In 2006 we examined the sector’s thinking about the “big leap forward” that needs to be made if the sector is to address the immense challenges posed by security of supply and climate change. We found a sector that recognised the need for change but remained hesitant about when and how it could be achieved against a background of continuing regulatory uncertainty.
In 2007 we see a power utilities sector that appears much more ready to make the changes that arise from the threat of climate change. In Energy and efficiency: The changing power climate we report on a sea change in the sector’s thinking. We find huge increases in the extent to which renewable and nuclear power are at the top of company agendas. We find an industry that believes that technological advances can take us into a new era of energy efficiency. Although the sector believes that governments and end-users must set a lead on energy efficiency, we also find that companies are ready to invest in efficiency, not just in their own production and transmission but also to help their customers become more energy efficient.
Such investment will be welcome news to large users of energy in particular. For the first time in our annual survey, we also speak to top executives in energy-intensive companies. We include a review of developments in the metals, chemicals, and paper industries.
We find that companies in these sectors are making major changes in how they do business in order to manage energy effectively. High power prices and price volatility are having a significant effect and we look at how energy-intensive companies are adjusting to life in a new high price and energy-uncertain world as well as the trends that they see ahead.
The report includes a series of regional and country reviews that examine the specific issues affecting individual country and regional markets. We include, for the first time, a series of additional “snapshots” of each of the BRIC countries (Brazil, The Russian Federation, India and China), all of whom face immense energy challenges.
Finally, we look ahead at the implications of this increased focus on cleaner power and energy efficiency. We look at what will determine the pace and extent of change. An effective carbon price will need to exist across all regions, including countries not covered at present. We also note the gap between the current and near-term price of carbon and the future level that will be needed if price signals are to have an impact.
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