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Winds of change blow utilities towards nuclear

Thursday, 21 June 2007

A huge shift in thinking in the worldwide utility sector is bringing nuclear energy, energy efficiency and cleaner fuels to the top of the corporate agenda, according to a report by international professional services company PricewaterhouseCoopers.

The report, Energy and Efficiency: Utilities Global Survey 2007, surveyed 114 energy utilities in 44 countries, and found that 45% thought nuclear would account for an increasing share of consumption over the next five years, up from 19% in 2006. The figure for wind energy was 48%, up from 17% in 2006. Although similar numbers expect coal, natural gas and renewables (other than wind) to play an increasing role, the changes of thinking towards those energy sources are less marked.

The driving factor appears to be climate change, but the report cautions that, without effective and consistent worldwide regulatory frameworks, actual progress may be limited. Economic signals and incentives would be critical for utilities to make any big shift, PricewaterhouseCoopers global utilities leader Manfred Wiegand cautioned. "An effective signalling of carbon prices will need to exist across all regions," he noted, especially for countries with high carbon emissions and high growth. Similar sentiments about the need for effective carbon pricing if the market is to guide any reduction in emissions were expressed recently by BP group chief executive Tony Hogan, when BP's annual energy review was released.

The survey found that, while utilities have great faith in the ability of advances in technology to increase energy efficiency, they also believe that the greatest potential for efficiency gains comes from end users. Many of the utilities surveyed are already investing in projects to improve demand-side efficiency.

The report also revealed increasing concerns among utilities about security of supply, with utilities all over the world expecting to face supply and demand conditions that are significantly or 'immensely' challenging. Skills and knowledge shortages are also highlighted as a 'crunch factor' for utilities, as investment in infrastructure, new generation and technology are set against an ageing workforce and, in some regions, a shortage of graduates in relevant engineering subjects.

Further information

PricewaterhouseCoopers

WNN: BP: Nuclear grew by 1.4% in 2006