Top 10: 2012 Utility Industry Predictions

By Rick Nicholson, Group Vice President, IDC Energy Insights

Rick Nicholson, Group Vice President, IDC Energy Insights

At the end of each year IDC Energy Insights develops a list of top 10 predictions for the upcoming year for various industry segments and geographic markets.  Since IDC is a technology market research and advisory firm the predictions are focused on the role of technology in the energy industry but are presented in the context of the business and regulatory environment impacting technology investment.  Predictions typically look beyond just the upcoming year and include a 2-3 year forecast horizon.

For the past three years, technology investment in the North American utility industry has been dominated by two opposing forces. The American Recovery and Reinvestment Act (ARRA) of 2009 provided billions of dollars of stimulus funding in the form of grants, tax credits, and loan guarantees, accelerating investment in a range of smart grid and clean energy technologies. On the other hand, the recession had a major negative impact on utilities, causing energy consumption and revenue to drop, thus reducing budgets for technology investments not supported by ARRA funding. This hit IT budgets particularly hard. With all of the ARRA funding allocated and a majority of the funds disbursed to utilities, 2012 will be the first real "post stimulus" year. In 2012, technology investments will need to be supported by positive business cases that satisfy both utility and regulatory requirements. As such, it will be critical for utilities and vendors to understand the key trends in each technology market segment.

It is with reference to this economic environment that IDC Energy Insights developed its North American utility industry 2012 top 10 predictions, a summary of which are presented here.