Lawrence Makovich, IHS Chief Power Strategist, chaired the Thursday afternoon plenary on "The Future of Power Technology and Infrastructure." Dr. Makovich began the session by asking Steve Bolze, President and CEO of GE Power & Water, about the current state of the power industry. Mr. Bolze emphasized that the power industry's long-term outlook shows very steady growth. He noted that 70% of the growth in the power industry is in developing regions, citing China, Africa, and the Middle East as examples of where demand growth is the strongest. US Deputy Secretary of Energy Daniel Poneman agreed with Mr. Bolze that the lion's share of electricity demand is in emerging markets. Steven Edwards, President and CEO of Black & Veatch ,added that the US power market has recovered but has yet to reach pre-recession levels.

Mr. Bolze noted that there has been a big shift toward mainstream renewables, particularly wind and solar energy. Over the past four years, the cost of wind and solar energy has fallen by 80% and 75%, respectively, he said. Mr. Bolze noted that while a big shift toward renewables is occurring, there is still plenty of room to grow in the power industry space.

The panelists also discussed the role of coal in the power generation sector. Dr. Makovich began the discussion by noting that coal retrofitting has been on the decline in the United States. Mr. Edwards agreed and added that China has been very aggressive in coal retrofitting and already has made plans to shut down 50,000 coal plants. Mr. Poneman added that despite the decline of retrofitting in the United States, coal will remain a major source of energy.

The second half of the session concerned nuclear technology. Mr. Poneman noted that the United States has been very successful in developing nuclear power, largely because it has some of the highest safely standards in the world. Mr. Bolze noted that nuclear projects are currently being built in the United States and that the success of these projects is very important. Dr. Makovich questioned the panel about the likelihood that Germany would change its view on nuclear technology. All the panelists agreed that it is very difficult to predict how Germany will proceed with respect to nuclear energy. Mr. Poneman commented that Germany has deep-seated issues about nuclear energy, but the country also has very strong feelings about greenhouse gas emissions.

Finally, the panel discussed how the recent events in Ukraine would affect the power industry. Mr. Bolze emphasized that a number of short-term projects would likely be put on hold owing to these developments. He commented further that the effects on the energy supply chain would not be as severe as they were during the Fukushima nuclear power plant disaster. Mr. Edwards added that one major project by Black and Veatch was recently shut down as a result of the deteriorating relationship with the Ukrainian government.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.