Global Utilities & Independent Power Producers 2024 Outlook: A Steady Track to Electrification

We view the 2024 outlook for utilities and independent power producers to be neutral. While we believe the sector continues to face challenges driven by climate change and general affordability concerns, these have been tempered somewhat by interest rates that appear to be stabilizing and lower inflationary pressures.

Key Highlights:
— Our outlook for the industry is neutral despite the significant capital expenditures (capex) needed for the electrification of the economy – which could pressure balance sheets for the next few years.
— We expect customer bills to remain a top concern but anticipate electricity prices to be more stable this year relative to the past few years.
— Overall, we expect credit ratings to remain stable.

“We expect the general trend this year and in the next few years to revolve around electrification and decarbonization of the economy, with the pace of investment likely to quicken in order for the industry to meet government targets to reduce fossil fuel-based power generation,” said Tom Li, Senior Vice President, Energy & Natural Resources. “The significant capital needs could pressure some balance sheets though, so medium-term capex plans will be a particular focus for us for the year.”

Global Utilities and Independent Power Producers 2024 Outlook A Steady Track to Electrification