Advantage Ecological Footprint Report
Since the start of the great financial crisis, power utilities are experiencing a period of intense changes and the sector’s ecological footprint is a major driver of this. There will be winners and losers, and investors are taking notice of the huge volatility of the sector stock market index, which was comparable only to that experienced by banking. This third edition of the Advantage Ecological Footprint report is devoted to the power utilities sector.
The disrupting factors of the business model are on the one hand the growth in renewables such as solar and wind, the substitution of nuclear for coal since Fukushima and the volatility of oil and gas prices. These changes affect the generation phase of the electricity value chain, but changes are on the horizon for the distribution business, with continuing geopolitical risk in the gas transmission business and the potential growth of consumer empowerment with the gradual diffusion of the smart grid for electricity.
These developments play in a different way according to the product and energy mix of each market player and with the different regulatory outlook that is observed in each individual country. The Euro Zone crisis has added to the strain in the sector, with a stagnating demand outlook and with the removal of energy subsidies for the renewable resources within the most impacted sovereigns.