The Renewable Energy Market Is Starting To Be Ruled By Emerging Companies

Investment on Renewable Energies at stake.

For the first time in eight years, indicators inform that the investment in renewable energies is at stake. Nevertheless, Ernst & Young says that this is not all bad news because there are currently emerging markets showing a strong growth especially in the regions of MENA and South Africa as well.

Romania, for example, with only 5MW of cumulative capacity is considered by the IHS and Ernest & Young as an emerging market.

The clean-tech leader from Ernest & Young, Gil Forer said that the transition to a low-carbon and more resource-efficient economy is in fact, something inevitable. He adds that although the perspectives point out to the first fall in this market in 2012, the first fall in eight years. The value achieved in 2011 (US$237 billion) will fall. Gil Forer, states that the news shouldn’t be taken has completely negative news.

It appears that Forer has a substantial reason to say what he said. The Ernest & Young’s energy and environmental finance leader, Ben Warren, mentions, the prices were dropped but the overall capacity is actually increasing day after day, and emerging markets are currently booming, which increases emerging market’s activity. Forer explains that emerging companies are focusing their efforts and resources in increasing and investing in renewable energies, unlike fully-established corporations that are worried about the risks, energy prices, pressure from stakeholders, energy security, etc…

Emergent Markets

In Ernest’s & Young most recent indices on the renewable energy attractiveness by country, they rated about to 40 different countries on the attractiveness of their green-energy markets, level of sustainability for individual technological improvements and energy infrastructure as well. According to the predictions that happened on 2010-2011, it was mentioned that emerging markets would rule the green-energy roost; which is now being confirmed.

Ernest & Young points out to a particular note. There are two countries that were added for the first time, they are Saudi Arabia, at number 27 (concerning the attractiveness indices) and the United Arab Emirates at number 35, but they are not featured in the solar indices.

Both of the previously mentioned countries revealed some of their plans concerning solar energy. In the United Arab Emirates, Masdar told that they will start commercial operations in order to complete its solar power plant in Abu Dhabi, the plant is 100 MW Shams 1 CSP, they want to finish the plant by the end of the year, they also stated that they want to finalize their 100 MW PV plant, Noor 1. The Saudi Arabian government also informed that they have plans to install a 41 GW solar power plant during 2012.

Over the next five years, not only the United Arab Emirates and Saudi Arabia, but also Egypt, Qatar and Jordan, have been seen as the most attractive markets in the MENA region.

As a matter of fact, the government is not providing the necessary help in order to support these kinds of projects, thus making the lack of support from the governments of those regions one of the biggest barriers to the concretization of those projects. Ernest & Young says that apart from that, those regions possess the required energy infrastructure and strong financial markets as well. Ernest & Young also stated that if those companies want to see their project come to life, they will have to seek investment from private investors, instead of waiting for the support of their government to make their projects grow.

bigsolarpanelsBoth Ernest & Young and HIS rated South Africa as an important emerging market, as a result of the Renewable Energy Independent Power Producer Program that South Africa launched. As a result, South Africa managed to have positive rates both in the solar energy index, with a rank of 19; and both in the renewable energy index, rated by 17. Just like South Africa, Romania managed to be rated by Ernest & Young and the HIS as a very important emerging market. Romania managed to be rated that way thanks to its regulatory environment and weak investment in the other sectors. But, there is not all good news, concerning solar energy; it is much to evolve, because Romania’s cumulative capacity is merely at 5 MW, a very low value. Romania was placed in 24th place in the solar energy index and in the 13th place in the renewable energy index. It is believed that Romania can speed up the development process, thanks to attractive measures like the 6 green certificates / every MW, the improved development process and shorter construction time, it all will contribute to boost the process up.

The Renewable Energy Market Is Starting To Be Ruled By Emerging Companies

The United Stated slipped to the third place concerning the renewable energy index from Ernest & Young, but it continues to be in the leadership. Germany managed to appear second in the renewable energy index and fourth in the solar energy index. China improved, but it is only in the third place concerning the solar indices.

Japan managed to achieve the eighth rank in the renewable energy index and fifth rank in the solar energy index, as a result of the great change in its energy policy. The Bloomberg New Energy Finance says that there are 900 MW of solar projects to be launched and the good news is that 350 MW of those 900 MW are already being constructed.

The company says that during the next ten years, countries like the United Arab Emirates, Morocco, Thailand, Jordan, Chile and Pakistan are most likely to rearrange their renewable energy strategies in order to provide a better focus on the renewable energy and then create more jobs, capacity to increase the nation’s competitiveness.

Ernest & Young says that in the South American market, the grid parity will be a determinant factor in the future of the PV market. Nevertheless, a more increased solar irradiation and lower costs are starting to open new doors to the different regions. Plus, there is actually a very strong energy demand, what forces the various markets and companies to focus on the renewable energies. In the recent months, Chile and Brazil registered a slight increase in their solar market activities.

Five years ago, Spain managed to rule the roost concerning the renewable energy index, but it didn’t take long for Spain to fall in the rankings, due to the measures the government took: the additional 7% tax in the field of energy and also the temporary suspension of the tariffs for renewable energy. However, Spain did manage to be on the 9th place concerning the solar energy index.

Although grid parity may be the key to help the Spanish solar market develop, but Gehrlicher Solar and other similar companies are actually planning to install solar power plants without the help of subsidies.

Challenges and Demands

Ernst & Young predicts that in the next ten years the consumption of energy at a worldwide scale at 3 percent, this will happen because of the demands of emerging markets. And these emerging markets will have a very strong impact in the following phases for the development of clean energy on a global scale.
Looking at 2013, the company predicts a really challenging year. Of course the companies will be trying to decrease the amount of oversupply in the green-energy market. Plus, governments from all over the world will be trying to reduce the subsidy dependence.

The two indexes (solar and renewable indexes) provide information for all of the forty countries.

Solar energy index, top 10 featured are: United Stated, Germany, India, Morocco, China, Australia, France, Italy, Spain and Japan.

Renewable energy index, top 10 featured are: France, China, Germany, the United States, the United Kingdom, India, Japan, Canada, Italy and Brazil

Source: PV- Magazine


RPN’s Jake Eriksson contributed to this report.

Professional freelancer in Green Technology and Scientific Development. Educational background in the field of Human Resources Management.

CATEGORIES : Solar Energy Investment/ AUTHOR : Steve

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