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The global electricity infrastructure is undergoing a series of changes due to shifts in the regulatory environment and the increasing commercial viability of new generating technologies. According to a report by ABI Research, a technology market research firm, power generation is steadily moving into the hands of privately owned enterprises and away from organizations that are directly owned or controlled by governments.
With traditional power generation industries in developed countries experiencing steady but unspectacular growth, attention is turning to distributed generation as a way of reducing the load on the electricity grid, increasing system efficiencies, and preparing for blackouts. In some developing countries, particularly India and China, distributed generation shows potential for double-digit expansion. This is partly because transmission losses in developing countries can be as high as 30% of the power produced, compared with roughly 10% in developed countries, making distributed power seem particularly attractive.
However, despite recent blackouts and energy shortages justifying the case for distributed generation, installed capacity projections have been lowered, according to ABI. Most fuel cell and microturbine companies reported disappointing results for 2003, as they failed to ship expected quantities of their products. Sales of generator sets, which still dominate the market for distributed generation, have also been sluggish since 2000. Suppliers had excess inventory for a couple of years until significant price markdowns late in 2003. The genset industry is recovering, but slowly.
Despite the uncertain near-term market for distributed energy systems, ABI still thinks the long-term market potential looks promising, with global installed capacity projected to reach 200 GW by 2011.
International renewable energy power installations have recently experienced record-breaking growth. According to the American Wind Energy Association (AWEA), the global capacity to generate electricity from wind grew by more than 8,000 MW to more than 39,000 MW in 2003. Global wind power capacity has grown five-fold over the past six years, according to AWEA. Solarbuzz Inc., an international solar energy consulting company, reports that the global capacity for solar electric power (PV) generation grew by 34% to 574 MW in 2003, fueled in part by a 76% growth in the German market. Worldwide production of solar cells grew by 40% to 742 MW, suggesting that manufacturing capacity easily managed to keep ahead of demand.
For More Information
- Clean-Energy Trends 2003 — A report by Clean Edge Inc. that examines the global market trends for a variety of distributed, clean energy technologies, including wind, solar, and fuel cell systems, as well as grid optimization technologies.
- Distributed Generation: Growth Forecasts for Fuel Cells, Photovoltaics, Wind Turbines, Reciprocating Engines, and Small Gas Turbines — ABI Research, April 2004. Site registration (free) required.
- Distributed generation in Europe — Information on seven major European research projects involving a hundred organizational partners. Their collective mission is "to facilitate the integration of renewable energies and distributed generation into the future European electricity network and to create a competitive European industry for a sustainable and reliable future power supply."
- "European Utilities and Distributed Generation: A Slow Love Affair?" — Power Engineering, May 2002. This article outlines the prospects for distributed generation in Europe, based on the results of a survey of Europe's electric utilities.
- Generator Sets: A Global Analysis of Genset Markets in the New Era of Distributed Generation — ABI Research, February 2004.
- International power market profiles provided by Platts:
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