Press statement: Platts/Capgemini study reveals critical industry issues that keep North American energy executives up at night
New York, NY, April 8, 2008 -- Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services, in cooperation with Platts, a leading global supplier of energy and metals information, today 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.
This year's survey of nearly 100 executives within the electric and natural gas industries in the United States and Canada revealed that the five most critical issues facing the energy industry include the following:
- Addressing environmental concerns such as emissions, carbon dioxide and greenhouse gase;
- Addressing industry regulations
- Coping with aging workforce and workforce management issues
- Maintaining or replacing aging and overburdened infrastructure
- 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 that most concern them.
More than half of the executives surveyed (52 percent) said the industry's focus on technology has increased during the last year as greater emphasis of energy supply sustainability has bolstered the need for and use of clean coal technology and electricity consumption monitoring 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 mesh technology that enables time-of-use billing and radio frequency 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 energy executives believe must be addressed include regulatory uncertainty, the aging workforce (the gap left behind by retiring baby boomers and the knowledge transfer and knowledge capture needed as a result), aging infrastructure, and how to recover costs needed for new construction.
Regarding retail competition, most executives said deregulation has been unsuccessful and expect additional regulatory changes ahead. The survey showed a three-way split in participants' views on regulation: 38 percent anticipate a movement away from deregulation in the next five to 10 years; 27 percent predict deregulation will continue to enhance retail competition; and 35 percent foresee little change in the retail environment as a result of past deregulation.
Asked about North America's utility infrastructure, nearly one third of the survey participants strongly agreed that new generation capacity will be essential to meeting future energy demands. But most executives caution the financing of new generation capacity remains a major hurdle for the industry.
Future concerns and projections for the energy industry
Energy executives' decade-ahead outlook continues to include increased environmental regulation and ongoing focus on conservation and energy efficiency. They say the need for increased inclusion of renewables in the fuel mix and the continued volatility in natural gas prices will remain constant challenges.
For more information regarding the Platts/Capgemini Utilities Executive Study and to download the complete survey results, please visit www.us.capgemini.com/PlattsStudy.
Capgemini, one of the world's foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working -- the Collaborative Business Experience -- and through a global delivery model called Rightshore®, which aims to offer the right resources in the right location at competitive cost. Present in 36 countries, Capgemini reported 2007 global revenues of EUR 8.7 billion (approximately US$12 billion) and employs over 83,000 people worldwide.