. Wind units accounted for about 30 percent of new capacity and coal-fired plants about 13 percent. New nuclear capacity accounted for about 7 percent of the total, resulting from the re-commissioning of one unit at TVA’s Browns Ferry nuclear plant.

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