According to Alex Klein, EER Research Director, the world awaits the specifics of the US stimulus package. But, in the meantime, significant long-term decisions concerning climate policy and renewable energy are made elsewhere from Europe to South Korea to Australia. As such, 2009 has been set up for continued clean and renewable power generation growth with several key trends evolving:
- While wind recalibrates to damaged financial markets and solar scales onwards from a small base backed by robust financial incentives, other renewables are positioned for growth, as supportive policies broaden to new markets. International utilities with renewables strategies will continue to broaden their technology involvement from wind and solar to ocean, biomass co-firing and geothermal to help bolster their position in attractive markets;
- The competition to lead carbon capture and sequestration (CCS) forward and keep coal as part of future generation build out is intensifying, and nuclear will continue its re-emergence;
- Weakened capital markets and low demand will continue to constrain new project investment in 2009. But the fundamentals for a significant transformation in energy infrastructure - and the corresponding investment opportunity - over the long term remain sound: carbon will become expensive to emit, energy security is an internationalising priority, national energy strategies are focusing, and the cost competitiveness of clean and renewable energy technologies is improving.
The case of solar
EER Research Director Reese Tisdale says the global solar industry remains in a very strong position moving forward, despite the economic woes bleeding through the global economy.
Having expanded development activities into scaling and emerging markets in the US and Europe, the industry has many more levers to pull for both near-term and long-term growth. Furthermore, expectations of global developers and manufacturers that the incoming US presidential and congressional appointees will stimulate the energy sector are extremely high. That being said, notable events of the fourth quarter are worth pointing out as stepping stones to near term US and European solar growth.
In the US, Los Angeles Department of Water and Power’s (LADWP) proposal to support and install 1.28 GW solar (photovoltaic and concentrated solar power) illustrates a continued movement by utilities and an increasing number of municipalities to build out solar programmes.
By employing a multifaceted strategy that includes a feed-in tariff, turnkey contracts, and power purchase agreements, LADWP is bolstering development across the solar spectrum. Also setting a trend is a group of emerging states and municipalities that are pushing for greater solar adoption. Albeit a slow process, these developments indicate a grassroots market arising.
Europe will continue driving the bus for the solar sector in the immediate future as evidenced by its head start in developing renewable overall, strong CSP and PV pipelines, particularly in Spain, and newly proposed incentive regimes in France. The start-up of Solar Millenium’s Andasol 1 and IPP Acciona Energia's 46 MW Amareleja plant in Portugal are mentioned as highlights by EER.