The investment challenge on electricity and gas companies is immense. Meeting projected demand will entail cumulative gas and electricity investment of some US$12.7 trillion in the period to 2030. This massive amount of capital will require utility companies to make a compelling case for investment. Yet companies find themselves caught in a trap. They are striving to make their sector attractive to investors while grappling with regulatory uncertainty and market volatility that creates an investment hurdle.
Utility companies across the globe are facing an array of forces. Regulatory, investment, supply, environmental and price pressures are all combining to place sometimes contradictory demands on utility companies. World energy demands are soaring but constraints on generation and supply are also rising.
We go to the heart of the investment issues facing the industry. We get inside the boardroom thinking not just of utility companies but also that of banks, equity analysts, investment companies and other key investors in the industry. We examine opinions on the key issues facing them as they weigh up the case for investment in the sector.
We look at the challenges facing the sector. We find that, despite the unambiguous demand and growth prospects ahead of the industry, utilities are unable to rise ahead of the pack when it comes to attracting investor attention. Inconsistent regulation and continuing regulatory uncertainty are damaging investor confidence. We find worries about supply security intensifying since last year’s survey and we see an increasing credibility gap emerging as the industry attempts to change the fuel mix in response to climate change concerns.
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