Utilities Unbundled issue 13
The energy sector has an opportunity to reshape the generation mix completely over the next 30 years.
The biggest uncertainty is natural gas. How much is there, where is it, who wants it and how much do they have to pay?
Indeed, this has to happen to meet policy pressures to reduce carbon emissions and integrate renewable energy.
The biggest uncertainty in the mix is natural gas. How much is there, where is it, who wants it and how much will they have to pay? Our lead article looks at the current operating environment for gas, including the potential impact of new US LNG exports on European power generators and utilities.
And as carbon prices in the European Union’s Emissions Trading Scheme bottom out, we consider its future.
Howard Rogers of the Oxford Institute for Energy Studies asks whether a flood of new LNG could be the final straw that breaks the long-standing relationship between gas and oil prices.
LNG is expected to form a larger share of the generation mix in Chile, a country struggling to meet demand for power, while a tough domestic power market sends Chinese power companies in search of acquisitions overseas.
Coal features strongly in South Africa’s massive capital program, the largest seen by the power and utilities sector in decades, while in Japan we examine progress in decommissioning the Fukushima Daiichi nuclear plant.
Our accountants examine the impact of new disclosure rules on energy companies’ most subjective fair value measurements, the most prevalent being long-dated derivative instruments.
Lastly, AboitizPower CEO Erramon Aboitiz, Ernst & Young Enterpreneur of the Year (Philippines) 2011, discusses his belief that utilities should make a real difference to their sector.
If you have any questions or comments, our authors would be pleased to hear from you.
Ben van Gils
Global Power & Utilities Leader
Ernst & Young Global Power & Utilities Center
+ 49 211 9352 21557