CONSULTING

Conclusion on Corporate Finances
The power sector is in a period of transformation as the need for decarbonization is leading to the
larger deployment of renewable and greater energy efficiency. This, coupled with falling fossil fuel
prices, is reducing the revenues of the traditional utilities, that until recently had remained focused
on maximizing profits from its existing infrastructure.
Furthermore, already, in systems with higher levels of deployment of solar and wind power and
other variable renewables the operational regime and economic profile of the power market has
changed. This has been increasing the need for flexible generation and reduced the need for baseload
capacity such as nuclear and coal. Further reducing the opportunities for further nuclear
power deployment, as illustrated by the technical and/or economic problems of the world’s most
experienced nuclear exporters.
These factors are recognized by, and being acted upon by the financial community, with negative
outlooks for many power companies particularly for those without regulated prices for
conventional power. However, even in regulated market, the onward drive of new technologies is
expected, by analysists, investors and the industry itself, to be only a temporary block of the
development of a new power market, driven by new market actors and technologies and greater
customer engagement.
In some countries, the extent of these have been recognized and the existing incumbents are
restructuring to develop business models to sell; energy services, rather than just kWhs; balancing
services; and smaller, often decentralized generation units. However, this is not always these case
and many are retrenching and are unwilling to reform, which is likely to threaten their economic
stability.
Mycle Schneider, Antony Froggatt et al. 74 World Nuclear Industry Status Report 2016