UPC Renewables believes that renewable energy
will be one of the most dynamic growth industries
of the 21st century. The rising price of oil and
depletion of hydrocarbon resources, international
consensus on the urgent need to tackle climate
change, population growth, geopolitical instability
and the recognition of the need for security of
energy supply are all long-term trends which will
underpin the sustained growth of renewables. The
fundamental importance of these key factors will
ensure that the sector is not merely a ‘trendy’ investment
but a long-term phenomenon which will only be reinforced
over time.
International policy makers are reaching a consensus
that there is no single panacea for solving the
world’s energy problems. Nuclear energy,
renewables, cleaner fossil fuel technologies and
energy efficiency initiatives will all have a part
to play in the global solution. In this context,
the relatively low penetration of renewable energy
currently in the global supply mix (wind and
solar energy currently account for only 0.82% and
0.1%
respectively of the world’s electricity production),
together with rapidly decreasing costs as more
investment is channeled into the sector make for
a compelling growth story.
The Global
Wind Energy Council, a non-profit
global association of wind energy participants,
estimates that the
world would be capable of producing as much as
12% of its power needs from wind energy. European
leaders have recently pledged their commitment
to produce 20% of total energy from renewable
sources by 2020, from about 6% today, with wind
power playing
the leading role.
Wind energy is the most mature of the renewable
energy technologies and is the business on which
UPC Renewables is principally focused. Even with
oil prices significantly below current levels,
wind energy can compete effectively with fossil
fuel generation on a good wind resource site. The
amount of new capacity installed worldwide in 2006
was:
- 15,016MW, a year - on year increase of 30%,
- increasing global wind energy capacity to 74,306MW,
- capable of generating on average an annual
output of 152 billion kWh,
- and comprising around 94,000 wind turbine
generators (“WTG’s”) in 36 countries.
Notwithstanding a tight supply market
for WTG’s,
the forecast average annual
growth rate for the period
2007-2011
is 17.4% p.a., resulting
in a
more than doubling of currently
installed capacity. (Source: BTM Consult ApS). This profile is illustrated below:
Projected Growth of Wind Power 2006-2011
Following the pattern set by wind energy, technological
advances in the solar sector are underpinning significant
reductions in the cost of solar generation and
exponential growth in its deployment. While still
heavily reliant on government subsidies, a continuation
of current trends will see solar energy becoming
increasingly competitive with conventional generation.
Governments in Europe and the US have given the
industry a vote of confidence with the extension
of generous feed-in tariffs, grants and tax incentives.
The global solar market is worth about $19 billion
per annum and has been growing at a 30% annual
growth rate over the past five years. As illustrated
below, installations increased to 1,744 MW in 2006
with annual growth
averaging a compound rate of
42% since 2002. Cumulative global PV installations
reached just below 7 GW, representing ten-fold
growth in the last nine years.
Annual Photovoltaic Market Installations 1990-2006
|
