2013 -- A look ahead

As we head into 2013, let's take a look at 2012 in the rear view mirror...

It’s been an exciting year in the energy sector driven by the promise of abundant natural gas and challenged by the potential end of production tax credits for renewables and a nuclear industry still recovering from the impacts of Fukushima. 

Power Gen 2012 in Orlando, FL in December, provided a bird’s eye view of key trends -- namely, flexibility and efficiency. I got to hear some top keynote speakers speak on these points. Here’s my take on the “themes from Power Gen” and their impact on the industry going forward --

Low load growth in the North American power sector has been blamed not only on the economic slowdown, but also, quite interestingly, on the more efficient devices we are using to connect us. For example, an iPad uses $1.36 of power per year -- a desktop computer, $26 bucks (see link). More efficiency in devices, means the power industry must find its own means of creating efficiency through improved software products to allow more load control and customer demand analysis. 

Efficiency extends to homes and businesses, too. The expanded use of the internet to control home and business power loads is shaving peaks for users and reducing the need for payments to generators for standby power. 

For the nuclear and coal industries, growth possibilities have moved out of the U.S. to China and India. The U.S. will only provide diversification at this point. The funding news for SMR nuclear technology is positive but will take some time to lead to actual plant builds and jobs. SMRs are also jumping on the flexibility bandwagon by emphasizing their load following capabilities. 

The U.S. will see growth in gas of course, and renewables. Solar, hydro and wind will continue to gain momentum, albeit slowly. And, flexibility will be the buzz word for those integrating gas turbines with renewables to keep that source of power viable. 

With the low economic growth in the U.S. and Europe, continued excitement about expanding into Latin America and Asia, should be at the top of the game plan list for all energy business players. I’ve recently been working with companies from Asia looking to expand into the U.S. -- an interesting twist I’lll write about in a later blog. 

I am excited and upbeat about the new year -- out of change and challenge comes innovation and growth. See you in 2013. 

The shale gas wave – the story keeps getting better

Recent developments continue to support the reality that shale gas is a game changer for the energy sector in North America, putting the region ahead of the rest of the world in production by at least a decade.

North America has several inherent advantages when it comes to shale gas production. Because oil and gas exploration has been around for over 100 years, there is plenty of geological data to help companies pinpoint where to drill.

Secondly, the fact that most land is privately-owned in North America motivates land owners -- who can financially benefit from gas drilling -- to address challenges dealing with local regulations and accelerate production.

Other countries with considerable gas reserves like China and Poland -- and without private land ownership in gas reserves areas or enough water to support exploration -- have found it challenging to get at potential resources.

A recent government study supports shipping some of U.S. natural gas overseas, thus making the market even more attractive for U.S. investors and landowners. Click here.

For the power generation business, this means:

• More headwinds for nuclear generation driving more single plant closures and delayed investment in power uprates and new build.
• Increased pressure on Wind and Solar development, especially with waning support on production tax credits.

And finally, for consumers and industrial users an increase in shale gas production points to something we all want to hear, lower energy costs.

For more details check out this article in the WSJ, click here: