88% of Canadian utility companies believe that greenhouse gas regulations
are the largest major issue facing the sector in the next five yearsTORONTO, May 27 /CNW/ - With climate change regulation in Canada in a
state of flux, a new global survey from PricewaterhouseCoopers (PwC) shows
that 88% of Canadian utility companies believe that greenhouse gas (GHGs)
regulations is the greatest issue facing the industry in the next five years.- 75% of Canadian respondents believe that major sector issues include:
regulatory changes and development, the ageing workforce, lack of
transmission capacity and pressures to replace ageing assets.
- Half of Canadian respondents report that diminished access to capital
is having a significant or major impact on their planning over the
coming 12 months.
- Nearly two-thirds (63%) of Canadian respondents viewed credit
constraints as a significant issue for the sector, however utility
company executives expect these constraints to improve as current
financial conditions ease.
- Asked if the economic recession would slow down responses to climate
change, 79% of global respondents felt it would with two-thirds of
the 79% saying it would have a high or very high slowdown impact.Canadian utility companies report that the issue of managing GHGs is
already having a considerable impact on their operations, particularly on
capital construction plans and costs (63%). Most companies are reviewing their
generation mix and only a quarter say that GHGs are having little impact on
the fuel mix.
In Canada, regulatory concerns are regionally specific. In Ontario,
concerns about the size and scale of investment required in generation and
transmission dominate, with regulatory delays adding to cost concerns. In
Alberta, much of the focus is on delays in getting major transmission projects
moving, in particular a new transmission line between Calgary and Edmonton.
Utility companies in the survey emphasize the importance of greater
clarity of climate change policy but express concern that the economic
recession is undermining the chances of an effective response to climate
change.
These findings are part of the 'A World Beyond Recession, Utilities
Global Survey 2009', which goes to the heart of boardroom thinking of 65
leading power companies in 39 countries around the world. Key results of the
global survey include:- Infrastructure investment needs remain high - the development of new
generation capacity and the renewal of existing generation plants is
a priority area for most companies. 83% of survey respondents say
their companies are seeking to make medium to large investment in new
generation and 79% are seeking to do likewise in transmission.
- Worries about capital shortages are widespread - there is
considerable doubt on whether investment will come forward in a
timely manner to keep pace with future demand for power and climate
change targets. Two thirds (67%) of survey respondents report that a
shortage of capital is having a high or very high impact on their
activities. Two thirds cite problems in securing finance as a medium
or high barrier to project development.
- Economic incentives needed to boost renewables in the mix - nearly
60% of respondents feel that their renewable energy investment
programs are being affected by the lack of clarity from governments
on renewable energy targets and financial support. Following a period
of record high power prices, only 28% of respondents believe that
unsubsidized renewable power can compete commercially against fossil
fuel generation.
- Worries that climate change action could slip - utility companies in
our survey emphasize the importance of greater clarity of climate
change policy from governments but express concern that the economic
recession is undermining the chances of an effective response to
climate change. 79% felt the economic recession would slow down
responses to climate change with two thirds of these saying it would
have a high or very high slowdown impact.In the coming decade, technological innovation is seen as having the most
new impact on energy efficiency, solar power, combined heat and power,
distributed generation and combustible renewable generation. Carbon capture
and storage (CCS) will be essential for the sector's long-term contribution to
the mitigation of climate change and 83% of respondents from utility companies
in Europe, for example, report that their companies are evaluating CCS
projects.
"Technology is key to competitive advantage in the coming decade," says
Alistair Bryden, leader of the PwC Canada utilities practice. "Despite the
current downturn, companies seeking growth are setting their sights on a
future low carbon but high energy demand world. There is significant
investment by Canadian utility companies in wind power and very significant
new hydro investments planned in Quebec, Alberta and BC."
Indeed, such is the current and future importance of technology, that
power utility companies in the survey point to equipment and technology
companies as a more significant competitive threat than even direct
competition in the retail market by other utility company rivals.
As well as investment in CCS, the survey highlights some of the major
moves that companies are making:- moving upstream to secure gas supply and invest in liquefied natural
gas (LNG) supply chains;
- horizontal expansion to increase presence in the renewable energy or
nuclear power field;
- developing new technological capabilities to exploit new sources of
power generation;
- exploring a more flexible mix of distributed energy supply and smart
grid capabilities.'A World Beyond Recession, Utilities Global Survey 2009', is a major
survey of boardroom opinion inside utility companies conducted annually by
PricewaterhouseCoopers. It includes data from 69 senior executives, from 65
utility and utility investor companies across 39 countries. Research covers
Europe, the Americas, Asia-Pacific, Africa and the Middle East. The majority
of utility participants were senior vice presidents and presidents, CEOs and
other senior managers.
The report includes a series of regional reports covering the Americas,
Europe, Asia Pacific and the Middle East and Africa; individual country and
regional surveys covering the US, Canada, South America and Australia. It also
includes viewpoints from leading utility company CEOs.
For a copy of the full survey and for further information, please visit:
www.pwc.com/energy.
The PricewaterhouseCoopers Global Energy, Utilities and Mining Group is
the professional services leader in the international energy, utilities and
mining community, advising clients through a global network of fully dedicated
industry professionals.
About PricewaterhouseCoopers LLP
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance,
tax and advisory services to build public trust and enhance value for its
clients and their stakeholders. More than 155,000 people in 153 countries
across our network share their thinking, experience and solutions to develop
fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP
(www.pwc.com/ca) and its related entities have more than 5,200 partners and
staff in offices across the country.
"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership, or, as the context requires, the
PricewaterhouseCoopers global network or other member firms of the network,
each of which is a separate and independent legal entity.
For further information: Kiran Chauhan, (416) 947-8983,
kiran.chauhan@ca.pwc.com; Carolyn Forest, (416) 814-5730,
carolyn.forest@ca.pwc.com
