U.S. utilities have enjoyed a decade of capital investment that is delivering greater reliability and efficiency for customers, strong returns for shareholders and lower environmental impacts for all. Looking ahead, the industry faces a generational investment opportunity in a transitioning energy world, but in our view, execution risk is rising. Why?
Natural gas has emerged as arguably the world’s most critical source of energy, but the industry seems to be battling for its own survival in the face of environmental activism and local attempts to ban its use. In our view, the gas industry needs to emphasize the role it plays not only in the transition to cleaner fuels, but in assuring the reliable delivery of all forms of energy, including electricity.
Over the past few weeks, business news headlines have been overwhelmed by echoes of the 2008 and 2020 financial crisis. Utilities are highly capital-intensive and rely on banks, particularly for short-term financing; should they be concerned about recent events?