What is leadership?
Richard Stavros is Fortnightly's Executive Editor.
This question becomes more pressing in an evermore uncertain and volatile world. The late famed economist John Kenneth Galbraith once opined, “All of the great leaders have had one characteristic in common: It was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”
Utilities must confront a myriad of major anxieties today, such as skyrocketing commodity prices, the possibility of tougher environmental restrictions related to global warming, and the prospect of rising interest rates and lower valuations (see “Interest Rates Strike Back”).
As if that weren’t enough, the industry must undertake multi-billion-dollar building programs to meet future demand without fully knowing whether such power-plant technology choices will bear out as the least-cost option (given uncertain fuel prices and environmental policy).
More specifically, utility executives will have to choose whether to take on the financial risk of building more nuclear plants, and the environmental risk of more coal plants. Will they build gas-fired plants on the hope of more liquefied natural gas exports (LNG) coming from overseas? Will they have to contemplate merger options with utilities a few states away in hope of better economies of scale?