Development of Shale Gas reserves is going to be the hot energy issue in the immediate future. It seems at first sight that the battle will be on the familiar territory of oil companies vs environmentalists, but there's more to this than meets the eye.
Market Insights on Renewables
Britain has been luckier than it deserves in its energy resources. Abundant coal reserves gave us a head start in the Industrial Revolution, North Sea oil and gas offered tax windfalls and cheap power in the late twentieth century, and now as the heydays of both are behind us, we find ourselves with access to an unrivaled offshore wind resource.
Ringo Starr was once asked if he thought the synthesiser was revolutionising music.
His deadpan response was ".. Oh yeah, it's a total revolution...like, now you can make a guitar sound like a piano, and a piano sound like a guitar..."
Watching the UK utility market since privatisation leaves you with a similar feeling. There has been disaggregation, vertical integration, international expansion, multi utility, product and service diversification. Foreign ownership, foreign retreat, mutualisation and "thin equity" models. The wheel is still turning, with CEO's departing under a cloud, non-core businesses for sale, and large M&A deals in the offing. But has anything really changed in the fundamental value drivers?