The Brattle Group Estimates $1.5 Trillion Needed in Utility Infrastructure Investment...

The Brattle Group Estimates $1.5 Trillion Needed in Utility Infrastructure
Investment Through 2030

NEW YORK, April 21 /PRNewswire/ -- The Brattle Group has determined that
growing demand for electric services will require investment on the order of
$1.5 trillion between now and 2030. Peter Fox-Penner, co-chairman of The
Brattle Group, presented the preliminary findings at today's Edison Foundation
conference "Keeping the Lights On -- Our National Challenge."
"With fuel costs at record levels, plant construction costs soaring, and
increased pressure to combat global climate change, electric utilities are
facing the greatest investment challenge in their history," said Fox-Penner.
The Brattle study projects generation, energy efficiency, transmission, and
distribution investment needed in the United States between 2010 and 2030,
factoring in a range of capacity deferrals that are possible through the
implementation of energy efficiency programs.
Speaking at today's conference, Fox-Penner noted that new and replacement
generating plants will cost about $560 billon through 2030, absent a
significant expansion of energy efficiency programs or new climate
initiatives. Transmission and distribution together will require nearly $900
billion by 2030, under current trends and policies.
Additionally, The Brattle Group has estimated that incremental generation
capacity needs could be decreased from 224 to 151 gigawatts (a 33 percent
reduction) based on an analysis by the Electric Power Research Institute,
which indicates that overall electricity consumption between now and 2030
could be reduced by an additional 7 to 11 percent below the 2007 Energy
Information Administration baseline in response to aggressive energy
efficiency programs.
Global climate policies are also projected to increase the cost of new
electricity supplies. For instance, equipping all new coal plants with carbon
dioxide capture and storage systems -- technologies not yet commercially
available - would add roughly $200 billion to generation investment needs,
according to the preliminary study. In all scenarios, the study found that
higher electricity prices will reduce demand, an effect that The Brattle Group
is examining further in its ongoing study.
"Our study shows that the electricity industry faces enormous investment
needs under every conceivable scenario," Fox-Penner said. "Transmission and
distribution investments needed to create a customer-friendly 'smart grid' and
integrate renewable energy will be more costly than generation and energy
efficiency investments. While providing great benefits, plug-in hybrids will
also add to the industry's supply challenge. Regardless of the mix of
efficiency and fuels, the industry needs a strong balance sheet to accommodate
this massive investment program."
Marc Chupka and Robert Earle, principals of The Brattle Group, are
directing the study. The full report, on which these preliminary findings are
based, is sponsored by The Edison Foundation and will be available in June
2008. Today's presentation detailing the preliminary results is available at
www.brattle.com.
The Brattle Group provides consulting services and expert testimony in
economics and finance to corporations, law firms, and public agencies
worldwide. Areas of expertise include antitrust and competition, valuation
and damages, and regulation and planning in network industries. For more
information, please visit www.brattle.com .
SOURCE The Brattle Group

Laura A. Waters of The Brattle Group, +1-617-864-7900,
laura.waters@brattle.com