Market for renewables has few barriers, concludes US agency

WASHINGTON, DC, US, November 9, 2005 (Refocus Weekly)

The market for renewable energy services faces few barriers, according to an independent U.S. federal agency.

“There are few barriers that specifically affect trade and investment in the wind, solar, biomass, geothermal, or ocean energy production or services sectors,” concludes the International Trade Commission in its report, ‘Renewable Energy Services: An Examination of U.S. & Foreign Markets.’ “However, regulatory barriers that apply to incidental sectors, such as professional licensing provisions that apply in the consulting and engineering industries, as well as investment measures, land-use provisions, and limitations on movement of persons that apply to trade and investment in all sectors, may affect trade and investment in the renewable energy industry.”

The investigation was launched in August 2004 at the request of the U.S. Trade Representative, who asked for a report that would be available to the public in its entirety. A public hearing was held in Washington in April, and the Commission was not allowed to include any confidential information in the report it filed with the USTR.

The report provides an overview of foreign and domestic markets for renewable energy services, and examines trade and investment in the market for renewable energy services including barriers affecting trade and investment. The study was limited to wind, solar, biomass, tidal and geothermal energy in space heating or electricity generation, including the operation, management and monitoring of green power and green heat projects and decommissioning services.

It also examined services incidental to the issuance of renewable energy certificates and research related to renewables. It concludes that equipment used in the renewable energy industry is subject to a wide range of tariffs in different countries, though “such tariffs reportedly are not a significant impediment to trade.”

The United States is the world’s largest market for biomass and geothermal power, while Germany leads the market for wind, Japan for solar and France for ocean power, and government incentives to promote renewables “have played a leading role in the development of certain renewable energy sectors,” it notes. Other factors that have contributed to the growth of the industry include technological advances which improve the cost-competitiveness of renewables technologies, and concerns regarding the environment and energy security.

Industry sources told the investigation that the global market for wind last year was US$3.8 billion, $2.8 billion for solar and $1.7 billion for biomass power production, with the U.S. trailing Germany in the market for wind, and in third place for solar behind Japan and Germany. In biomass, the U.S. is second to Finland.

USTR requested that the study include examples from markets in both developed and developing countries, and to examine economies with which the U.S. has established (or is in the process of negotiating) free trade arrangements. It provides an overview of foreign and domestic markets for renewables and examines trade and investment in renewables, including barriers affecting trade and investment. It also discusses existing regulatory practices that generate demand for the services.

ITC fact-finding investigations cover matters related to tariffs or trade, and are generally conducted at the request of the U.S. Trade Representatives, Senate Committee on Finance, or House Committee on Ways & Means. Reports convey objective findings and independent analyses on the subject and the ITC makes no recommendations on policy or other matters.


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