CERAWeek: CERA expects more government involvement in power

Lawrence Makovich, CERA vice president and senior advisor for global power, on what CERA thinks the big challenges are in the power sector:
This is now an intersection of a new wave of investment spending globally, with Asia’s investments particularly large, with increasing costs for building new power plants and transmission systems.
It will test the regulated and market structures around the world, Makovich said. Already there are concerns, such as recent power shortages in South Africa, he said.
Also, the power business is becoming more global, versus a regional focus. Besides the common trends in infrastructure costs, the U.S. power sector’s reliance on natural gas, as the market grows global, it further integrated power markets around the world.
Currency exchange rates are also dictating construction schedules, and of course the looming likelihood of carbon legislation will matter greatly.
“Clearly the power sector is a key part of any policy that is developed here,” Makovich said, and it has to happen with good data.
What climate change means “is government will get more involved in the power sector than it has in the past,” because of policy efforts, Makovich said.
Technologies, like CO2 sequestration, aren’t mature enough to handle the policy demand yet, he said. Conservation and efficiency are becoming more vital too. A lot of CERA customers are asking about it, he said.