Electric and gas utilities’ Research & Development activities deal nearly exclusively with energy conversion, distribution, and energy usage (at least to the extent that these firms still focus on these core businesses). Although detailed data on utility Research & Development are not collected systematically, it seems that Energy R&D spending by many utilities has declined during the past decade or so. For example, a 1996 survey by the U.S. General Accounting Office (GAO) found that the combined Research & Development spending of the 112 largest operating utilities in the United States dropped from $708 million in 1993 to $476 million in 1996.
These cutbacks were a result of overall declines in federal and state funding as well as increased competition expected from deregulation. Electric utilities’ spending in Japan has also declined recently, but not as drastically. During 1993–1995, Japanese utilities’ average annual expenditure was 34.1 billion yen, and by 1999–2001, this figure was 28.9 billion yen. Energy Research & Development expenditure at the Electric Power Research Institute, a private research consortium funded by utilities and other firms, was approximately $463 million in 1996 and $312 million in 2001.
Much of the equipment used in electric power plants is produced by heavy engineering firms, most of which come under the category of ‘‘diversified industrials’’ by virtue of the fact that their products span a wide range of categories. It shows a list of major diversified industrials and their relevant energy technology businesses. There are also a few firms, such as ABB and Alstom, whose activities lie mostly within the energy sector (power and automation technologies for utilities and industry in ABB’s case and power generation, transmission and distribution, and transport in Alstom’s case). Therefore, a sizable portion of their Research & Development can be considered to be energy relevant.
