White Papers New Age Energy Markets - Challenges for Utilities, | Page 2

The New Age Energy Markets
The North American power and gas markets are undergoing an accelerating evolution
driven by increasing regulation, new and emergent technologies, and a persistent surplus
of natural gas brought about by the “shale revolution.” The transformation from a coal-centric power market to one reliant upon renewables and natural gas for baseload power generation has had profound operational and commercial implications for both the electricity
and natural gas markets.
Much of the change that has emerged has been catalyzed by regulation at the federal,
regional and state levels, including emissions/greenhouse gas regulation and renewable
portfolio standards. These regulatory mandates have been largely answered by technology
– cheaper and more efficient solar and wind generation, abundant sources of natural gas
from long-reach lateral drilling and massive hydraulic fracturing, smart grid technologies
that improve grid efficiency and reliability, and more efficient industrial and consumer appliances that reduce system load. In aggregate, these changes have had massive and ongoing impacts across the energy industry in the US, increasing complexity of operations and
affecting the business models of many of its participants.
For power utilities, IPP’s and traders, this New Age Energy Market presents a number of
challenges that must be addressed to operate profitably.
© Commodity Technology Advisory LLC, 2016, All Rights Reserved.