In its first quarter updates for renewable and clean energy, EER says that “despite difficult short-term market conditions, carbon and renewable policymaking remains a serious topic of Government debate globally, and is shaping longer term opportunities.”
EER highlights policies announced in the first quarter around the world such as the American Clean Energy and Investment Act, the introduction of feed-in-tariffs in South Africa, and the Russian power sector’s plans to tap into renewables.
Overall, EER is positive to the future of the cleantech sector, saying: “As the power generation landscape continues to transition, intensifying renewable and carbon policy continues to provide a long-term foundation and positive outlook for clean and renewable power generation investment. This will be re-enforced as signs of economic stabilisation slowly return.”
Wind hits bottom
According to EER, the global wind industry now finds itself nearing the trough of the current economic crisis. [See Vestas to scale back production facilities in Europe, ed.] Following the collapse of the Lehman Brothers, the wind industry is seeing CAPEX reductions, project postponements, order cancellations, and corporate downsizings on a scale “never seen before”.
EER projects annual MW additions to decline by 24% in the USA and 19% in Europe in 2009.
There is hope on the horizon, however, for those who make it out of the trough:
- The US stimulus package has created a foundation for a strong US market recovery, and over the longer term, new transmission geared toward tapping wind resources could have a substantial impact on post-financial crisis wind growth prospects in the USA. There is also a budding US offshore wind market;
- Europe is currently seeing consolidation trends, but despite cost challenges, European offshore wind is emerging as a key source of long-term growth controlled by utility partnerships;
- China, however, is emerging as a growth driver with a projected 59% increase in wind MW added in 2009. According to EER, wind turbine vendors are prioritising China as a key market to hedge risk in their order book, while emerging Asian markets continue to edge forward with policy and technology initiatives.
Downturn could have a silver lining
EER says it sees a silver lining for wind in the downturn as the energy market will restructure for more solid, long-term integration of wind into the power mix, resulting in a 16% compound annual growth rate from now through 2020, surpassing 600 GW installed.
Solar power rises above the crunch
Whereas wind is hitting a trough, solar power continues to rise in the 2009. EER says the first quarter closed with a “continued uptick in solar development activity in both the CSP [concentrating solar power] and PV [photovoltaic] technology segments.”
With 30% declines in solar costs globally and 1,123 MW of CSP currently under construction, EER says “solar is solidly at the front of a surging renewable sector.”
Part of the growth is lead by an increasing number of US utilities scaling their PV ownership activities to leverage stimulus funds. Looking ahead, the US PV market could see more experiences and well-financed component manufacturers and Europe-based developers enter the market.
Transitioning away from Spain, European PV developers are finding improved market environments in Italy, Greece and France where feed-in-tariffs and permitting processes have been revised.