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Energy Efficiency Continues to Gain Prominence Across End User Sectors
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SINGAPORE, Jan. 6 /PRNewswire/ -- 2008 has been a historic year for theEnergy & Power industry as it began with very high commodity prices whichthreatened to delay several large energy & power projects because of materialshortfalls.
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According to Frost & Sullivan Asia Pacific Director of Energy & PowerSystems Practice Ravi Krishnaswamy, the derailment of these projects is stilla possibility; this time due to the credit crunch.
He added that the global financial crisis and slowing down of the USeconomy will impact the Energy & Power industry in Asia due to the reduceddemand for industrial and consumer goods in the US and Europe.
"The reduced demand would mean less demand for electricity from factoriesin China, India and other parts of Asia Pacific. Since there is a peak powershortage in most of the Asian countries, except Malaysia and Singapore, thereal impact will be for vendors of standby and backup power equipment such asgenerator sets and UPS to the industrial sector," Krishnaswamy said.
He also added that there is a valid possibility for some of the energy &power sector projects with US Foreign Direct Investment or project financingwill not go through due to the collapse of Wall Street giants and the adverseimpact on interbank lending.
However, things are not as severe as it seems. To cushion that effect andkeep their order books healthy, some electrical equipment manufacturers likeGE Energy has promised to offer project finance or supplier credit.
In terms of industry specifics, Krishnaswamy says that the slew of coaland nuclear power plant addition announcements in the first half of 2008 mighthave been tempered by the economic crisis but committed projects remain ontrack. "US alone have planned construction expenditures of US$85 billion onnew coal plants and environmental retrofits on existing ones. I believe mostof it will go through," he said.
Industry trends will see a focus on efficiency and fuel savings due to asluggish economy and history of high electricity prices. Krishnaswamy foreseesthat products from light bulbs to turbines with these features will be indemand.
"Currently, low oil prices will be a challenge to justify some greenenergy investments but the situation will change in the not too distantfuture," he said. "Newly elected US President Barack Obama's final policy onclimate change and Kyoto Protocol will affect the energy & power sectorglobally," he adds.
According to Krishnaswamy, the early part of 2009 may see renewable energyprojects suffer because of the death of debt financing brought on by troublesat large green energy investors like Lehman Brothers, Wachovia, AIG, andMerrill Lynch. He continues to say that it should pick up in the latter partof the year, due to anticipated government support in form of affirmativepolicy and tax credits, making alternate energy one of the few growth sectorsin 2009.
"Energy efficiency will continue to gain prominence across the end usersectors of industrial, commercial and residential. Governments are likely tosupport these measures because of avoided cost of asset creation in newgeneration capacity and also proven benefit in terms of emission reduction,"he added.
Other areas that may continue to show growth include alternate energytechnologies such as solar and fuel cells, metals like lithium and zinc usedin the development of energy storage technologies, clean coal research as aresult of carbon tax by the new US administration, and the biomass and wasteto energy sector.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, partners with clients toaccelerate their growth. The company's TEAM Research, Growth Consulting andGrowth Team Membership(TM) empower clients to create a growth-focused culturethat generates, evaluates and implements effective growth strategies. Frost &Sullivan employs over 45 years of experience in partnering with Global 1000companies, emerging businesses and the investment community from more than 30offices on six continents. For more information about Frost & Sullivan'sGrowth Partnership Services, visit http://www.frost.com.
MEDIA CONTACT: Donna Jeremiah Corporate Communications - Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications - Asia Pacific P: +603 6204 5910 E: carrie.low@frost.comSOURCE Frost & Sullivan
According to Frost & Sullivan Asia Pacific Director of Energy & PowerSystems Practice Ravi Krishnaswamy, the derailment of these projects is stilla possibility; this time due to the credit crunch.
He added that the global financial crisis and slowing down of the USeconomy will impact the Energy & Power industry in Asia due to the reduceddemand for industrial and consumer goods in the US and Europe.
"The reduced demand would mean less demand for electricity from factoriesin China, India and other parts of Asia Pacific. Since there is a peak powershortage in most of the Asian countries, except Malaysia and Singapore, thereal impact will be for vendors of standby and backup power equipment such asgenerator sets and UPS to the industrial sector," Krishnaswamy said.
He also added that there is a valid possibility for some of the energy &power sector projects with US Foreign Direct Investment or project financingwill not go through due to the collapse of Wall Street giants and the adverseimpact on interbank lending.
However, things are not as severe as it seems. To cushion that effect andkeep their order books healthy, some electrical equipment manufacturers likeGE Energy has promised to offer project finance or supplier credit.
In terms of industry specifics, Krishnaswamy says that the slew of coaland nuclear power plant addition announcements in the first half of 2008 mighthave been tempered by the economic crisis but committed projects remain ontrack. "US alone have planned construction expenditures of US$85 billion onnew coal plants and environmental retrofits on existing ones. I believe mostof it will go through," he said.
Industry trends will see a focus on efficiency and fuel savings due to asluggish economy and history of high electricity prices. Krishnaswamy foreseesthat products from light bulbs to turbines with these features will be indemand.
"Currently, low oil prices will be a challenge to justify some greenenergy investments but the situation will change in the not too distantfuture," he said. "Newly elected US President Barack Obama's final policy onclimate change and Kyoto Protocol will affect the energy & power sectorglobally," he adds.
According to Krishnaswamy, the early part of 2009 may see renewable energyprojects suffer because of the death of debt financing brought on by troublesat large green energy investors like Lehman Brothers, Wachovia, AIG, andMerrill Lynch. He continues to say that it should pick up in the latter partof the year, due to anticipated government support in form of affirmativepolicy and tax credits, making alternate energy one of the few growth sectorsin 2009.
"Energy efficiency will continue to gain prominence across the end usersectors of industrial, commercial and residential. Governments are likely tosupport these measures because of avoided cost of asset creation in newgeneration capacity and also proven benefit in terms of emission reduction,"he added.
Other areas that may continue to show growth include alternate energytechnologies such as solar and fuel cells, metals like lithium and zinc usedin the development of energy storage technologies, clean coal research as aresult of carbon tax by the new US administration, and the biomass and wasteto energy sector.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, partners with clients toaccelerate their growth. The company's TEAM Research, Growth Consulting andGrowth Team Membership(TM) empower clients to create a growth-focused culturethat generates, evaluates and implements effective growth strategies. Frost &Sullivan employs over 45 years of experience in partnering with Global 1000companies, emerging businesses and the investment community from more than 30offices on six continents. For more information about Frost & Sullivan'sGrowth Partnership Services, visit http://www.frost.com.
MEDIA CONTACT: Donna Jeremiah Corporate Communications - Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications - Asia Pacific P: +603 6204 5910 E: carrie.low@frost.comSOURCE Frost & Sullivan
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