Nuclear Power Generation Driving Forces of Change
Autor: tennis4030 • April 4, 2012 • Research Paper • 910 Words (4 Pages) • 1,682 Views
Nuclear Power Generation
Driving Forces of Change
There are several driving forces of change in the Nuclear Power Generation industry. First, regulations impede industry participants from building plants since construction permits are difficult to attain. In addition, once plants are constructed, players must go through in-depth review procedures in order to upgrade existing facilities. Overall, supervision of nuclear power operations is strict. Second, uranium is the fuel used to generate nuclear power; therefore, its price has a considerable effect on industry performance. (Exhibit 7) Third, downstream demand from manufacturing industries accounts for around thirty percent of overall industry need and acts as another driving force of change.
Key Success Factors
The key success factors in this industry include player’s ability to pass on cost increases, ability to utilize optimal capacity, good management of finances and debt as well as being able to adjust well to changing regulations . The regulatory environment for the industry changes often and firms must be able to adjust operations accordingly. In addition to dealing with regulatory officials, firms must deal with government state policy, which strongly affect pricing in the industry.
Coal & Gas Power Generation
Driving Forces of Change
The driving forces of change in the Coal & Gas Power Generation industry are similar to those that exist in Nuclear Power Generation. First, industrial use of electricity by manufacturing industries accounts for about 30% of demand (Exhibit 8); as a result, this demand is a major external driver. Second, world price of coal significantly impacts costs for firms as black coal is the main fuel used in the electricity generation industry. (Exhibit 7) Furthermore, shifting oil prices have a relatively minute effect on costs for electricity generators since oil-fired plants account for a small amount of total fossil fuel electric power generating capacity. Third, the world price of natural gas is a significant driver in the industry. Gas has become an important fuel source as it is more environmentally friendly than coal, and firms are utilizing it in order to reduce their environmental impact; therefore, changes in gas prices not only affect the industry’s costs but also determine whether gas is used as a fuel source.
Key Success Factors
The key success factors in the Coal & Gas Power Generation industry include players’ ability to pass on cost increases, ability to utilize optimal capacity, good management of finances and debt as well as being able to negotiate successfully with regulators . First, firms must be able to effectively pass on cost increases since cash operating
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