Global Power & Energy Outlook – Key Trends & Investment Opportunities to 2020
 

Global Power & Energy Outlook – Key Trends & Investment Opportunities to 2020

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Presentation by Jonathan Robinson and Harald Thaler, Frost & Sullivan.

Presentation by Jonathan Robinson and Harald Thaler, Frost & Sullivan.

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Global Power & Energy Outlook – Key Trends & Investment Opportunities to 2020 Global Power & Energy Outlook – Key Trends & Investment Opportunities to 2020 Presentation Transcript

  • Global Power & Energy Outlook – Key Trends & Investment Opportunities to 2020 Jonathan Robinson, Senior Consultant Harald Thaler, Director Energy & Power April 7, 2011
  • Harald Thaler Functional Expertise • Over a decade of research and analysis expertise in the energy & power industry, including - Strategic market analysis with a strong analytical background - Lead analyst and advisor in numerous consulting assignments for the global energy industry - Managing research agenda for power generation research Industry Expertise Proven track record across a broad range of power and energy sectors, with particular strengths in: - Fossil-fired power generation (coal, gas, oil) - Power plant maintenance and repair services - Electricity demand and power generation capacity forecasts What I bring to the Team • Vast industry knowledge of the global power generation industry and its challenges and opportunities Harald Thaler • Global outlook and understanding of different business cultures, having lived and worked in several Industry Director countries of Europe and Asia Energy & Power • Fluent in German and Italian, working knowledge of Spanish, French and Thai. • Extensive network of connections accumulated over the past decade Frost & Sullivan Career Highlights Europe • Established long-term relationships with global industry players including Alstom, Ansaldo Energia , London, UK Siemens and Wood Group • Prior to joining Frost & Sullivan, worked as a freelance energy writer for publications such as Petroleum Economist, Reuters Business Insight and FT Energy • Energy markets analyst for Datamonitor Plc - produced numerous studies covering the power, gas and oil markets of Europe, Latin America and Asia Education • M.Sc. (Econ.) European Studies – London School of Economics and Political Science (LSE) • B.A. History and Politics – University of Kent at Canterbury (UK) 2
  • Jonathan Robinson Functional Expertise • 5 years of research & consulting experience, involvement in more than 40 projects. Particular expertise in: • Opportunity Assessment • Procurement Strategy • Supply Chain Management Strategy • Due Diligence for IPO/M&A activity Industry Expertise • Experience base covering broad range of energy sectors, leveraging long-standing working relationships with leading industry participants: • Renewables sector (wind, solar, tidal, hydro) • Conventional thermal energy (coal, gas) • Nuclear • Oil & Gas • Future energy (fuel cells, energy storage, smart energy)Jonathan RobinsonSenior Consultant What I bring to the Team • Extensive track-record of energy focused research and consulting projectsEnergy, Environment • Knowledge of, and relationships with, key stakeholders in the energy sectorPractice & Building • Strong analytical skillsTechnologies Practice Career Highlights • Before Frost & Sullivan, worked for a political consultancy in London and for the NSW State Government inLondon (UK) Australia. Education and Nationality • MBus, University of Sydney; BSc Politics & Law, University of Southampton, UK National. 3 View slide
  • Electricity Growth Trends 4 4 View slide
  • World Power Generation Fossil Fuel Dominance to 2020 and Beyond Share of Fossil–Based Electricity Generation by Share of Fossil–Based Electricity Generation by Region, 2010 Region, 2020 Carbon-Free Fossil Carbon-Free Fossil100% 100%90% 90% 32% 80% 33%80% 44% 52% 70% 61% 57%70% 65% 63% 63% 67% 66% 67% 76% 71% 77%60% 80% 82% 84% 60% 81% 84% 50% 93%50% 97%40% 40%30% 30%20% 20%10% 10% 0% 0% *Carbon-Free includes nuclear and all renewable energy sources. *Carbon-Free includes nuclear and all renewable energy sources. Source : International Energy Agency, Frost & Sullivan Source : International Energy Agency, Frost & Sullivan 5
  • World Power GenerationGrowth Trends by Power Generation Technology Electricity Generation Average Annual Growth Rates by Technology, 2010-2030 2010-20 2020-30 Coal Oil Gas Nuclear Hydro Wind Other renewables Total -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% Source: Frost & Sullivan Overall growth of 2.7% and 1.8% CAGR over next decades Gas, nuclear and hydro expanding at similar rates through 2020 High coal growth in this decade but then declining Wind growth tailing off post-2020 but other renewables maintain momentum 6
  • World Power GenerationGrowth in Electricity Generation by Region Regional Share Trends in Electricity Generation, 2010, 2020, 2030 2010 Other EU 15.8% Russia Traditional developed regions losing ground to 5.0% Middle East OECD Apac 6.3% 4.0% emerging markets 8.8% Africa ASEAN 3.0% Rapid urbanisation and creation of middle class 3.1% India and China driving growth but developed India 4.4% regions declining North America Fastest growth in India, ASEAN and China 25.0% China China expansion much more limited post-2020 19.2% Latin America 5.3% Anaemic increases in developed countries 2020 2030 EU Russia Other 4.4% Middle East EU Russia 13.1% Other 6.1% 11.7% 4.1% Middle East OECD Apac 4.1% 6.1% 4.6% Africa 7.7% Africa OECD Apac 3.2% 6.7% 3.3% ASEAN 3.6% ASEAN 4.7% North America India 19.1% 6.0% North America 21.1% India 7.7% Latin America Latin America 5.2% 5.1% China China 25.4% 26.8% Source : Frost & Sullivan, International Energy Agency 7
  • World Power GenerationFossil Fuel Dominance to 2020 and Beyond Share of Fossil–Based Electricity Generation by Share of Fossil–Based Electricity Generation by Region, 2010 Region, 2020 Carbon-Free Fossil Carbon-Free Fossil100% 100%90% 90% 32% 27%80% 80% 52% 46%70% 70% 61% 60% 62% 67% 58% 58% 67% 65% 66% 67% 70%60% 81% 80% 82% 84% 60% 77% 97% 91%50% 50%40% 40%30% 30%20% 20%10% 10% 0% 0% *Carbon-Free includes nuclear and all renewable energy sources. *Carbon-Free includes nuclear and all renewable energy sources. Source : International Energy Agency, Frost & Sullivan Source : International Energy Agency, Frost & Sullivan 8
  • World Power GenerationGas and Coal Regional Capacity Growth Net Gas-Fired Capacity Changes in GW, 2010-2030 Net Coal-Fired Capacity Changes in GW, 2010-2030 2010-20 2020-30 2010-20 2020-30 80 350 70 300 60 250 50 200 40 150 30 100 20 50 10 0 0 -50 -100 Source: Frost & Sullivan Gas capacity growing in most regions of the world but major growth in coal capacity limited to China as well as India and ASEAN Gas: growth declining dramatically in Middle East but accelerating in North America, China, India and ASEAN Gas driven by replacement need of ageing coal capacities in mature economies, diversification away from coal in emerging regions Also need for a more flexible generation system 9
  • Top 10 Trends for the Decade 10 10
  • Power Demand Growth 2010 2015 2020 Power Non-OECD countries Global electrificationDemand Low demand in West Surpass OECD reaches 80% Big expansion of China becomesGrowth offset by boom in Middle East electric/hybrid vehicles largest consumer Growth in Global Key Impact/Opportunities Electricity Demand, 2010-2030 1) Europe and North America - retrofit/refurbishment – 35000 limited capacity expansion 30000 2) China and India key markets (over 400 million people Electricity Generation (TWh) 25000 in India without electricity) – but limited direct 20000 opportunities for Western manufacturers - JV, licencing key ways of market exposure 15000 3) Low growth in Europe and North America – approx. 10000 1%. Industrial demand forecast to be stake – energy 5000 intensive industries heading to China 0 2010 2015 2020 2025 2030 4) Gradual adoption of electrical vehicles – developed economies first, developing economies soon after Source: International Energy Agency, Frost & Sullivan 11
  • Power Plant Decommissioning 2010 2015 2020 Closure of substantial coal-fired Gradual closure of nuclear-fired Power Plant capacity in Europe to comply with the power stations in Europe First of substantial wave ofDecommissioning Large Combustion Plant Directive and North America gas-fired plant closures Likely Decommissioning Key Impact/Opportunities In Selected Regions, 2010 - 2020 1) Obvious point decommissioning = need for 90 replacement plants 80 - Europe – gas likely to play a key role Capacity Decommissioned (GW) 70 - Baseload power needed 60 50 - Middle East – gas 40 - Africa – mixture 30 2) Potential revenues from remediation work to restore 20 sites/prepare sites for new development 10 - Nuclear €300 million per reactor 0 Europe Eastern Middle Africa - Opps for specialist waste companies/EPC players Europe & East Russia that could expand Source: Frost & Sullivan 12
  • Nuclear Power 2010 2015 2020 442 reactors in operation Global Safety Reviews Start of UK nuclear buildNuclear 480+ reactors Fukushima Accident Finalised construction of ITERPower operational 65 reactors under construction 2nd Wave of Gen III+ construction Number of Reactors Planned and Under Construction Key Impact/Opportunities 1) Focus on safety 2) Life extensions - up to 20 years = (€500 million) - new plant = €5 - €6 billion 3) New equipment orders = approximately 60 pressure vessels ordered in the next five years, despite Fukushima Source: PRIS, Frost & Sullivan 13
  • New Age for Natural Gas 2010 2015 2020 CCGT favourite generation technology Growth in globalNew Age for pipeline network Gas demand peaks in OECD butNatural Gas Massive boost in Shale gas boom in USA keeps growing elsewhere LNG availability Key Impact/Opportunities Global LNG Capacity Expansion 2008 - 2013 1) The growth in unconventional gas - has put a lid on global gas prices - creates opportunities for equipment suppliers, exploration companies, pipeline companies, project developers etc 2) Continuing growth in gas pipeline network – big projects in Europe – opportunities for raw materials suppliers (eg pipes) and OEMs (eg turbines, compressors) 3) Growth in LNG capacity - Qatar completed massive investments and further growth from Australia - more opportunities for equipment suppliers and developers 4) Low gas prices boost investments in gas-fired capacity – Middle East key but other markets growing in importance - also boost for cogeneration and onsite Source: OECD power 14
  • Clean Coal Commercialisation 2010 2015 2020 Clean Coal Carbon Capture and Storage Commercial CCS viabilityCommercial- Pilot Plants Ultra supercritical technology established and large-scale becomes prevalent globally development commences isation Cost Component Percentages of a Coal Key Impact/Opportunities Plant with CCS 1) Ultrasupercritical installations replace existing sub- 100% Storage, critical plants 9% 90% Transport, 2) Refurbishment and upgrading – creating opportunities 3% for suppliers of boiler-related equipment such as 80% Capture, economiser, reheaters and superheaters 18% 70% 3) Commercial viability of capture unproven but opportunities in demonstration projects 60% Power Plant, 4) Transportation – further opportunities for pipeline- 70% related companies 50% 5) Storage – mainly in depleted oil and gas fields and salt 40% aquifers Power Plant with CCS 6) Commercial operations only post-2020 Source: Frost & Sullivan 15
  • Market Liberalisation 2010 2015 2020 Market Most power generation markets Growing trans-regional Towards a global fully liberalised Focus on emergingLiberalisation power trading emissions trading system markets retail liberalisation European Priority Corridors for Electricity and Gas Key Impact/Opportunities 1) Liberalised markets demand flexible generating assets – boosts gas turbines and services market 2) Market liberalisation creates more diverse fuel mix 3) More regional power exchanges, greater trans- regional interconnections 4) Promotes more efficient operation of emissions trading schemes Source: EC DG Energy 16
  • Smart Energy 2010 2015 2020 Smart meters taking off Direct load control of Peak shaving through energy Smart meters reach in US and Europe smart appliances viaSmart Energy efficiency and promotion of most consumers in remote management embedded generation developed world Key Impact/Opportunities Global Smart Grid Revenue Forecasts, 2009-2017 1) Re-invigorated T&D - Substantial upgrades for existing infrastructure 60,000 - PMUs, sensors, cables 50,000Revenues ($ Million) - Enabling utilities to carry out preventive maintenance 40,000 2) ICT opportunities 30,000 - Substation automation – SCADA to IP based systems using switches and IEDs. 20,000 - Volume of data transmitted and stored – huge opps for 10,000 the traditional ICT players. Datacentre growth through need for storage. 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 3) Opportunities in the home - Creation of Home Area Networks (HANs), remote utility monitoring or customers given power though remote access - smart phones? Source: Frost & Sullivan - Need for appliances that are HAN ready 17
  • Energy Efficiency 2010 2015 2020 Green buildings become norm Global coverage for energy- Energy Global penetration of micro- in developed world efficient lightingEfficiency Grid investments lay foundations for renewables and micro-CHP supergrids and reduce T&D losses Conceptual Drawing of a Green Building Key Impact/Opportunities 1) Green buildings = reduction of emissions + efficient utilisation of resources. - opps for range of renewables/building technologies - mix of generation, but also monitoring - can be applied to existing housing stock as well to some new buildings 2) Large-scale deployment of compact fluorescent lights (CFLs) can help reduce peak electricity demand – efficiency 4 or 5 times above incandescent bulbs. Further improvements with OLED lighting 3) Increased investment in grid infrastructure will increase efficiency + will enable growth in DG micro generation – lower T&D losses + greater efficiencies through CHP growth Source: Frost & Sullivan 18
  • Energy Storage 2010 2015 2020 Energy storage market Grid-scale energy storage such asEnergy Improved existing battery technologies emerge reaches $50 billion pumped storage and CAES takes offStorage such as Li-ion, Nickel-Zinc, and Molten Salt Key Impact/Opportunities Forecast Growth of the Energy Storage Market 2009 2016 1) Advances in technology means that returns are becoming more attractive - Renewable off-peak being sold on-peak, asset utilisation, cost savings - Utility scale storage inevitable 2) New entrants to the market, businesses looking for theRevenues best storage locations, potential for storage rental as opposed to ownership – important to get in early to secure best opps 3) Alternative vehicle growth means boom for lithium-ion batteries 4) Rethink in strategies will lead to consolidation, alliances, pricing pressures – fast changing market 19
  • Continued Investment in Renewables 2010 2015 2020 Continued Strong renewable growth Renewables achieve Commercialisation of in developed economies, Private equity investors European countriesInvestment in re-focus back on grid parity in some Energy Storage backed by subsidies encourage investment Renewables renewable projects European markets technologies drives growth and regulation to reach 2020 EU targets Growth in Wind and Other Renewables – 2010, 2020, 2030 Key Impact/Opportunities 45% 2010-20 2020-30 1) Massive potential in a number of geographies 40% 35% - Concentrated solar highest growth, but wind most important in MW capacity 30% 25% - Feed in tariffs/clear regulation vital 20% - Consistency very import – investors need 15% confidence that an investment can pay off 10% 2) Renewables a key factor driving T&D investment to 5% connect new capacity to where it is needed. 0% - Creation of supergrid in Northern Europe, others e al o V SP d te dr in in m P as ar W C Hy er planned in North America and China ar W M th ol & eo S s G as om Bi Source: IEA, Frost & Sullivan 20
  • Next Steps Request a proposal for Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. (enquiries@frost.com) Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth occurring in London on 17 – 18 May 2011. (www.gil-global.com) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 21
  • Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by rating this presentation Frost & Sullivan’s Growth Consulting can assist with your growth strategies 22
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  • For Additional InformationChiara CarellaCorporate Communications Director Juliet ShawEurope Sales Director+44 (0) 207 343 8314 +44 (0) 207 343 8363chiara.carella@frost.com juliet.shaw@frost.comHarald Thaler Jonathan RobinsonDirector Senior ConsultantEnergy & Power +44 (0) 207 343 8314+44 (0)20 7343 8325 jonathan.robinson@frost.comharald.thaler@frost.com 24