Tuesday, May 26, 2009

Financial Challenges for U.S. Electric Utility Sector

The U.S. electric utility sector, the second most intensive capital sector in the country, has tremendous financial and environmental challenges ahead of it.

A recently published report, "The Financial Crisis and Its Impact on the Electric Utility Industry," puts it this way: 
"Today, the electric utility industry faces the greatest challenge in its history.  In order to meet the projected growth in electricity demand, major investments are needed to expand and modernize most elements of the electric utility business.  At the same time, concerns about global climate change and other environmental issues have created a new industry emphasis on more energy-efficient products and services and low-emission generation sources."
Some have estimated that the sector will need infrastructure investment in the range of $1.5 to $2 trillion in the next two decades (and that is "net of projected savings from aggressive energy efficiency and demand response programs.")

The report, commissioned by the Edison Electric Institute, provides an excellent overview of how the financial crisis is playing out in the context of U.S. electric utilities.

No comments:

Post a Comment