NUCLEAR – Pick up in demand for grid scale reactors from foreign suppliers that can do the job at a lower cost, for a simple reason, they are cheaper, period. if you’re going to go nuclear, why do it in the more expensive way? The market will be dominated by three players: Rosatom (Russia), KEPCO and associated firms (South. Korea) and by the Westinghouse AP 1000 (Canadian). No new orders however will come from the US – at least for another year unless federal subsidies are increased.
FOSSIL FUEL USE – Globally, fossil fuel usage including coal continues to increase. 2024 is the year oil and gas companies appear to win. Gas will be increasingly seen as the cleaner (ie lower CO2 emitting) alternative to coal for power plants including the US. The growth of LNG is unclear in part due to storage and refill limitations. One utility noted it would take a month to refill storage after only one unseasonably cold winter day.
REGULATION – This year the term “regulatory capture” becomes more popular to describe regulators who function more as employees of the utilities they are supposed to regulate (see Georgia). And this points to a significant and largely unrecognized future risk we want to highlight. In states where one political party is dominant, like Republicans in Georgia or Democrats in NY, the prevailing regulatory regime is unlikely to change dramatically. But in states where political parties are more evenly balanced, like Wisconsin, a change in the governor could mean a change in regulatory personnel and a dramatic shift in policy. Utilities that were authorized to build new fossil-fired generation from supportive Republican regulators may be exposed to large stranded asset risk from less sympathetic Democrat’s appointees with a more climate-attuned agenda.
CLIMATE – This is the year we unofficially abandon climate targets because of the growing recognition they are unobtainable. See # 2 above. Also, one of the US’s two main political parties claims climate change is a hoax with a goal of neutering related administrative agencies. As a popular idea, denying the worst impacts of climate change will get stronger, not weaker.
RENEWABLES UNDERGROUND – Two developments change the concept of renewables. renewables: developments in geothermal drilling and confirmation of commercially viable reservoirs of renewable hydrogen underground. Drill baby drill could be the new mantra for the environmental movement as well. The quantity of energy that could be produced would make these developments game-changers.
TRANSMISSION – Due to bottlenecks and 5+ year queues for access to the grid, coupled with limited new transmission construction, resource developers shift focus to distributed resources serving local load. Renewables and SMRs both benefit.
HYDROGEN – The world’s lightest element replaces small modular reactors (SMRs) as the most over-hyped idea but we become more realistic about its appropriate industrial uses. Then again, see #5 above, in which case the hype is more than justified.
EXPROPRIATION OF UTILITIES – The public votes in favor of takeovers of private utilities. Results from rising prices and poor service. Maine will be first. But the legal condemnation will take a long time, ending up with high price paid.
INFRASTRUCTURE SITING – Those siting utility infrastructure will begin, in climate change acknowledging states, to consider potential sea level rise and possible coastal abandonment as a factors in the location of long lived assets like power stations. The insurance industry will play an increasingly large role in these decisions and investors will increasingly look to the insurance industry for clues as to climate-related asset risk.
OBLIGATION TO SERVE – This year will see the beginning of the demise of the old-time utility obligation to serve, especially in deregulated states like Texas. This means the utility’s relationship with its customer is on a “we’ll sell it only if we have it” basis – after that you’re on your own. Power outage lengths will continue to increase. Responsibility for electric reliability increasingly shifts to the customer with immediate implications for diesel and propane generators, residential and commercial solar plus batteries, and large battery EVs.