Full Title: The Math Does Not Lie: Factoring the Future of the US Electric Power Industry
Author(s): Gregory Aliff
Publisher(s): Deloitte Center for Energy Solutions
Publication Date: January 1, 2012
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Description (excerpt):
What will the U.S. electric power industry look like in the future? This question has been asked numerous times with many different answers, and current industry trends make it an especially relevant question today. Discussions with senior electric power company executives suggest a lot has changed over the last four years that is challenging the conventional wisdom about where the industry may be heading. Recent Deloitte research supports these executives’ views, and highlights important emerging trends which suggest power and utility companies reassess their business strategies and explore new business models. This paper examines what has changed in the electric industry and provides industry stakeholders with a straightforward approach to examining the future through a simple framework using a mathematical equation. The “math” is dictated by two emerging trends, which, in combination could present a formidable challenge to the profitability of companies in the electric industry. The two future trends are steeply rising costs coupled with the potential for slow, stagnant, or even declining electricity consumption. Together, they may well alter the equation for the power sector during this decade.