Need for Consolidation and Beyond Boundaries - European Utility Companies
Well established energy companies in Europe are feeling the pressure of adverse economic crisis. Government policies focused on the green energy is also another factor affecting the optimization of capital deployment.
Companies have developed vast organizational skill sets in operations, trading, technology, etc. How will they leverage this skill that they developed and nurtured over such a long period in this adverse environment?
Will we see change in regional focus of these European companies as many other regions urgently need this skill set? In order to understand the possibility, let us ask some basic questions:
- Do we see required opportunity in terms of energy volume outside Europe?
- Do we believe substantial process optimization possible in existing Utilities outside Europe?
- Do we see possibility of deploying full grown energy efficient generation technology such as nuclear, coal based technologies?
Answer seems to be YES for the above questions, making it the right time to shift the regional focus of the European companies
While in Europe, can they afford to continue what they are doing? Let us ask some basic questions:
- Will the saturation leads to more energy market integration and consolidation?
- Will such integration be beneficial to end customer?
- Will vertically integrated companies split to focus on specific business area where they believe opportunities are bigger?
Answer again seems to be YES, making it a right time to focus only on parts of value chain where opportunity for higher margin exists.
So do you also believe in further consolidation within Europe and European investment spread outside Europe in areas like generation and trading?
