European power industry fears of fuel poverty increasing significantly in the next 20 years exceed that of North America, Asia and Africa according to a new survey by PwC.
As the global power industry confronts the challenge of energy affordability, efficiency, and security policies and investments not meeting demands, PwC’s 12th Global Power & Utilities report - ‘The shape of power to come’, surveyed the views of 72 power and utilities companies’ in 43 countries, including Ireland.
The report is released as the UN Secretary-General's High Level Group on Sustainable Energy For All meets in London, hosted at PwC (24 April), to mobilise urgent global action on accessible, cleaner and more efficient energy sources and supply.
Fuel poverty has moved up the agenda globally, with over half admitting it’s a fundamental industry concern, 58% in Europe. In addition, even with new generation capacity plans, power industry executives say fears of black outs are increasing in Europe and North America.
The capital funding requirement in all markets - both mature and growth territories - is considerable, including major upgrades or replacement generation. 76% said fast-track policies for planning and permitting strategic infrastructure were needed to meet demand. Even with this, two thirds of respondents saw the ability to recover costs fully from customers as a barrier to meeting demand growth.
John McGarry, Director, PwC Energy Practice, said:
“Concerns about affordability and the pace of infrastructure investment in western power markets are translating into unease about security of energy supply.
“The outcome of current moves - and policy deadlock - on energy security, affordability and efficiency are far from certain, and there is a considerable degree of concern about whether there will be enough done to resolve these issues in the next 20 years.
“Power systems will be on a knife edge in terms of whether they will cope with the huge scale of demand growth ahead until effective policy frameworks and investment issues are resolved.”
Analysing the big issues facing the industry now, and what the world of electricity would look like in 2030, PwC’s report underlines the immense changes and challenges lying ahead for the industry.
Gas prices are expected to continue to have the biggest impact on consumer prices in the medium term. Questions remain around whether shale gas can have the same impact on the UK gas market as it has had in the US, and many questions also remain about its accessibility and environmental safety.
John McGarry concluded:
“Smart grids and smart metering are high on the list of investment priorities and yet a mix of customer apathy and concerns about data usage are already seen as constraints which could limit the potential for these new technologies. It will come down to trust and transparency. So it’s not surprising that the industry is waking up to threats of heavy weight new entrants from outside the sector.”
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