August 05, 2009

Big Oil's reluctance to invest more of its vast resources into the green space is a function of its vision. It is seeking to meet global oil demand while at the same time protecting its shareholders by focusing on the development of fossil fuels.

Any evolution in that thinking will only occur if there is a fundamental change in global carbon policies and particularly those of the United States. Even though the Obama administration is aggressively pushing for greater fuel diversity, the oil industry is sticking closely to its core competencies and in some cases, reducing its investment in wind and solar power.

August 03, 2009

The one time when you can really appreciate a well-oiled bureaucratic machine is when it's pumping out money.

The administration's $787 billion economic stimulus package provides some $65 billion in grants and tax credits for an array of energy projects. These funds turn the Department of Energy, other federal agencies and state governments into an ATM machine for the industry -- if they know which buttons to push.

So the industry is swinging into action, forming a number of working groups through the Edison Electric Institute, which represents investor-owned utilities, to cash in on this government largesse.

July 31, 2009

There will be no magic involved in adding new renewable energy to the electricity mix. It will involve long-distance transmission lines -- lines that, in some instances, have yet to be built.

While the infusion of federal stimulus funds earmarked for building new transmission is seen as a boon to the industry, it is not a quick fix. The American Reinvestment and Recovery Act appropriated $6 billion to the U.S. Department of Energy's loan guarantee program to provide up to $60 billion for renewable energy and electric power transmission projects. Building new lines will still require considerable investment of capital from the industry, as well.

July 29, 2009

With carbon cap-and-trade legislation wending its way through Congress in the early part of the year, many electric power companies were taking a wait-and-see attitude toward new plant construction. And wait. And wait.

That doesn't tell the whole story, though, as many producers are doing more than wait -- they are canceling coal plants outright. According to the Edison Electric Institute, at least nine coal plants representing 6,650 megawatts have been canceled by May 2009, joining 24 plants that were scuttled in 2008.

July 27, 2009

Times are tough inside utility boardrooms. A biting recession and volatile energy prices are creating a backlash among the various constituencies, forcing those members to generally stifle pay raises and especially those for top managers.

Executives must be concerned about the messages that their compensation deals are sending to employees and shareholders. It's particularly true in a difficult economy when companies are cutting expenses and reducing staff. Workers don't mind seeing their chief executives get rewarded for good work. But they, too, want to be compensated if they deliver results. Now, though, it is time to hunker down so as to emerge lean and mean when the coast is clear.