Around 50 senior executives and experts from ten different countries gathered in March 2011 in Dusseldorf, Germany for PwC’s roundtable on the capital project and infrastructure challenges facing utility companies. Participants were drawn from a range of different sectors – utilities companies themselves, financiers and bankers, the legal profession, engineering and technology companies, as well as from PwC.
The scale and complexities of the challenge facing the power utilities sector are immense. The International Energy Agency estimates that the cumulative global investment required in the power sector from 2010 to 2035 is US$16.6trillion (in year-2009 dollars)
The suddenness of the recent economic crisis and the subsequent uncertain recovery shows how stop/start uncertainties can affect project pipelines. As well as economic and market volatility, companies also have to weigh up the direction of travel of the regulatory environment, particularly with respect to the fuel mix. As events following the Japan earthquake showed, this context can change abruptly.
Introducing the roundtable event, PwC’s global utilities leader Manfred Wiegand highlighted the changing context of utility sector capital projects. “It’s very different from earlier periods of capital project expansion in the sector,” observed Wiegand. “Companies themselves have changed dramatically. Their market context is very different. Their geographical spread is much greater. Globally, more capital projects are located away from OECD countries. And there is the rate of technological change. When you come to plan a project, for example, you have to allow for the way in which technology and software will have moved on by the time the project is completed.”