In a situation where energy utility companies across Europe are faced with multi-dimensional challenges of huge customer and political resistance to recent and forecasted price increases, a new thought piece by Arthur D. Little reveals practical solutions to these challenges with a focus on sustainability. The new article "
Pressure on Energy Prices" looks at how incumbents adopting such practices are not only surviving, but gaining a competitive edge in terms of generation capacity, carbon position, revenue per customer and cost structures.
"Pressure on Energy Prices" offers a valuable insight into how European utilities have the potential to turn challenges into opportunities for improvement and sustainable growth. It details several strategies available to incumbents to address the risks and threats to their business:

• Organizational and financial restructuring
• Business process management
• Improving operational expenses
• Reducing costs and increasing efficiency
• Unbundling services
• Rethinking and reworking of the organization

Given the two-way squeeze on European energy utilities - upward pressure on costs and investment, downward pressure on pricing - the imperative to act quickly is clear.  The burning question is what form that action should take to deliver results - financial, social and environmental - that will satisfy shareholders, government, society and other stakeholders in the short, medium and long term.
"For many energy utilities, costs are a major concern," remarks Nick White, Director of Arthur D. Little's global energy utility practice. "However, in addition to managing costs at serve and service levels to remain competitive at the retail end, integrated utilities need to find ways of improving efficiency in utilizing primary fuels at the generation stage to achieve any significant impact on overall cost positions."
With oil, gas and coal prices hitting record highs in recent months, and massive investments needed to meet customer and regulatory requirements, companies must ensure adequate cash flow and profits in line with these higher costs and make the difficult but necessary investments.
"This is a critical time for utility organizations to be asking themselves hard questions," explains White.  "The solution to a sustainable, competitive future for the energy market depends on it."
Pressure on Energy Prices is now available for download at
www.adl.com/energyutilities