In this section, we explain how new distributed energy technology, customer preferences, and new participants are impacting utilities and the traditional regulatory compact and how utilities and regulation are adjusting to these changes.
In this section, we provide an overview of emerging themes and trends defining the industry, including consolidation in the energy and utilities sector.
The energy industry is changing, and its regulatory and financial moorings are shifting. Continuing cost declines in distributed resources take place alongside new gas and nuclear plant build. The supply stack is becoming greener, but the Clean Power Plan has been stayed. In our Update, themed “Neither Fish nor Fowl,” we look at the unusual picture drawn by the juxtaposition of these changes.
Chesapeake Energy, the second largest U.S. natural gas producer, and Peabody Energy, the largest U.S. coal producer, were simultaneously standing on the edge of a financial cliff at the end of Q1 2016. The latter has since fallen and filed for Chapter 11 bankruptcy, while Chesapeake remains, clinging to a lifeline.
ScottMadden’s Nuclear practice is launching a Nuclear Plant Recovery series. This six-part series will include articles, case studies, and white papers focused on leading practices in nuclear plant recovery. See below for a sneak peek of what’s to come.
More than 25,000 MWs of coal capacity are planned to retire within the next five years in the United States.[1] Generation companies that operate coal-fired power plants must carefully make and execute the decommissioning decision to ensure more than just financial prudence. The human element of retiring an older coal plant requires careful consideration and execution to ensure that:
Distributed energy resources (DERs) can provide net benefits to the electric system (e.g., congestion relief) and broader society (e.g., emission reductions). However, despite these advantages, the deployment of high penetrations of DER has proved challenging. Against this backdrop, the electric utility is often singled out as a fundamental barrier to deployment of DER assets. To overcome the perceived electric utility shortcomings, many stakeholders conclude that a completely new model is needed for the electric industry.
In March 2016, the National Renewable Energy Laboratory (NREL) released a new report finding the technical potential of rooftop solar PV in the United States is 1,118 GW of installed capacity and 1,432 TWh of annual energy generation.
On February 24, Cheniere Energy’s Sabine Pass plant officially began exporting liquefied natural gas (LNG) when a tanker carrying 3.7 bcf of domestically produced LNG departed for Brazil. A second tanker docked on March 11, and at least eight more will follow in the next two months, each destined for the global LNG spot market. Sabine Pass is one of several LNG plants being built in hopes of capitalizing on the opportunity to ship cheap U.S. natural gas to regions of the world with significantly higher prices. Unfortunately, timing of completion appears to have missed the market with global LNG prices plummeting in recent months.
As the utility sector seeks to create a cleaner energy future, natural gas has become an increasingly integral piece of the generation mix for many utilities. Given its inexpensive cost, we have previously seen more and more investments in natural gas; however, an October 2015 report released by the Union of Concerned Scientists (UCS) points out that states may be becoming over-reliant on natural gas. For each state, the report examines gas’ share of overall capacity (2014), projected gas capacity (2017), percentage increases in natural gas generation (2008-2014), percentage increases in emissions (2013), and natural gas capacity as a percentage of power plants being built (2014-2017).
On four occasions in January 2016, Kaua‘i Island Utility Cooperative (KIUC) used a variety of renewable resources to generate 90% of the Hawaiian island’s electricity.
For most companies, the procure-to-pay (P2P) process has evolved to where upstream processes—the world of sourcing and purchasing—and downstream processes—the world of accounts payable—are managed by different organizations and are likely disconnected at key integration points. These disconnects drive rework, inefficiency, frustration, and overall higher costs to serve.
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