Energy Industry looks ahead to 2010
Complexity and uncertainty in the business environment is a fact of life for the coming decade, but there is strong disagreement both within and outside the energy industry on the nature of the key issues that will be important to it within that time, according to a new study conducted by Deloitte Research (The Utility Executive’s Field Guide to the Future).
These key issues are liberalisation; globalisation; energy supplies; geopolitics; economic conditions; environmental concerns; information and communications technology; energy technology; terrorism and organised crime; and customer demand.
The study involved utility executives, corporate energy managers and engineers in 15 countries throughout Asia-Pacific, Europe and the Americas. On the global level the consensus is that the energy industry of 2010 will be shaped chiefly by the decisions of regulatory agencies, parliaments and executives as well as by the moods and motivations of customers and the infusions of new technology. Capital availability and economic conditions are seen as having only moderate influence while other factors such as fuel supplies, the weather and labour unions will have the lowest profile. However, the relative importance of these factors varies from one region to another.
The report suggests the need for a “strategic flexibility” business approach, which is defined as “competing effectively today while simultaneously developing the capabilities needed to compete across a variety of possible futures”.
Enterprises that are strategically flexible prepare for a range of potential threats and opportunities using techniques such as scenarios, real options and financial options, says the report. They base their plans on the full range of possible futures, and as events unfold they move rapidly to meet new challenges and opportunities.
In the coming decade executives will need to work with uncertainty rather than denying it or resisiting it, says the report. “This is a time of complex possibilities, and the best approach is to address that reality.”