Investment in Renewable Energies to Tripple this Decade

The current market for renewable energy has less to do with short-term fluctuations in the price of oil, and more with the longer term acceptance of a changing energy future, according to a British consulting firm.

ABERDEEN, Scotland – “High oil prices are no longer the sole driver of developments in renewable energy technologies,” say Will Rowley and John Westwood of the firm, Douglas-Westwood, in their keynote paper to the ‘Creating an All-Energy Future’ conference in Scotland. “Hydrocarbons will continue to dominate the energy markets over the next decade but renewable energy has now moved into the commercial arena as an important element of the energy product mix.” Companies such as BP, Enron and Shell see renewable energy as an integral part of their future portfolio, and the authors predict that the annual investment in renewable energy technologies will grow from $8.4 billion in 2000 to $23.8 billion in 2010. “Whilst all the major renewable energy sources are forecast to grow with double digit annualised rates, solar, wind and biomass technologies are likely to represent over 95 percent of capital investment,” they say. The paper examines the potential for offshore wind energy, of which almost half of the 330 TWh global resource is located in Europe. They estimate that 80 percent of installations this decade will be in European waters, representing an investment of more than $1.4 billion. “But the prospects could be much greater,” they add. “Our forecast for total onshore wind power capex over the next decade is $70 billion. If only a small proportion of this was moved offshore, the impact could be considerable. The offshore industry contractors have the technical capability what is now required is a political initiative.” Other speakers included Tom Thorpe of AEA Technology, who examined the British market for marine renewables, Ray Hunter of Renewable Energy Systems on wind energy, Rob Forrest of the Scottish Renewables Forum on the renewables supply chain, and David Still of AMEC Border Wind on the Blyth wind facility. “Renewable energy technologies are undergoing a transformation in the current market place,” they explain. “Major commercial developments spurred on by the oil crisis of the 1970’s helped to create the $8.4 billion market for renewables technology we have today. ” “Without exception across the renewable energy sector, we forecast double digit annualised growth rates over the next ten years, in comparison with oil usage growth at 1.1 percent, natural gas at 1.8 percent and total energy use of 1.2 percent per annum,” they add. Annual growth rates will be as high as 34 percent for solar, 21 percent for PV, 55 percent for wind, 1 percent for geothermal, 20 percent for biomass, 6 percent for small hydro, and 0.5 percent for wave and tidal. “One of the diversification options is offshore renewable energy and this will offer some considerable opportunities for some companies,” they say. Britain’s offshore oil and gas industry could attract as much as $40 billion of investment over the next decade, while the total European offshore wind industry could reach $1.6 billion. “Today’s renewable energies market is inextricably connected with the longer-term reality and acceptance of a changing energy future,” they conclude. “High oil prices are no longer the sole driver of developments in renewable energy technologies. Hydrocarbons will continue to dominate the energy markets over the next decade but renewable energy has now moved into the commercial arena as an important element of the energy product mix.”

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