UTILITIES
For utilities , internationAL expansion can be a tricky thing . It means placing your assets in countries other than your own and essentially starting up a new business . For some utilities , international expansion is the key to growing your business and remaining successful . For others , it can be a mistake that ends up in a substantial loss of funds .
What makes a utility ’ s expansion successful , and what are some companies that have successfully gone beyond their borders ?
Duke Energy In the U . S ., Duke Energy is at the top of the list when it comes to utilities . The country ’ s largest electrical power holding company , Duke Energy is surprisingly focused on primarily the U . S .
Duke owns a whopping 58,200 MW of base-load and peak energy generation in the U . S . and services roughly 7.2 million customers . Also noteworthy is Duke ’ s large service area , which spans 104,000 square miles .
With such a large service area , it would make sense that Duke would want to stay put . However , the company has expanded into Latin America , Canada , and even Saudi Arabia .
Duke ’ s international subsidiary is called Duke Energy International and is headquartered in Houston , Texas . Most of its 4,900 MW of generation capacity are in Latin America . The company entered the region around the turn of the twenty-first century and has been highly successful ever since .
According to investing analyst site Trefis , the company has been successful in Latin America because of the region ’ s high growth potential and high electricity prices in the region , though drought could put Duke ’ s Brazilian operations — which are primarily hydroelectric — in Jeopardy .
“ If the drought continues in the next year as well , it could potentially impact the margins for Duke ’ s international operations ,” Trefis writes . “ Chile has also been facing a drought in recent times and this has slowed down hydroelectric power generation in the central part of the country . If this were to persist into the future , the output of Duke ’ s hydro-power operations in the country could also be impacted .”
While it ’ s certainly a big factor in Duke ’ s international expansion ,
10 November 2014