Overcoming investor uncertainty in power supply: Addendum
It is not an overstatement to say the issues facing the energy sector – not just power generation but transmission and retail as well - are massive.
$43 billion may be considered a comment-provoking sum to spend on a national broadband network argued to take Australia into a new long term economic future.
Yet this figure pales into insignificance against the sums involved in powering the existing and projected known economy into even the near mid-term.
What is, for Government, a ‘diabolical’ policy dilemma, is also a high risk landscape for rationally thinking investors with international options within the same asset class and indeed other assets classes from which to seek returns.
The attached paper is, in many ways, a summary of an earlier 60 page analysis of the issues currently facing investors considering power as an asset class, which was released by Deloitte’s Energy and Oil & Gas teams in June 2010.
That paper had been many months in the making - and subject to numerous revisions- as the investment landscape underwent a stream of change in response to a constantly changing political and policy landscape.
It was not thought the landscape would remain unchanged – in fact the lack of resolution of key issues guaranteed further change.
However, despite all the changes, in real terms, very little has.
Read the latest update in Deloitte’s energy series about how time is running out in terms of giving investors greater clarity in an environment where the need for programs to deliver both carbon constraint and affordable electricity remain very much unfinished business.