New Year Reckoning

The one thing we in the energy industry know is that senior leadership is dominated by the accounting of their business.  Customer satisfaction is often included in the key performance indicators, and reliability is watched for its implications on that as well as due to its operational costs.  However, the bottom-line results are usually the key metrics.

I am waiting with bated breath for the results to be reported early this next year.  Clearly 2021 was a year of recovery from 2020 but 2020 wasn’t as bad for many as first thought.  Residential loads were and are increasing.  Office space has been decimated with the work at home impacts.  We moved most of our manufacturing offshore so that is not coming back except for the occasional flag waving situation.

This past year will probably evidence the sea change in longer term energy use patterns … or will it?

The politicians are all gleefully patting themselves on the back about the future of EVs but supply chain issues will certainly limit the actual increases and disappoint them.  Americans are still in love with their fossil fueled choices and the freedom to make quick pitstops still dominates the landscape.  Sure, surveys indicate people would like an EV but only for around the town driving … so how is that going to reduce the fuel use in the US.

Nope, even the EIA predicts fuel use will go unchecked in the next five to ten years.

It has been interesting to watch how stock prices for electric utilities that promote solar and wind have been trading at a premium over the typical bricks and mortar energy companies.  The accountants will all attest to the simple fact that rooftop solar is far less economically efficient than solar farms.  How will the net metering battles across the US settle out?  Will the regulators agree with the accountants?

Or is this an ideological battle that goes beyond accounting?  Is this truly an existential situation where the fate of our planet is at stake?  If that is true, shouldn’t the accounting be on carbon dioxide rather than corporate economics?  And if that is true, shouldn’t we be managing our transition toward a renewable energy source with consideration of how much the climate benefits from the near term.

Finally, do we really believe what we do here is going to make a big difference around the world when India and China have kicked the can down the road.  How cost effective will energy policies I hear being promoted actually pen out when the accounting is done.

There is one thing for sure.  This year and next will report energy companies hit or exceeded their targets … I just wish they hadn’t moved those targets to get those results.

Happy New Year

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