Emerging Power & Utilities Risk of 2012

Emerging Risk
Emerging risks in the power sector usually seem to revolve around the introduction of new technologies, or changes in regulation or the complex contractual and trading arrangements seen in many power markets.

An example of the former is the development of sodium-sulfur batteries to store energy on electricity grids. This is particularly useful to support renewable energy generation, which has inherent intermittencies depending mainly on the weather.

These batteries have been developed by the Japanese company NGK Insulators in cooperation with Tokyo Electric Power Company. However, they appear to represent a major fire risk, and there have been three fires in Japan. The most recent was in September last year, prompting NGK to suspend production of the batteries in order to investigate the cause and consider preventive measures. In the meantime it has advised customers not to use their batteries.

Meanwhile in Lerwick on the Shetland Islands, a local man who has been campaigning against the use of one of these batteries at Lerwick Power Station, on the grounds that it would create a dangerous fire risk, appears to have been vindicated.

This post was part of the special feature about What Risks Will Emerge in 2012? published January 24, 2012. The feature also covered emerging risks in these other fields:
Aerospace
Analytics
Captives
D&O
Employee Safety
Energy
Engineering
Environmental Liability
Financial Institutions
Health Care
Life Sciences
Mining
Political Risk
Renewable Energy
Supply Chain Interruption
Terrorism
Trade Credit

About David Reynolds

David is an Executive Director in Willis' Global Markets International in London, where he advises large national a…
Categories: Power & Utilities

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