2005
PA releases latest energy industry analysis: 'Viewpoint on Energy: shortages, surplus and the search for value'
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17 March 2005
New York, NY – PA Consulting Group has released its latest publication, 'Viewpoint on Energy: shortages, surplus and the search for value'. The PA experts who have contributed to Viewpoint have interpreted and analyzed some of the major opportunities and challenges facing the energy industry including the issues of industry structure, ownership, fuel markets and the role of government and regulation.
Energy costs and their economic and national security consequences are at the top of the list of concerns for businesses and governments around the world. Myriad variables have contributed to this situation, including rapid economic development in Asia, the continually changing economics of the fuel markets, a new and stronger focus on renewable energy, efforts towards electricity and gas market integration and structural reform; and regulatory and market reforms.
In this issue of Viewpoint members of PA’s Global Energy and Utilities Practice provide insight into these issues in the following articles:
Reaping the benefits of electricity industry reform: defining and limiting the use of price controls
We review the strengths and weaknesses of regulated and competitive energy markets in delivering low-cost, reliable service.
Deregulated wholesale electricity markets have come under attack for their perceived deficiencies, but PA proposes that the benefits associated with wholesale competition cannot be realized in an environment where retail market regulation and political intervention prevent economically rational decisions on power consumption. The benefits will be realized only in a market where the retail customer is allowed to decide when and how much to consume, based on the actual cost of providing that service.
Generation asset ownership: the more things change, the more they will stay the same
Is the current interest of private equity investors in financially troubled power generation assets reflecting a fundamental change in market structure and asset class ownership or an aberration driven by short-term factors? By considering the respective objectives, capabilities and limitations of the private equity investor and the traditional power generation owner, we illustrate the probable transitional role of speculative capital in the US power industry.
Comparing approaches to promoting renewable energy: prospects for wind energy in the UK and the US
Tim Dewhurst and Craig Hart consider the economic, physical and political factors driving the rate of deployment of renewable energy technologies, specifically wind-generation in the UK and US. They review the current economics of wind energy investment and the physical handicaps wind power must overcome to significantly expand its role in each country’s power mix. Dewhurst and Hart then examine the relative effectiveness of policy initiatives and financial incentives in the two countries in addressing these various barriers and economic hurdles.
Liquefied natural gas is more flexible than pipeline gas: but can this value be extracted?
Silvia Pariente-David and Tony Vermeire examine the growing role of liquefied natural gas (LNG) imports in the European gas supply mix. They consider national and EU drivers for the rate and direction of capital investments in LNG import terminals and the changing strategies of market participants in directing capital to specific supply options and target markets. They conclude that even as gas market realignment slowly transpires, many regulatory and institutional barriers to the successful implementation of these strategies remain across Europe.
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Notes to editors
About PA Consulting Group
PA Consulting Group is a leading management, systems and technology consulting firm. Operating worldwide in more than 35 countries, PA draws on the knowledge and experience of 3,000 people, whose skills extend from the initial generation of ideas, insights and solutions all the way through to detailed implementation.
From the development of innovative strategies and solutions right through to their successful delivery, all of our work and support is based on deep sector insight and expertise. We work across the private and public sectors, with particular strengths in financial services, energy, life sciences & healthcare, government & public services, manufacturing and telecommunications. We help our clients to design optimal strategies for growth, deliver effective IT that improves business performance, mobilize human resources, deliver complex programs and major business transformations, and develop breakthrough products and processes through our unique applied technology capability.
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PA’s independent, benefits-driven approach is founded on our strength in innovation, our responsiveness to our clients’ needs, and our unyielding focus on delivery:
Innovation. Innovation comes in a variety of forms - in how customers' needs are identified and satisfied, in business models, in motivating and aligning staff, in the use of technology, and many more. PA has an unsurpassed track record in innovation, from developing pharmaceutical anti-counterfeiting measures and wireless technologies, to helping launch an innovative online bank, to development work that is helping alleviate poverty and boost the economies of developing countries.
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