Overland Park, Kan. June 13, 2011 — Black & Veatch released the results of its fifth annual Strategic Directions in the Electric Utility Industry survey in which more than 700 U.S. utility leaders took part.
Among the top findings in this year’s results, participants believe that energy and commodity prices will rise significantly in the next five years, and water has become the top environmental and business issue.
“More than 70 percent of survey participants agreed or strongly agreed that energy and commodity prices would rise significantly in the next five years, signifying tremendous capital investment needs across the nation’s electric utility system,” said Rodger Smith, President of Black & Veatch’s management consulting business.
* Lack of national energy policy impedes investment in new technology. When asked in the survey what factors most motivate the industry to invest in new technology, the two highest rated responses where “Regulatory Requirements” and “Government Incentives,” respectively.
* Smart grid programs are hamstrung by “lack of customer interest and knowledge.” Survey participants rate customer engagement as the greatest impediment to implementing smart grid programs in their areas.
* Coal will remain an important part of the U.S. energy mix. More than 77 percent of respondents — virtually the same percentage as last year’s survey results — believe when fiscal realities are considered, coal remains key in the U.S. energy portfolio.
* Nuclear fuel disposal and storage is one of the top environmental concerns among survey participants after the earthquake and tsunami crippled the Fukushima Daiichi nuclear power plant. This survey was conducted immediately following the tragic events in Japan, likely influencing responses to this question. Nuclear was not in the top 3 of this environmental category in the 2009/2010 survey results.
* Natural gas leapfrogs nuclear and wind as the top “environmentally friendly” technology among all survey participants. However, utility respondents still prefer nuclear. This is first time natural gas has taken the top spot in this category, indicating gas as an economical and environmentally attractive bridge toward a lower carbon future — particularly since survey participants believe shale gas will be available at a reasonable price for the next 20 years.
* About 20 percent of survey respondents are planning energy storage projects, indicating this technology is moving into more mainstream segments. This also correlates with other survey responses where participants believe energy storage will have an important role within their systems beyond the next five years.
* Survey participants are optimistic that electric vehicles will account for about 8 percent of their annual energy load by 2025. Participants estimate electric vehicles will account for 1 percent of their annual energy load by as early as next year. Nationwide, 1 percent of annual energy load equates to about 5,300 MW of baseload (nuclear, coal, biomass, geothermal or hydro) capacity — the energy equivalent to power more than 5 million homes.
* The U.S. is at risk of losing its global competitive position in utility technology. Specifically, respondents believe U.S. solar, nuclear and wind industries are at some risk of losing their competitive positions. More than 80 percent of respondents believe China is the greatest threat to the country’s overall energy competitiveness.