Capgemini report highlights turning point for utilities

Posted on 18 Nov 2009 by The Manufacturer

A report released today by Capgemini’s European Energy Markets Observatory (EEMO) finds that electricity consumption has fallen for the first time since World War Two.

The report uncovers that in order for the EU’s energy to come from renewable sources, 33% of its electricity will have to be generated by wind, solar, and hydroelectric — this is currently at 16%. Similarly, only 8% of power generation capacity is now under construction for renewable sources and 24% for coal-fired, i.e. the most polluting form.

Says Alistair Green, lead consultant, global energy utilities and chemicals for Capgemini: “The EEMO report shows that the recession has upped the challenge for energy firms in accessing the funds they need to invest in new generation capacity and grid infrastructure.

“It is encouraging to see real confidence amongst the energy firms we spoke to that the Government and Ofgem are acknowledging the challenges in building this sustainable future and its impact for end-user prices. This is essential for investors to have the necessary confidence to support the required investment.”

Capgemini and Utility Week also released today results from a survey of the UK’s leading energy executives, 75 in total, which find that over half (55%) of the respondents believe that the UK will become the leader in clean energy. The UK got the vote of those polled, ahead of the US (29%) and China (23%), and had far more support than current green energy leaders such as Germany (16%) and Scandinavia (11%).

Key findings from the UK survey include:

• A 50/50 split vote over whether the recession and resulting fall in consumption will affect the business case for clean energy generation in the UK. This reflects uncertainty in the face of the upcoming election and changing government policy

• 89% of UK energy leaders think that smart meters will be a key technology to meet Brits’ energy needs, with 32% saying that the UK would be the first European country to complete the large-scale rollout of smart meters. UK Energy leaders see Germany (31%), France (13%) and Scandinavia (13%) as the only other significant contenders

• Over three quarters (77%) thought that the use of smart “white goods” such as refrigerators could effectively help to manage UK demand

• Nearly three quarters (72%) of UK energy executives see cost as the biggest barrier to implement a smart grid, followed by policy framework (35%). These findings further back up Ofgem’s report which uncovered that energy companies would have to pass on costs to consumers with UK energy bills to rise by nearly 60% by 2016

click here to download the report.