As a tenth of a cent reduction in electricity rates can save large manufacturers and businesses millions of dollars, the ability to keep energy rates low helps attract and retain business, provide economic stability and create jobs.
According to the more than dozen presenters on hand for the Second Annual Goizueta Energy Symposium, sponsored by the Goizueta Energy Markets Club, the key to keeping rates low in the U.S. is natural gas and accompanying advances in shale technology.
But switching from coal to natural gas – or toggling between the two resources – isn’t without its challenges, explained keynote speaker Kim Greene, EVP and chief generation officer of Tennessee Valley Authority (TVA). To bring on new technologies, extract natural gas and transport it takes time. “The lag to add 5000 megawatts takes around 36 months,” Greene said. Like most utilities, TVA produces an Integrated Resource Plan, a 20-year plan that studies different scenarios—from changes in demand to the effects of shifting its portfolio of energy products to maximize efficiency, minimize cost, environmental impact and risk. “Solving all those problems simultaneously is not easy,” added Greene.
In the energy and power markets, economical interest and financing rates continue to attract investors. Brant Meleski 97MBA, managing director of energy and power investment banking, Bank of America Merrill Lynch, called the current investment environment an “absolute bonanza” for capital investors. There are some losers, however. With demand for coal continuing to diminish, some operators have chosen to close plants entirely or have them sit idle for large parts of the year. And while a nearly 30-year trend of declining interest rates has been good for businesses, it hasn’t been so good for individual investors. “The big question,” said Melenski, is “when do we break this trend?”
Over the course of the symposium, experts from a variety of energy related fields discussed these and other topics, including nuclear power, infrastructure and transmission challenges, the effects of Hurricane Sandy, current and future energy opportunities, as well as careers in the energy industry. “Now is a good time to become part of this space,” noted Mohsin Sohani 13MBA, president of Goizueta Energy Markets Club.
With approximately 30 members, the Goizueta Energy Market Club’s mission is “to promote the development, discussion, and dissemination of energy related topics,” explained Sohani. “The club provides an end-to-end forum for the energy industry.” As such, it holds meetings, facilitates on campus speakers, organizes company and plant visits, and promotes energy education.
– Allison Shirreffs