World Power Markets
Table 2: Top 10 in Clean
power generation. The share of non-hydro renewables in total power output rises from 2.5% in 2007 to 8.6% in 2030, with wind seeing the biggest absolute increase. But an increase on an altogether bigger scale is required. The capital required to meet projected
Energy Investment (US$ bn) China
USA UK
$34.6 $18.6 $11.2
Rest of EU-27 $10.8 Spain Brazil
energy demand through to 2030 in the Reference Scenario is huge – US$26 trillion in total, or 1.4% of GDP per year on average. The power sector requires over 50% of this expenditure, with over half of all energy investment needed in the developing world. The Reference
Germany Canada Italy India
Scenario sees a continued rapid rise in energy-related CO2 emission through to 2030, with over 40 Gt generated in 2030 – an average rate of growth of 1.5% with non-OECD countries accounting for practically all this growth. Limiting this growth by extending the green economy at an accelerated pace – limiting the temperature rise to no more than 2°Celsius requires the low-carbon energy revolution so talked about by political leaders. Whilst energy efficiency offers the biggest scope for
cutting emissions in the short-term, the deployment and encouragement of new technologies and techniques must now take centre-stage as the world’s fossil-fuel addiction becomes ever more apparent. There is little doubt that the price of oil will again rise – and perhaps more quickly than many think – to levels (and above) which will make alternative energy investment highly attractive in the future. The cost of achieving the IEA’s 450 Scenario requires an increased investment of US$10.5 trillion in energy infrastructure than in the Reference Scenario ( with round US$ 1.7 trillion for power plant alone). Last year, and for the first time, China led the US and other
G-20 members in 2009 clean energy investments and finance, according to data released by The Pew Charitable Trusts.4
In
2009, China invested US$34.6 bn in the clean energy economy – nearly double the US total of US$18.6 bn. Over the last five years, the US also trailed five G-20 members (Turkey, Brazil, China, the UK, and Italy) in the rate of clean energy investment growth. An altogether different scale of investment is required by the US (and others – see Table 2 above). Nevertheless, demonstrating its staying power, the clean
energy sector outperformed the oil and gas industry last year, which had investment declines of 19% in 2009, according to the International Energy Agency’s World Energy Outlook. Installed renewable energy capacity increased in 2009 to
250 gigawatts (GW), enough to power an estimated 75 million households and equivalent to 6% of the worldwide total.
worldPower 2010
$10.4 $7.4 $4.3 $3.3 $2.6 $2.3
Excluding basic research and development, more than US$110 bn was invested in the G-20’s clean energy sector. Investment by virtually all G-20 countries has grown by more than 50% over the past five years.
In Too Deep? The ongoing saga of events in the Gulf of
Mexico has moved the political mood up a gear or two in North America. This bodes well for the clean-up operation that will be boardroom decision making in the world’s
energy majors. It is (hopefully) likely to also give a further fillip to cleantech industries. As Ms Christiana Figueres takes over as Executive Secretary of the UN’s climate change secretariat, it’s clear she has a mess of her own to clean up. In the aftermath of Copenhagen a lot has been said about the failure of the UN process. Even if unfair criticism, more clearly defined protocols are required for future events (see page 82). Still, the world has an agreement, in spirit if not in any detail. There is broad support for it – more than a 100 countries have associated themselves with the Accord. With the UNFCCC negotiating processes set to resume in Mexico and South Africa, much work needs to be concluded to avoid a repetition of COP-15. Rich countries have agreed, in theory, to give US$100 bn a year to poor countries from public and private sources, but without any agreement on how this will be managed. Financial assistance from rich to poor countries to help them cut GHGs and cope with the effects of climate change remains the bone of contention in the talks. Meanwhile, our attention falls to the raft of legislation (and
regulation) to be unleashed onto markets. In energy, whether it’s compliance, credit risk, counterparty risk management, hedging strategies, environmental compliance, IT systems development and configuration, or just general prospects for the power sector, WorldPower is dedicated to the discussion and the ramifications of change. ■
Guy Isherwood is Editor of WorldPower and Commodities Now magazine.
www.commodities-now.com/worldpower Footnotes:
1. Enerdata, June 2010.
www.enerdata.net 2. Power Deals: Mergers and acquisitions activity within the global electricity and gas market 2009 Annual Review. PricewaterhouseCoopers. 3. Nuclear Energy Technology Roadmap, International Energy Agency and the OECD Nuclear Energy Agency (NEA). 4. Who’s Winning the Clean Energy Race? – Growth, Competition and Opportunity in the World’s Largest Economies. The Pew Charitable Trusts, 2010.
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