Friday, February 4, 2011

Green Technologies and Global Markets


Green Technologies and Global Markets

BCC Research predicts that the global market for energy-efficient technologies will grow at an aggregated compound annual growth rate (CAGR) of 9.2% for the 5-year forecast period of 2010-2015, from $200 billion in 2010 to $311.7 billion by 2015, compared to $331 billion for renewable energy.
The global market for installations and retrofitting of combined heat and power was $55 billion in 2009, and BCC Research estimates annual growth of 9.1% for 2010, for a total of $60 billion. BCC Research expects the compound annual growth rate (CAGR) to be 8.4% through 2015, reaching a total of $90 billion.
The global market for waste-to-energy installations and retrofitting is $22.3 billion in 2010. BCC forecasts a 6% compound annual growth rate (CAGR) for the next 5 years to reach almost $30 billion by 2015.
INTRODUCTION
STUDY GOALS AND OBJECTIVES
BCC Research’s goal in conducting this study was to evaluate the progress of several loosely connected technology sectors contributing significantly to the achievement of energy gains and to assess their potential over a 5-year period from 2010 to 2015.
With one exception (combined heat and power), these sectors are well-studied, but are stovepiped to the extent that cross-comparisons are difficult and gauging their relevance to commercial and policy decisions almost impossible. We were interested in understanding the role these sectors may play in reducing energy consumption and CO2 emissions. One reason for our interest lies in the companion to this report published in September 2010, titled “Global Markets for Renewable Energy.” The report made it clear that renewable energy sources, while a valuable tool in addressing both emissions and energy consumption, are in no way an adequate solution.
REASONS FOR DOING THE STUDY
BCC Research believes that bringing some of the more prominent energy efficiency technologies into one report will highlight their respective potential as markets, energy solutions and tools to fight climate change.
Some of the technologies studied for this report have been neglected by analysts, industry and politicians, and a comparative overview may be useful in determining the scope of attention and investment they should receive, even in a post-recession environment.
Recent events have contributed to the need for this study and its companion report. The collapse of negotiations at COP-15 in Copenhagen and political reversals in the EU and Australia, as well as the defeat of cap and trade legislation in the U.S., make it evident that the political will to limit emissions and create a global market for CO2 does not exist.
Our companion report also shows that renewable energy, despite a strong decade of growth accompanied by political support and subsidies, has been unable to do more than keep pace with increasing global demand for energy, and there is every chance that it will fall behind as a contributor, as governments are forced to withdraw support as they combat budget deficits.
It has been argued that innovation, which is a normal part of business processes, could make industry and domestic energy consumption so efficient that it could provide, through avoided consumption and emissions, a solution that picks up where renewable energy left off. However, the constant pace of innovations, at 1% to 1.5% per year over the past two centuries, has led to it being included in scenarios used for policy-making, scenarios that as yet do not lead to successful outcomes. It is not sufficient: instead of 1.5% annual growth, it would have to achieve between 4% and 6% per year. And the current pace is already accounted for in pessimistic projections.
However, there are large-scale sectors that have energy savings or efficiency potential that fall between the definitions of ‘renewable energy’ and ‘innovation as part of normal business processes.’ The second largest is not included in this report: nuclear power. The largest, however, is combined heat and power, which is set to become a potent force for energy efficiency, primarily through merging with waste-to-energy and the use of solid biomass as fuel. It is large enough that BCC Research predicts that the efficiencies achieved and emissions avoided will exceed that of all renewable energy sources during the period covered by this report. The other technologies covered have the scope to make significant contributions as well, and have been chosen because the market path to growth and the innovation path to achievement have already been identified.
SCOPE OF REPORT
The scope of this report is intentionally scattered, looking at some very low-tech areas where energy efficiency gains are possible through scale of the markets and some high-tech sectors that are just now coming online. We cover non-renewable but energy efficient sources of electricity and heat, modern and older areas where conservation is badly needed and introductory efforts to rationalize the distribution of electricity. There is no shortage of reports on each of these in the marketplace. What is lacking, and what this report is intended to provide, is a global perspective that places each of these sources in a relevant context for decision makers in both the public and private sectors.
INTENDED AUDIENCE
This report is intended for professionals at several levels working in the energy and/or environmental field. Although the report is structured around specific technologies, it is largely nontechnical in nature. That is, it is concerned less with theory and jargon than with what works, how much of the latter the market is likely to purchase, and at what price.
As such, the report’s main audience is executive management, marketing professionals, and financial analysts. It is not written specifically for scientists and technologists, although its findings concern the market for their work, including the availability of government and corporate research funding for different technologies and applications, so it should interest them as well.
Others who should find the report informative include government agencies, and environmental and public policy interest groups with an interest in energy, sustainable development, and the environment.
METHODLOGY AND INFORMATION SOURCES
Both primary and secondary research methodologies were used in preparing this study. BCC Research surveyed approximately 18 companies to obtain market data. Included were manufacturers, utilities, regulators, environmental analysts and reporters, and commercial consumers. In addition, we compiled data from current financial and trade information and government sources.
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