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ElectricalTrends is a communications vehicle offered to the electrical distribution industry by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates' and Channel Marketing Group's insights on industry trends, observations on industry activities and issues and offer ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.

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Monday, June 30, 2008

An Energizing Future for the Electrical Industry

A recent article in Forbes posed this question, "What happens when you don't build more power plants?" and we'll add "and the future of the automotive industry is electric cars". Combine the two, plus the fact that electricity usage is up 115% since 1973 (oil is up just 15%) due to the increase in electrically-run equipment, and you get a bright future long-term for the electrical industry.

Which gets one thinking..."if electrical generation needs increase, where are the opportunities and who benefits from them?"
  • To address energy usage, increased energy conservation and improved efficiency needs to occur. This benefits electrical distributors who actively promote themselves as energy efficiency resources. (Shameless promotion - our Greening of the Electrical Channel research report shares end-user/contractor insights on their needs).
  • The Forbes article references the possibilities of brown-outs. Could this affect power quality? Is there the potential for surges? What other issues are there? All issues that the electrical materials industry can provide solutions?
  • If new power generation is needed, there are significant opportunities for electrical materials as well as needs from utility distributors. Could electrical distributors become more involved in the utility market? Some already are - HD Supply, WESCO, Irby/Sonepar, Gexpro, Graybar. Could you see electrical distributors buy utility distributors (Irby/Sonepar just did, acquiring Equity Utility Services, and it wouldn't surprise us to see HD Supply and WESCO on the acquisition trail) or utility distributors buy electrical distributors?
  • And what powers these plants? There could be increased opportunities in clean coal, natural gas and associated industries (pipelines?) let alone the utilities' investments in renewable energy generation systems (wind and solar) or private systems that generate electricity which can be consumed with excess sold back to the electric company.
  • Or what about new products. Something needs to charge the electrical vehicles that will be sitting in parking lots! What else will be needed in homes? Whole home energy management systems will be placed in new homes to take advantage of the new metering systems that are being piloted in various parts of the country. Where will product innovation come from?
And there can be much more. So eventhough the market may be "challenging", for those who look to, and strategically plan, for the future, it can be energizing.

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