BLACK & VEATCH
Executive Summary
The Black & Veatch 2014 Strategic Directions: U.S. Electric Industry report tracks how electric utilities are managing the accelerated pace of change and transformation of many traditional elements of their business. Black & Veatch predicts that this disruption, propelled by a confluence of market dynamics and shifting technologies, will result in a leaner, more nimble electric utility industry that will be able to better deliver on its primary mandate: reliability.
Survey respondents are feeling pressure in several areas. Many are closely watching to see if state and federal regulators will fully place air and water challenges in the midst of the broader climate change discussion, while carefully balancing the cost of requiring new environmental technology on a recovering U.S. economy. Outside the regulatory sphere, the industry presses on with a host of challenges and opportunities: consolidation to grow scale; the need to reduce operating costs and improve efficiencies; exploration of adjacent/new markets to further growth; determining how to leverage low-cost natural gas; and improving overall disaster response to protect the nation’s vital power infrastructure.
This theme of asset protection found a new level of focus as cybersecurity surged in the ranking of the Top 10 industry issues (Figure 1), leapfrogging two spots to number four – just below reliability, environmental regulation and economic regulation. The industry is paying attention and actively seeking ways to bolster security practices to limit power system vulnerability. To highlight its rapid advance, in 2012, cybersecurity was not ranked as a top 10 issue by industry leaders. At the time, Black & Veatch suggested the industry be aware of the need to plan and revisit the issue. Today, we are seeing an industry that is actively moving forward with the deployment of comprehensive asset protection plans following several high profile cyber and physical threat events.
For 2014, this report is divided into three sections that reflect the agents of change thematically. The Market Forces section focuses on the impact of current economic trends. The Technological Drivers section examines how innovation in operational and consumer technologies is disrupting traditional electric utility industry operations and services. In Regulatory Shifts, Black & Veatch captures and analyzes the effect of new issues and policies.
It is also important to look at where utilities are making the investments necessary to take advantage of growing segments, such as liquefied natural gas (LNG) and renewables. The 2014 Strategic Directions: U.S. Electric Industry report also features dispatches from the Gulf Cooperation Council (GCC), Indonesia and India. For each region, local subject matter experts share data and anecdotes from economies in transition that grapple with change daily.
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About Black & Veatch
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“Black & Veatch started 1915 as a two-person partnership between former University of Kansas classmates Ernest Bateman Black and Nathan Thomas Veatch. The company began with 12 employees with offices in Kansas City, Missouri. It landed two large contracts, one in power and one in water, in its first year…Today, the company continues to experience strong growth across its core markets. Black & Veatch currently has a global workforce of more than 9,000 working in over 100 offices worldwide with projects completed in more than 100 countries on six continents.”
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