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Renewables to represent 30% of US total installed capacity by 2030

 960 640 Stuart O'Brien
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The contribution of renewable power to total installed capacity in the US is expected to double from 15% in 2018 to 30% by 2030, reaching a total of 442.8 gigawatt (GW).

According to the latest numbers from GlobalData, that’s equivalent to a compound annual growth rate (CAGR) of 7.3%, attributed to more states adopting and updating renewable energy policies, as well as imposed emission taxes increasing the cost of fossil fuel power generation.

Energy utilities in the US are also in favour of switching to renewable power as they must comply with the state renewable energy targets. 

GlobalData’s latest report, ‘US Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations and Competitive Landscape’, reveals that the share of coal-based capacity will decline from 27.2% in 2018 to 13.5% in 2030 as it is replaced by renewable energy, storage projects and stable gas-based generation in the near future. 

Arkapal Sil, Power Industry Analyst at GlobalData, said: “During 2019-2030, offshore wind capacity is set to see the largest growth rate among renewables reaching 11.7GW from 60 megawatt (MW) at a 62% CAGR, while solar photovoltaic (PV) capacity is expected to reach 220GW from 75.3GW, growing at a 10% CAGR.”

The onshore wind segment, which registered a growth of 22% CAGR during 2000-2018 (reaching 96.3GW), will witness a steady growth of 5% CAGR over the forecast period to reach 185.5GW in 2030 and account for 12% of overall generation mix compared to 8% in 2018. 

Sil added: “Biopower, geothermal and solar thermal segments are expected to jointly grow at an average of 3% CAGR over the forecast period. Increased renewable capacity addition will open up new markets for wind turbines, modules for solar plants and associated equipment required for transmitting the generated power to the grid.”

Renewable capacity expansion will necessitate grid modernization in order to manage a high volume of renewable energy with inherent variability. This, in-turn, will involve huge investment in grid infrastructure and open up new markets for energy storage systems to enable a steady supply of power when adequate renewable energy is unavailable. GlobalData estimates that the battery storage market in the US is expected to reach around $5bn in 2030. 

Sil concluded: “The increased cost of nuclear power due to higher safety standards will result in a slight decline in the nuclear capacity during the forecast period. As a result, gas-based power will dominate the generation mix, accounting for 41% of installed capacity, and catering to the country’s base-load power requirement in 2030.”

CENTRICA REPORT: Why sustainability is good for business

 960 640 Guest Post
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Sustainable businesses see energy as an opportunity, not a financial burden. They’re exploiting distributed energy technologies, such as onsite generation and storage, to cut costs and carbon emissions.

This also increases operational resilience and enhances reputation.  

Download Centrica’s research report to see the 4 steps you can take to accelerate your energy sustainability and improve your business performance.

Energy M&A activity hit $158bn in 2018

 960 640 Stuart O'Brien
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Transaction volumes within the global power mergers and acquisitions (M&A) market remained strong through 2018, reaching US$158bn, the second highest in the last five years.

Deals registered in 2018 decreased slightly, from 651 to 622 in 2018.

The statistics, researched by leading data and analytics company GlobalData, found that out of the 622 transactions reported in 2018, 597 were acquisitions while the remaining 25 were mergers.

As of 2019 year-to-date (YTD), 244 M&A deals were witnessed. The largest announced M&A deal in the power industry in 2018 was the acquisition of Innogy by E.ON for US$52.9bn.

The report, ‘M&A in Power – Thematic Research’, also revealed that the solar energy segment registered the highest number of M&As during the period 2015–2019 YTD with 661 M&A deals, followed by T&D, wind, fossil fuels and hydropower segments, with 654, 461, 305 and 214 M&A deals, respectively.

The report highlights that over the past few years, the power industry has seen a transition towards sustainable clean energy. Power utility companies in mature markets are now witnessing a wave of consolidations, looking to create scale due to the shift towards renewable energy sources, which is pushing them to alter their business models.

The consolidation through acquisitions is driven mainly by few companies’ incapability to attain that organically and the acknowledgment that companies require collaboration or cooperation for this transition to occur.  

Sneha Susan Elias, Senior Power Analyst at GlobalData, said: “Power and utility companies are focusing on crucial climate goals and measures in the form of clean energy growth and enhanced natural gas-fired generation to deal with the intermittency issues, safety and security of energy supply, phase-out of coal-fired power plants and nuclear decommissioning. M&A deals involving renewable energy are expected to rise in future due to power and utility companies’ transition towards sustainable clean energy.

“Over the coming two to three years, M&A activity in the power industry is likely to remain strong, backed by a global urge to move away from thermal power towards renewables, although the former will remain relevant.”

Image by rawpixel from Pixabay

Renewable energy now employs 11m people globally

 960 640 Stuart O'Brien
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Eleven million people were employed in renewable energy in 2018, compared with 10.3 million in 2017, according the International Renewable Energy Agency (IRENA).

The organisation says that until now, renewable energy industries have remained relatively concentrated in a handful of major markets, such as China, the United States and the European Union.

However, East and Southeast Asian countries have emerged alongside China as key exporters of solar photovoltaic (PV) panels. Countries including Malaysia, Thailand and Viet Nam were responsible for a greater share of growth in renewables jobs last year, which allowed Asia to maintain a 60 per cent share of renewable energy jobs worldwide.

“Beyond climate goals, governments are prioritising renewables as a driver of low-carbon economic growth in recognition of the numerous employment opportunities created by the transition to renewables,” said Francesco La Camera, Director-General of IRENA. 

“Renewables deliver on all main pillars of sustainable development – environmental, economic and social. As the global energy transformation gains momentum, this employment dimension reinforces the social aspect of sustainable development and provides yet another reason for countries to commit to renewables.”

Solar photovoltaic (PV) and wind remain the most dynamic of all renewable energy industries. Accounting for one-third of the total renewable energy workflow, solar PV retains the top spot in 2018, ahead of liquid biofuels, hydropower, and wind power.

Geographically, Asia hosts over three million PV jobs, nearly nine-tenths of the global total.

Most of the wind industry’s activity still occurs on land and is responsible for the bulk of the sector’s 1.2 million jobs. China alone accounts for 44 per cent of global wind employment, followed by Germany and the United States. Offshore wind could be an especially attractive option for leveraging domestic capacity and exploiting synergies with the oil and gas industry.

The solar PV industry retains the top spot, with a third of the total renewable energy workforce. In 2018, PV employment expanded in India, Southeast Asia and Brazil, while China, the United States, Japan and the European Union lost jobs.

Rising output pushed biofuel jobs up 6% to 2.1 million. Brazil, Colombia, and Southeast Asia have labour-intensive supply chains where informal work is prominent, whereas operations in the United States and the European Union are far more mechanised.

Employment in wind power supports 1.2 million jobs. Onshore projects predominate, but the offshore segment is gaining traction and could build on expertise and infrastructure in the offshore oil and gas sector.

Hydropowerhas the largest installed capacity of all renewables but is now expanding slowly. The sector employs 2.1 million people directly, three quarters of whom are in operations and maintenance.

IRENA’s Renewable Energy and Jobs Annual Review can be downloaded here:  

https://www.irena.org/publications/2019/Jun/Renewable-Energy-and-Jobs-Annual-Review-2019

Image by Oimheidi from Pixabay

The energy storage market ‘paving the way for next energy revolution’

 960 640 Stuart O'Brien
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The energy storage market has caught the eye of a number of stakeholders involved in the power industry, leading to its considerable growth and opening the way for the next energy revolution.

So says GlobalData’s latest thematic report, Thematic Research: Energy Storage, which highlights the present scenario and emerging market trends across electrochemical, mechanical and thermal energy storage.

The report says demand for energy storage system (ESS) devices in the power sector is increasing rapidly, particularly after the increase in the renewable energy integration into the grids. Intermittent power supply led to demand for the storage of electrical energy and supply during peak load periods. ESS devices can help make renewable energy – whose power output cannot be controlled by grid operators – smooth and dispatchable.

With the global energy storage market becoming one of the rapidly growing segments within the renewable power mix, GlobalData says equipment manufacturers or technology providers of energy storage technologies are focused on innovating their energy storage solutions and offering advanced energy storage systems.

Sneha Susan Elias, Senior Analyst of Power at GlobalData, said: “Battery energy storage system (BESS) is regarded as a crucial solution for overcoming the intermittency limitations of renewable energy sources (RES). The battery energy storage market reported cumulative deployment of 4.9 GW at the end of 2018 and is expected to reach 22.2 GW in 2023, with the US accounting for 24.7% of the global capacity. The deployment is expected to grow, due to a large number of countries opting for storage utilization to support their power sector transformation.

“The expansion in battery manufacturing capacity and falling costs resulting from the electric vehicle (EV) industry are driving growth in energy storage services and new markets. This fall in battery prices has favored the battery energy storage market and has speeded the deployment of energy storage projects globally.

“Currently, lithium-ion (Li-ion) batteries dominate the electrochemical energy storage market but other battery energy storage technologies such as sodium-sulfur (NaS), lead-acid and flow batteries are now getting deployed. While, thermal energy storage utilizing molten salt is among the most widely used technology in association with concentrated solar power (CSP) projects, among mechanical energy storage technologies, pumped hydroelectric storage systems is among the most mature energy storage technologies and offers a number of benefits such as energy-balancing, stability, storage capacity, along with ancillary grid services which include network frequency control and reserves.”

Image by Bert Braet from Pixabay

Data casts doubt on EU Emissions Trading System

 960 640 Stuart O'Brien
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The price of EUAs, the tradeable unit under the EU Emissions Trading Scheme (ETS), jumped from €7.00/tCO2e in 2018 to an 11-year high of €27.46/tCO2e at the beginning of April this year.

During the last year, emissions under the carbon trading scheme in Europe fell by 3.5%.

A new report, the ICIS Market Insight: The Impact of Higher Carbon Prices on Utilities and Industries, suggests that the increased carbon price had only a marginal effect on reducing emissions in 2018.

The downward trend in emissions was driven by the power sector, specifically increased renewable generation replacing fossil fuel generation.

The Market Stability Reserve (MSR) is the key reform of the EU ETS and ICIS expects this mechanism will reduce auction volumes by roughly 1.70bn EUAs during 2019-2025, tightening the system and pushing companies to reduce carbon emissions.

Governmental policy and regulation will form part of these reductions, but carbon prices will be the lever that controls the speed at which new investments will take place.

The ICIS Market Insight report states that a high carbon price could accelerate the use of lower carbon technologies and the coal-to-gas switch.

The ICIS Market Insight: The Impact of Higher Carbon Prices on Utilities and Industries is available here.

“We expect some lag in the adoption of new technologies by industry as they continue to receive a greater part of the allowances for free, in order to shield them from the carbon leakage risk. But more stringent benchmarks and higher prices should provide the catalyst toward long-term investment in cleaner production technologies and energy efficiency,” said Phillip Ruf and Matteo Mazzoni, joint authors of the ICIS European carbon market analysis.

“With triggering higher carbon prices, this new framework will, in fact, also result in higher revenues from national auctions, thereby providing the possibility for government to subsidise investments in the different sectors by re-investing the achieved revenues.”

APAC shifting towards renewable energy auctions

 960 640 Stuart O'Brien
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Asia Pacific (APAC) countries are adopting several strategies and roadmaps to achieve the renewable energy targets designated by their governments.

Countries such as India, Kazakhstan, Indonesia, Pakistan and Taiwan have implemented auctions to drive their renewable energy market, according to GlobalData. 

The company’s latest report ‘Asia Pacific Renewable Energy Policy Handbook 2019’ reveals that regulatory framework and policies of the APAC countries are aiming to achieve a strong growth in the renewable energy market.

Piyali Das, Power Analyst at GlobalData, said: “Auctions are the major mechanism in APAC driving the renewable energy sources in most of the key countries, with India being the most prominent in implementing auction plans to award 80 gigawatts (GW) of solar and 28 GW of wind projects between 2018 and 2020.”

Feed in tariffs (FiTs) play a role in enhancing the renewable energy market in APAC. In countries such as Australia and India, FiTs to renewable projects is a provincial or state subject.

Pakistan has been providing FiTs in renewable sources such as solar, wind and small hydro since 2015. Taiwan provides FiT for renewable systems and is subject to annual revision.

Piyali concluded: “The regulatory framework and policy structure, supporting renewable energy resources in various APAC countries, has led to significant development in the renewable energy market. China, India, Japan are some of the leading nations in renewable energy growth trajectories. In the wake of growing energy security and environmental concerns, most APAC countries are expected to strengthen their renewable energy mechanisms, which will help the Asia Pacific renewable energy industry to maintain growth in the coming years.”

Global battery energy storage market to grow to $13.13bn

 960 640 Stuart O'Brien
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The global battery energy storage market will grow to $13.13bn by 2023, with Asia-Pacific (APAC) and EMEA the dominant markets.

The report from GlobalData reveals that a fall in technology prices and increasing pace of development in the power market are the primary driving factors for the growth.

APAC will continue to be the largest market reaching $6.05bn in 2023, as countries are increasing investments for improving their grid infrastructure and improving the market structure to attract foreign investments. With respect to technology, Lithium-ion is and will continue to be, the preferred technology for market deployment.

Bhavana Sri, Power Analyst forGlobalData, said: “The US has been the largest market for Battery Energy Storage System (BESS) both in terms of cumulative installed capacity and by market value for projects installed up to 2018 and is likely to continue to lead the market at the country level. The US market for battery energy storage is estimated to reach $2.96bn in 2023, accounting for 23% of the global market.”

Asia-Pacific was the largest market for battery energy storage systems and it accounted for 45% of the global market installed capacity in 2018 and the region is also expected to maintain its top position in the forecast period.

With the number of grid-connected renewable electricity generation plants increasing tremendously, countries such as China, India, Japan, South Korea, and the Philippines will focus on frequency regulation in the electric grid to normalise the variation in power generation from renewables.

The EMEA battery energy storage market registered a market value of approximately $1.73bn in 2018 and it accounted for 26% of the global market. The region has strong demand for flexibility, due to technological advancements, evolving market conditions, strong research facilities, and supportive policies. Middle East and Africa are small markets with demand for storage expected to increase once renewable power generation gains significant traction in the market.

The Americas battery energy storage market registered a market value of approximately $1.97bn in 2018 and it accounted for 28% in 2018. The battery energy storage market in the region is growing, with countries such as the US, Chile, Canada and Brazil promoting battery storage installations across consumer segments. Some US states have robust incentive programs, most notably California, which adopted an ambitious target for 1.3GW of energy storage by 2020, which it surpassed and a new target is awaiting approval.

Bhavana Sri concluded: “With countries aggressively promoting the modernisation of grids, and developing their capability to handle the demands of the present and future, batteries are being deployed to support smart grids, integrate renewables, create responsive electricity markets, provide ancillary services, and enhance both system resilience and energy self-sufficiency.“Market conditions are improving and more companies are moving into a decentralised generation, leading to an increase in the onsite deployment of renewables and batteries; as in with micro or mini girds. Supportive policies and high electricity charges are also nudging the market towards renewables and/or storage plus renewables at the end consumer level. As the power sector evolves to accommodate new technologies and adapt to varying market trends, energy storage will play a central role in the transition and transformation of the power sector.”

Building Energy Management Systems (BEMS) market to hit $8.7bn

 960 640 Stuart O'Brien
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The global BEMS market will reach $8,713.4 million by 2025, growing at a 12% CAGR, according to new research.

Data from ResearchandMarkets asserts that BEMS is a globally evolving market that is poised for double-digit growth for the next 7 years, primarily driven by the trend of high peak demand charges, customers’ commitment towards sustainability, energy efficiency regulations, state incentives for buildings to install energy management systems, the increasing energy efficiency contracts market, and increasing customer know-how about BEMS.

The research outfit says technologies that take the home and building technologies industry to the next phase of evolution – such as artificial intelligence, increasing Internet of Things (IoT)-enabled devices, data analytics, edge analytics, cloud solutions, and business model innovation – have also had a positive impact on the BEMS market.

In addition, new BEMS entrants and emerging participants will change the market dynamics by adopting cutting-edge technologies into their products and by adopting customer-centric business models.

Energy management systems market hit $25.9bn in 2018

 960 640 Stuart O'Brien
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The global energy management systems market was valued at $25.88 billion last year and is expected to register a CAGR of 13.78% by 2024.

The figures, from ResearchandMarkets, pinpoint an increasing focus on managing energy consumption, optimizing the use of renewable energy sources, reducing the carbon footprint and greenhouse gas emissions as the main drivers of EMS growth.

Meanwhile, the increasing usage of smart grid services, growing competition among industrial enterprises, cost efficiency increasing the demand from emerging economies and government policies and incentives are some of the secondary factors augmenting the growth of the market.

The report says rapid advancements in technology have led to greater insights into energy procurement and energy usage globally and help in gaining competitive advantage, and increase productivity at a reduced energy cost.

However, lack of skilled personnel, lack of awareness among stakeholders, lack of finance and non-standardized guidelines have served as a key impediment hindering the growth of the market.

Power and Energy to take biggest slice

Research andMarkets says demand for electricity in the non-residential sector has been rising over the last few years owing to new entrants in the manufacturing industry, increasing production activity from various industries including chemical, electronics, and automotive, which is expected to fuel the market.

Increasing power generation through the renewable source of energy is expected to witness exponential growth owing to the growing awareness regarding the environmental impact of fossil fuels, further propelling the growth of the market.

United States to account for majority of market

The energy management systems market in the United States looms large as residential, commercial and industrial consumers continue to drive adoption in order to realize energy savings.

The US is currently ranked as the second largest consumer of electricity after China. Several key federal policy directives, rising energy costs, stringent regulations concerning greenhouse gas emissions, and growing awareness about the benefits of automation, are major factors driving the market in the United States.

Furthermore, the presence of major energy management system companies like Siemens, coupled with the evolution of new concepts and major technological contributions, are further fuelling the demand for these solutions in North America.