The Energy Industry – including the utilities and oil and gas sectors – is predicted to experience great volatility beginning in 2010 as new environmental regulations go into effect.With the continued debate of the Cap-and-Trade Bill and the ARRA grants issued to energy companies committed to creating and implementing sustainable energy initiatives energy companies, technology providers, government regulators, and consumers must all be prepared for upcoming changes in the industry.

Gartner’s overarching prediction is that energy costs will sky-rocket due to the costs of creating sustainable energy and updating the energy grids to smart grids. The smart grid upgrades are necessary to better regulate energy distribution and incorporate alternative and sustainable energy sources. Most traditional energy grids do not have the capability to do this. Gartner also predicts that with cap-and-trade or other means of carbon taxation consumers will face higher electricity costs. Ultimately, Gartner predicts that electricity prices will increase by an average of 30% by 2014 for OECD countries that currently rely heavily on fossil fuels. Gartner recommends that IT companies targeting the Energy Industry should position toward advanced metering infrastructures that enable price transparency and greater consumer efficiency.

In North American Utility Industry 2010 Top 10 Predictions, IDC Energy Insights agrees that utility prices will accelerate in 2010, but that the industry as a whole will see a massive recovery from 2009. IDC predicts that as the global economy rebounds and the industry sector receives an infusion of grant money for energy projects that the Energy Industry will have a strong 2010.Some of the other predictions include:

• North American intelligent grid ICT spending will reach $18 billion by 2013
• The first wave of electric vehicles will emerge along with the necessary car charging infrastructure
• Smart cities will emerge and test the basis for the intelligent economy
• IT spending in the Utilities Sector will greatly increase
• Renewable energy capacities – with wind power being the leading source – will exceed the number of natural gas plants built

For Oil & Gas, new project development remains a primary concern as “easy oil” sources are exhausted. As a result, Oil & Gas companies have to embrace new technologies – primarily digital energy investments – to assist them in better locating, extracting, and processing oil and gas sources. Climate change legislation may also have a large impact on the sector causing Oil & Gas companies to create strategies for the increased sustainability standards expected from the legislation. Overall, IDC predicts a much stronger year for the Oil & Gas sector as the economy becomes more favorable to increased demand.  

IDC Energy Insight’s Worldwide Oil and Gas Industry 2010 Top 10 Predictions also cite the following:

• An increase and improvement in the use of technology with IT budgets recovering for 2010:

o   Exploration and production information management will need to be more accessible and collaborative with improved data quality

o   Real-time information and surveillance for enhanced oil recovery projects

o   The need for IT support for energy traders will increase

o   Enterprise-wide adoption of BI

o   Improved Supply Chains will require enterprise-wide IT systems