Business Pulse: power and utilities
Top 10 risks and opportunities radars
The risk and opportunity radars present a snapshot of the top 10 most highly ranked risks and opportunities facing power and utility businesses around the world.
We have grouped these into four areas that correspond to our Growing Beyond model:
- Customer reach: maximizing the potential market opportunity for products and services
- Operational agility: improving organizations’ ability to deliver effectively in a quickly changing market
- Cost competitiveness: sustaining companies’ economic viability
- Stakeholder confidence: allowing firms to build stronger relationships with their stakeholders
This provides a useful means of comparing risks and opportunities across other sectors analyzed by EY.
Top 10 risks
- Compliance and regulation: responding to an incessant stream of regulatory demands consumes resources and limits the effectiveness of long-term planning
- Commodity price volatility and access to competitively priced long-term fuel supplies
- Political intervention in P&U markets, which survey respondents anticipate being the top risk by 2015
New risks this year include capital project execution, which enters the top 10 in sixth place, and aging generation fleet and network infrastructure, which comes in at ninth.
Top 10 opportunities
- Rising energy demand in emerging markets
- Aquisitions or alliances to gain new capabilities
- Growth in energy and ancillary services markets
Increased investment in generation capacity and delivery infrastructure in emerging markets is a new opportunity this year, placing eighth in our survey, and is seen as a good strategy to partially offset falling revenues from reduced demand in domestic markets.
Improving wind generation supply chain efficiency is also a new opportunity this year, reflecting the growing demand for wind generation and the need to minimize deployment costs.