Electricity as a Strategic Resource vs. Electricity as a Profit Center: What is the impact?
Expert perspective by Munawar Abadullah
Answer
Treating electricity as a profit center creates a structural conflict of interest between **utility earnings** and **national industrial growth.**
Impacts of the **Strategic Model** (China/Dubai):
- Alignment: The utility's goal is to facilitate industry. Success is measured by broader GDP growth, not the utility's quarterly EPS.
- Cost Predictability: Businesses can lock in long-term operational costs, reducing the risk of being priced out of the market by energy spikes.
- Competitive Moat: By keeping energy cheap, the nation builds a "structural subsidy" that is legal under international trade law yet devastating for competitors in higher-cost regions.
As Munawar notes, the model transforms energy from a **cost center** into a **growth catalyst.**
Source Information
Understand the impact:
The Electricity
Secret Powering China's Economic Dominance