New renewables to invest $1,380 billion over 20 years

NORTHFIELD, Illinois, US, March 15, 2006 (Refocus Weekly)

The world will invest an average of US$69 billion a year in emerging renewables over the next two decades, according to the latest forecast from the McIlvaine Company.

The annual global energy investment will be $304 billion a year for 20 years, explains the online ‘World Market for Your Products’ report. The largest investment category will be coal-fired boilers with an average investment of $48 billion a year, but the trend for coal will decline from $10 billion a year in the first decade to an average of $6 billion in the final decade. Upgrades to coal-fired plants will be another $8 billion, while new and upgraded refineries will require $40 billion.

Fossil synthetic fuels will invest $35 billion, $27 for gas turbines, $25 for natural gas production, $16 for oil production, $15 for nuclear, $12 for liquid natural gas and $9 billion for coal gasification, it reports.

Among renewables, wind energy will lead with $30 billion a year of investment over the two decades, followed by biomass at $16 billion, solar at $13 and ethanol at $10 billion a year.

“Cost of wind power is now attractive and there is already a booming market for this category of power generation,” the report notes. “Solar power promises to be an attractive option longer term, but costs are still relatively high.”

“Biomass, including waste-to-energy, is already a big business and will grow modestly throughout the period,” it adds. “Hundreds of ethanol plants are now in planning and construction. The promise of new technology to make ethanol from grass instead of corn will make this fuel competitive with a shrinking supply of petroleum.”

Coal gasification and nuclear will take a larger market share of electricity generation over the two decades, but achievements in improving efficiency of conventional coal plants and minimization of CO2 will slow that transition.

Trends in each category usually are shaped by developments in others, with negative developments in one category leading to positive growth in others but, in some cases, the opposite is true. If oil production peaks in 2010 instead of 2020 and production declines faster than anticipated, ethanol will grow more. Conversely, if coal becomes more attractive, ethanol will increase again because the cost of ethanol production falls if cheap coal is used to generate steam.

“There are a number of uncertainties which will lead to continuing adjustment of these forecasts as better insights are gained,” it explains. “The global warming issue is a big wild card. Technology developments in coal-to-liquids and solar power are also two big variables. New technology will play a big role in shaping this market.”

Economics and politics are also major variables, and continued dependency on political stability in the middle east is a major risk, it warns. “The vulnerability of nuclear, LNG oil and gas production, and refining facilities contrasts with the relative security of coal, wind, solar, biomass, and ethanol.”


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