As the world economy improves, the growth is fuelling an unprecedented demand for energy. The demand, in turn, will place pressure on traditional producers who are witnessing a decline in their ability to deliver cheap, safe and reliable energy. Oil & gas production is already moving to unpredictable geographies. Newer sources of energy are being added to the mix. Technological changes like Smart Grids have arrived. Power generation is being impacted by EHS regulations, the need for supply security, rising fuel costs and trading integration. Amidst this, consumer expectations are evolving. Energy generation is in a state of extreme change.
The last few years have seen widespread transformation in the energy economy. Internationalization of trade, deregulation, geopolitics, growing liquidity and a rise in energy demands have made markets more volatile. The consequence has been a proliferation of financial instruments and derivatives in the utility and energy markets. Most of the trading in the physical market is for security of energy supply and asset optimization amidst which the importance of Energy Trading and Risk Management (ETRM) has been growing.
The demand for clean energy continues to grow as the impact of climate change is felt across the globe. Alternate energy has emerged as a viable answer and will dominate the energy business of the future. Technological innovation will continue to increase the efficiency, reliability and safety of renewable sources of energy. As new energy technologies get commercialized, the emphasis on customer satisfaction, operational efficiency and quality will gain increased traction. The Utilities businesses that stay ahead of the renewable trend with green plants and technologies are those that will dominate the 21st Century.
The Utilities sector is experiencing relentless transformation. Power, gas and water are becoming scarcer but demand continues to rise. Regulatory and consumer pressure over environmental and sustainability concerns are creating fresh challenges. As a consequence there is a need to drive change in consumption through Demand Side Management, focus on efficiency measures and improve customer engagement and communication. In addition, the concerns over acquiring new customers and retaining existing ones, accurate billing, creating new products and innovative pricing models have intensified.
The global demand for energy is likely to increase by as much as 49 per cent by 2035 (from 2007 levels) according to a study of the US Energy Information Administration. Utilities are embracing intelligent Smart Grids and Smart Metering as a way of meeting the challenges of the future including the growing demand for reliable and sustainable power, ageing T&D infrastructure, theft and grid efficiency, consumer choice and regulatory requirements.
The business and infrastructure environment in the Transmission & Distribution (T&D) sector is growing in complexity. There is pressure to delivery increasing amounts of power, gas and water over assets that are ageing and gradually deteriorating. Simultaneously, safety, policy and regulatory concerns are bringing in fresh demands on operations and network management. Adding to the already challenging landscape is the unpredictability of low carbon technologies like solar and wind that need to be planned for and integrated.
High standards of employee health and safety as well as increased environmental accountability have become non-negotiable imperatives for Utilities. In process industries such as Utilities that depend on their workforce, Employee Health & Safety (EH&S) has a direct impact on productivity. Today's skills shortage, spiralling labour costs and growing regulations demand that EH&S be addressed as a top priority. EH&S measures are also becoming core to customer satisfaction, ability to adhere to legislation, regulatory and sustainability requirements. Smart industry leaders are integrating EH&S with company core values to enhance brand value from a stakeholder perspective.