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Energy & utilities
Overview
When Xchanging last provided an overview of the energy and utilities sector, our predominant theme was: "volatility". A better word to summarise the sector in the closing months of 2012 might be: "uncertainty".
Demand for energy mirrors prevailing levels of economic activity.
With that in mind, the current economic climate in many developed economies and the ongoing soverign debt crisis in the eurozone inevitably impacts on demand for energy in particular.
Conversely, the industrialisation of emerging nations like China and India is driven by a huge demand for oil and gas, creating new pressures on energy resources and the price the world at large finds itself paying for them.
This is an example of contrasting priorities - and contrasting responses.
In the economically challenged developed economies, pragmatic politicians are placing noticeably less emphasis on the "green" energy agenda as the more immediate need is for "affordable" energy.
As The Economist reports, some £200 billion needs to be spent on Britain's energy sector by 2020 to replace retiring coal and nuclear-fired power stations and meet difficult targets to cut greenhouse gas emissions. Differences on how to meet these needs and meet environmental policy commitments is a noticeable strain for the Coalition government1.
Meanwhile, as reported in The Financial Times, the International Energy Agency has predicted that 2012 would be the first year that developing countries buy more oil than industrialised ones2.
Of course, pure economics isn't the only the only force that will shape the energy sector over the next few years. Politics also exerts a major influence - particularly with continuing turbulence in the Middle East.
The Arab Spring uprisings beginning in May 2011 were largely motivated by a political objective: a desire for greater democracy. But they had an immediate economic impact for industrialised nations: the price of oil rose sharply in response to uncertainty over supplies
BP Group Chief Executive Bob Dudley sees open markets as the way forward through this period of disruption, pointing to the spur they provide for competition, innovation and growth3.
Those open markets may, however, prove particularly elusive if succesor regimes amongst the Arab Spring countries take a more nationalistic approach to their energy assets in the years ahead.
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We offer energy and utilities organisations the opportunity to remove complexity across a full range of business processes. By unburdening themselves of back office functions which support their operation but are essentially peripheral to their vision and mission, we give these customers time and efficiency to focus on what they do best. The result is more flexibility and greater efficiency in the face of formidable challenges. Customers in this sector already trust us with risk management and finance and accounting processing. When required, we can also process payroll, learning and development, recruitment, and HR administration as well as offshoring services which can deliver advantages including speed to market, back office transformation, on-demand business, improved customer service and cost optimisation.
Customers include: Mercuria Global Energy Solutions
We offer extensive technology capabilities across a variety of industry sectors. In energy and utilities specifically, our solutions include providing hosting and network services for a UK-based multinational and delivering infrastructure management for one of the largest independent energy trading companies in the world. On the wider stage, our infrastructure team supports customers’ growth with cost effective, scalable and rapidly-deployed solutions. We also design, build and run the software that supports a range of business processing solutions. We embed our intellectual property (IP) to create a solution faster and more cost-effectively than our customers can themselves. We can also provide customers with Total IT Outsourcing (ITO) solutions – a single point of supply for an end-to-end managed service.
Customers include: Centrica, Mercuria Global Energy Solutions
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