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Utilities, energy companies, and public and private investment firms are pursuing investments opportunistically in utility, power generation, and natural gas sectors. Indeed, private equity is playing a greater role in energy sector investment. Beyond opportunistic investment, companies are using acquisitions for strategic objectives, such as business focus, increased scale, and growing their renewable resource portfolios. Large capex needs provide investment opportunities, but utilities remain measured, keeping an eye on affordability and rate impacts.
Global energy markets continue to add significant amounts of renewables to their resource mix. However, fossil-fueled capacity remains a critical, dispatchable resource. And while the demise of coal-fired generation has been predicted, a recent run-up in natural gas prices has had the unintended consequence of increasing generation by those coal plants. Is this a temporary dislocation or a longer-lived phenomenon?
While much has been made of state, municipal, and utility commitments to net-zero targets, the specifics of how to achieve them have been deferred. With interim targets now looming less than a decade away, some utilities are engaging in planning exercises that consider technology readiness, cost, and suitability for their particular circumstances.
Many regions have a long and growing queue of power generation projects—many of which are wind and solar—seeking to connect to the bulk power system. Transmission operators and regulators are looking at potential approaches to manage this backlog, including grouping, increasing required levels of financial commitment, and process changes.
Reducing greenhouse gas emissions is top-of-mind for policy makers around the world. However, the clean energy transition doesn’t happen overnight. Flexibility, optionality, and affordability are key. Recent geopolitical events remind us of the need for energy security, even during the transition. Europe has been pursuing decarbonization and transition for well over a decade and may provide a glimpse into what other regions, including North America, can expect and, more importantly, what we can learn.
This is a graphical look at interesting facts and statistics in the energy industry.
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