Energy Players See Raw Material-Free Sources as Top Growth Area for 2011-2012

January 6, 2011. Demand for renewable energy sources will continue to be high over the next two years; especially for the "˜greenest of the green’ energy sources. Experts say that raw material-free energy sources such as hydro, wind and solar will be especially favored over the next two years, driven by concerns over the cost of raw materials. Smart grids are another growth area, where aging distribution networks in places like China and the US mean that grid technology companies have a growing market for solutions to tackle the existing problems with network capacities and distributed generation.

Based on an Industry survey amongst 61 energy specialists in Europe and in Asia by M-Brain (formerly Global Intelligence Alliance) in November 2010, global demand for renewables is expected to grow by 10% to 20% while demand for fossil energy sources is projected to grow by less than 10%.

Anticipated Growth in Demand

The majority of the respondents (64%) expect growth opportunities to be found mainly in emerging markets such as China and India. The key driver for the increase in energy use in emerging markets is urbanization. About two thirds of the world’s energy is consumed in cities. Urbanization in the emerging markets opens new opportunities for renewable electricity, as long as existing grids are able to cope with changing feed-in potential of energy generated from solar panels and windmills for example.

Top 6 growth areas for energy suppliers (2011-012)
Raw material-free energy sources 61%
Biomass and waste to energy 56%
Smart grids 41%
Innovations in fossil fuels 34%
Biofuels for transportation 25%
Nuclear power 19%

% represents percentage of respondents
Source: M-Brain (formerly Global Intelligence Alliance), N = 61 industry experts

Tackling the challenges of raw-material costs with solar, wind and bio-waste sources increases the demand for intelligent power transmission technologies. The smart grid business, including grid automation and advanced metering infrastructures, is expected to grow as much 10% to 20% in 2011-2012.

There is hence an opportunity to improve the reliability and efficiency of existing grids as well as balancing demand and supply of power during peak periods.

Top 6 challenges for energy industry players(2011-012)
Changing local environmental laws and regulations 62%
Cost of raw materials 47%
Tariffs and purchase agreements for renewable energy 38%
Aging distribution networks 28%
Availability of certified/sustainable raw materials 25%
Outdated production operations 25%

% represents percentage of respondents
Source: M-Brain (formerly Global Intelligence Alliance), N = 61 industry experts

Never before has there been such a huge market potential for the energy industry in the midst of global changes in political mindset and decision-making at the same time. Capturing the opportunities available will mean that energy players will have to double up their efforts in understanding local energy business environments, in terms of changes in local regulations, feed-in tariffs and raw material prices.

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