DAVOS, Switzerland (Reuters) – Duke Energy Corp (DUK.N) will look for opportunities to acquire assets as the U.S. power industry faces a wave of consolidation, its chief executive said on Wednesday.
“The opportunities will only increase over time and we’re always looking for opportunities to strengthen our position,” Jim Rogers told Reuters on the sidelines of the annual meeting of the World Economic Forum.
U.S. power firms, already struggling with the economy in recession, also face the huge cost of reducing carbon emissions as President Barack Obama gets serious about tackling climate change.
“This is the most capital-intensive industry in the United States … the case for consolidation in a very fragmented U.S. market is greater today than ever before,” Rogers said.
He declined to say if Duke had any particular assets in its sights but said: “We are one of the largest companies with one of the strongest balance sheets in the industry.”
Rogers expects U.S. legislators and the new administration to push forward with plans for mandatory cuts in emissions through a scheme of cap-and-trade of the sort that already operates in Europe.
That will not mean companies have to start buying permits for carbon dioxide overnight but the United States is in on a clear path to such a system, he believes.
“If legislation gets passed in 2009, then the ‘ready’ period could be two to four or three to five years,” he said. “You’re looking in the teens to start, but that squares up well with the end of Kyoto.”
The first period of the Kyoto protocol, which set targets for cutting carbon emissions, expires in 2012. Governments from around the world will meet in Copenhagen at the end of this year to try an agree a deal to replace it.
For full coverage, blogs and TV from Davos go to www.reuters.com/davos
By Ben Hirschler
(Reporting by Ben Hirschler; Editing by Erica Billingham)