The discovery of the shale gas changed the strategic landscape for the power industry. However it does not appear power companies are taking this new reality along with other structural changes in the industry to develop new short term strategies to stimulate revenues from existing capacities powered by natural gas. Neither does it appear that companies are developing long term strategies to emerge as leaders for the future. And if you ask why, companies will give a wide range of reasons, some may be regulatory, some environmental, and other may have to do with the market fundamentals.
Utilities and independent power producers appear to be taking the risk free option by just holding the status quo waiting for a leader to emerge and follow suit. With environmental regulations driving up to 95 GW of coal power plants in the next 20 years coupled with large supplies of shale gas present an investment opportunity in improving efficiency of existing natural gas powered plants and developing new clean and more efficient plants for the future. With limitations of wind, solar, and nuclear energy in the near future, most of this capacity will have to be replaced with natural gas power plants. Yet we see very little movement to capitalize on these realities.
What we are also lacking are the necessary investments in more efficient gas turbine technologies and more advanced combustion technologies for both Natural gas and coal. These two components will significantly contribute to improving energy efficiency and reducing harmful emissions from coal and virtually eliminating emissions from natural gas fueled power plants; such promising technologies do exist today.
So how is your organization maximizing today's results and preparing to lead in the future? Are you just waiting for a leader to emerge to follow suit? Or are you taking active steps to create an environment of innovation and generating executable and sustainable strategies for the future? How are you building your forward competitive advantage and differentiation? Have you revisited you strategy in the past year? Two? Or even in the past three years? And have and examined its effectiveness for the next boom given the structural changes in the industry?