SBI Reports has been leading industrial market research reporting for more than a decade. The brand established SBI Energy to address the complex nature of the Energy and Resources industry. SBI Energy reports capture data vital to emerging energy market sectors on a global scale. Growth of energy technology, manufacturing, construction, transportation and investment is exciting in its innovations and opportunities, and integral to the advancement of security and science.
Recent blackouts in India and parts of the United States are fresh reminders that grid infrastructure revitalization and improvement are truly global challenges. Service disruptions are another stressor to the global economy, as they produce economic losses through lost business and added costs to energy. According to market analysts at research publisher SBI Energy, responses to grid instability the world over are anticipated to include Smart Grid technologies as less costly complements to additional power plants, and transmission and distribution (T&D) infrastructure expansions and rejuvenation.
The Smart Grid’s domain is necessarily broad, as its flexible deployment is envisioned to tackle regional, national and continental grid problems around the world. The causes of grid instability may differ – voracious leaps in energy demand from developing countries, insufficient transmission and distribution (T&D) investment in deregulated markets of developed countries – but they share a common solution in the concept of the Smart Grid. Voltage disruptions, blackouts and brownouts are perennial problems because contemporary grid systems remain inherently disjointed. In India, energy demand is outpacing available generation. Transmission line congestion and regional bottlenecks in the United States’ patchwork grid have been implicated in grid disruptions; some major blackouts have been sourced to the malfunction or loss of one substation or switchyard.
Smart Grid strategies do not address grid instability through system redundancies or improvements to the physical integrity of a grid; instead, they enable the dynamic deployment of system resources (load shaving, additional generation [power plants, storage, etc.], voltage regulation) and provide added system flexibility through real-time, two-way communications. For instance, the loss of a transmission line or the malfunction of a transmission-to-distribution substation could be addressed by a microgrid, one Smart Grid feature, used to effectively “island” a distribution network. The microgrid is able to manage its own generators and consumption loads independent of an unstable or downed centralized grid.
“This ability [of microgrids] to improve energy security and reliability respective to the centralized grid has caught the attention of the market,” notes SBI Energy analyst Bernie Galing, “with commercial districts, campuses, healthcare facilities, military bases and neighborhoods alike making notable forays in microgrid development.” Galing appraises the market for microgrid projects related to greater Smart Grid development at 5% of the total Smart Grid market.
More than any other technology, smart meters seem to capture the essence of the Smart Grid. Through smart meters, individual ratepayers can monitor their real-time electricity use and current rates. Smart meters also provide utilities with tremendous volumes of data for analytics that can later be used to model programs incentivizing lower electricity usage during peak loads, but also demand response (DR) programs using two-way communications to directly cut or reduce individual loads in a household, business or factory. Nascent deployment of smart meters in India has been motivated by a desire to reduce electricity theft, but these Smart Grid components also form the foundation for the long-term development of DR programs that could prevent blackouts during exceptional loads in the growing country.
In the end, Smart Grid technologies represent a value proposition. In the United States alone, the cost of service interruptions is estimated to reach $71 billion by 2020 (American Society of Civil Engineers, 2012). The U.S. Smart Grid market by that year will represent less than 10% of that cost and an excellent investment over more costly grid infrastructure replacements or expansions.
Otherwise a frontier of upstream development overseas, heavy oil production began in the United States over a century ago. Peak production rates were achieved the 1980s through increasingly sophisticated recovery means, but dwindling new field prospects landed U.S. heavy oil production in a state of decline shortly thereafter. The future of U.S. heavy oil is complicated without reserve additions, with aging fields once the bulwark of production in several states, and rising competition from other North American energy sources. As part of a global study on heavy oil, extra-heavy oil and bitumen, SBI Energy evaluates the current and future role of U.S. heavy oil production across from potentially competitive pressure from the Canadian oil sands and domestic production gains in light and medium crudes.
U.S. expertise in heavy oil production was forged at major oil fields in California originally discovered between 1890 and 1912. Faced with declining production following a 1968 peak, rising demand and national supply cut by the oil embargoes of the 1970s, California producers launched extensive steam injection projects in the 1970s and 1980s. Catalyzed by market constraints, California heavy oil prices rose at a rate consistent with general U.S. crude oil prices: $2.15 to $24.30 a barrel between 1970 and 1980. The subsequent collapse in U.S. crude oil prices in 1986 caused investment in California heavy oil to dry up as producers sought projects with broader margins (and without steam injection recovery).
By the 1990s, tightening global oil supplies restored the profile of domestic U.S. energy resources, including unconventional oil resources such as heavy crude. The price margin of lighter crudes (API Gravity 35.1-40.0°) over heavy crude (API Gravity 20.0° and less) shrank considerably between 2000 (average margin of 16.4% or $28.40 to$24.40) and 2010 (average margin of 4.8% or $75.90 to $72.40 a barrel). By the first quarter of 2012, such a margin or “heavy oil discount” disappeared altogether as domestically produced heavy oil began to fetch a higher price than the average lighter crude (U.S. Energy Information Agency, 2012).
Heavy crude supplies have become an increasingly dominant feedstock for some regional refiners with domestic U.S. heavy crude, but more importantly Canadian heavy crude, diluted bitumen, and Latin American heavy crude from Mexico and Venezuela. Continued investment by the U.S. upstream industry has not stemmed production decline for heavy crude oil as it has fallen from 537,000 barrels a day (b/d) in 2007 to 433,000 b/d in 2011 and 410,000 b/d in 2012. The greatest incentive for refinery usage of heavy oil feedstocks has been unconventional oil production – heavy crude, extra-heavy crude and bitumen – in the Western Hemisphere. Combined production from Canada and Latin America has risen from 5.2 million b/d in 2008 to a forecast 6.2 million b/d in 2012 despite faltering production of Mexican heavy crude. The result of unconventional heavy feedstock’s dominance in U.S. refinery inputs has been refiners’ gradual retooling of capacity to accommodate heavier crudes over lighter crudes more widely demanded throughout the world.
The recent boom in light, sweet (low sulphur) crude from the Bakken formation has done little to shift refining capacity back towards lighter crudes. According to SBI Energy estimations, Bakken light oil production rose from 4,700 barrels a day (b/d) in 2001 to 455,200 b/d in 2011, yet the loss of refiners in the Midwest (PAD II) to facility closure and heavy oil processing has cut into demand. Gulf Coast refiners likewise are seeking heavy crude oil feedstocks from Western Canada or abroad for export as petroleum products. Bakken light oil is unlikely to squeeze out or de-emphasize heavy crude oil in the domestic U.S. oil & gas industry.
Though overshadowed by developments in the Bakken formation, Venezuela’s Orinoco heavy oil belt and Alberta’s oil sands, U.S. heavy oil retains a crucial role in the domestic market. As of January 2012, California crude oil was priced at $105.00 a barrel compared to North Dakota crude oil at $90.20 (U.S. Energy Information Agency, 2012). These prices are indicative of heavy crude’s relative advantage of accessibility to buyers and continuing strong demand. The long-term market disadvantages of U.S. heavy crude oil – dwindling reserves and declining production – are mitigated by the growing influx and stability in supply of other regional North American and Latin American heavy crude resources. While Bakken light oil resources have seen rapid investment and development, U.S. heavy crude oil resources have also seen greater attention despite their age. In California, capital expenditures (CAPEX) for drilling, development and production services and equipment at heavy oil fields has risen from approximately from $12.10 a barrel in 2007 to an estimated $17.20 a barrel in 2012.
The continued role of heavy crude oil in the U.S. downstream market and upstream investment is one example among many to be found in SBI Energy’s publication Oil Sands and Heavy Oil Worldwide – Production and Infrastructure Markets that illustrates the integral role of heavy crude and bitumen resources in the global energy market, upstream industry investment, and associated infrastructure and equipment markets.
One of the main arguments standing for shale gas as a fuel of the future was its 50% lower global warming potential comparing with coal. However, recent studies on emissions associated with shale gas production and processing have challenged its position as a clean fuel.
Earlier this year, in the Report ‘Greenhouse Gas Emissions from the Petroleum and Natural Gas Industry’, the U.S. Environmental Protection Agency admitted that methane leakages occurring during gas transportation and processing may reduce the advantage of natural gas by half.
This information did not create as much rumours across the globe, as did the paper published in the May issue of Climatic Change Letters by Professor Robert Howarth from Cornell University, claiming shale gas could be even more damaging to global climate than coal.
Howarth’s team compared emissions for shale gas, conventional gas, surface-mined and deep-mined coal and diesel oil. The main conclusion of the study is that in 20 years timescale shale gas is worse for global warming than conventional gas, coal and oil.
The major concern is methane leakage occurring during hydraulic fracturing. Methane, the main component of natural gas, has 105 more warming effect than CO2. Howarth estimated that about eight percent of methane is released into the atmosphere from shale during the lifetime of the well. This is up to twice as much comparing with a conventional gas production, as it takes more time to drill the hydraulic shale gas well. The process also requires more venting and more flowback waste is produced.
The study has met strong criticism from the industry. The data used for calculations were challenged as low quality and questionable. The authors were pointed insufficient knowledge on coal and gas production and processing technologies leading to inconsistences in emissions accounting.
For example, when calculation the percentage of methane leakage from pipelines, Howarth’s team rely on transmission losses data from Russia, while in the U.S. the distance the natural gas travel to reach marketers is much shorter and provides fewer opportunities for methane leak-off. Another pointed issue is that in contrary to Howarth’s assumptions, not all ‘ lost and unaccounted gas’ is leaked to the atmosphere, but used to power gas processing equipment and is deducted from the total gas produced by a plant.
Worldwatch Institute arguments that it is not evident if the lifecycle assessment of coal and gas are held at the same standards in the Howarth’s study.
Dr Matt Ridley in his report ‘The Shale Gas Shock’ prepared for the London-based Global Warming Policy Foundation finds concerns over the footprint of shale gas extraction sites deeply exaggerated. He also criticizes Howarth’s study for relying mainly on assumptions, simplifications or the authors’ choices.
Dr Ridley finds shale gas ‘ubiquitous, cheap and environmentally benign’ and his opinion is shared by many. There is no doubt that natural gas is still more attractive than other options, as for example expensive and potentially dangerous nuclear energy. However, the emerging information may moderate political argument for shale gas.
More Information: http://www.sbireports.com/Global-Shale-Gas-6071853/
Manufacturing equipment for the global PV industry has meant big business for suppliers over the past five years. According to SBI Energy’s latest study, global industry production capacity grew from almost 5 gigawatts (GW) of PV cells and thin film PV modules at the end of 2006 to roughly 38 GW at the end of 2010. Greater production capacities have in part been achieved by more production facilities, more production lines, and greater capital expenditures on the required equipment. Rising demand for solar PV systems and higher rates of PV installation have driven growth in actual PV cell and thin film PV module production output and by far the most rapid area of industry expansion: thin film PV technology production and development. In the same period of time, the total industry production capacity for thin film PV technologies rose from roughly 400 megawatts (MW) to 7.5 GW. The growth in thin film PV production capacity underscores the rapid expansion and maturation of associated thin film PV manufacturing equipment markets in the past five years.
Numerous companies have jumped into the market for thin film PV manufacturing equipment market, with heavyweights such as Applied Materials, Centrotherm, Oerlikon and Veeco as well as a number of component and tool suppliers. Thin film PV manufacturing leverages equipment ranging from vacuum deposition chambers, inkjet printing equipment, laser tools, furnaces, wet etching benches, conveyor belt lines, robotic arms, to lamination and encapsulation equipment. Thin film PV technologies represent a major area of research and development (R&D) and commercial production in the PV industry. Some producers have already reached 1 GW in nameplate production capacity (First Solar, Solar Frontier), while many others produce under total capacities of less than 300 MW or have yet to commence marketable production. Similar to the PV industry overall, Asia is the end use market for the majority of the global thin film PV manufacturing equipment market with globally-leading industries in China, Japan, Taiwan, and Malaysia.
SBI Energy, a global leader in global energy market characterization, recently completed its worldwide evaluation of thin film PV manufacturing equipment markets, including markets for plasma deposition equipment – sputtering, PECVD; thermal deposition equipment – evaporation, sublimation, select CVD process equipment; laser tools; wet process equipment; and other equipment types found along thin film PV production lines. SBI Energy’s characterization is based on a fastidious and comprehensive review of operational data and business development strategies from over 300 PV producers worldwide representing the vast majority of market customers. Compiled data from the review is combined with carefully researched market growth factors including PV market and industry growth, national incentives for PV installations and PV manufacturing, and tempered by anticipated trends in cyclical PV industry investment in additional production capacity and oversupply in the c-Si PV supply chain across from moderated demand from regional markets in the European Union. The result is a series of global, regional and national market projections through 2010, indicating annualized growth rates of over 19% in the global market for thin film PV manufacturing equipment.
SBI Energy, a global leader in global energy market characterization, recently completed a worldwide market evaluation for waste to energy technologies, including incineration, gasification, plasma gasification, pyrolysis, and anaerobic digestion. SBI Energy’s characterization is based solidly in real project data from actual proposed installations around the globe. These existing data are combined with carefully researched market growth factors including national and local incentives and waste management trends, and tempered by anticipated trends in funding availability and public acceptance of waste to energy. The result is a series of conservatively reasonable national to regional market projections through 2021, indicating annualized growth rates of over 11% in the global market.
More Information: http://www.sbireports.com/Thin-Film-Solar-6329940/
Among the renewable energies, solar energy tapped through PV technology has become the widely accepted source of power generation. International Energy Agency (IEA) studies show that the solar power will account for 5% of the global electricity by 2030 and 11% in 2050. PV industry has grown over 40% in the last decade with cumulative worldwide installations estimated at 39.5 GW as of end 2010 with growth of around 70% from 2009. Europe continues to be the leading player in installations and component shipments, followed by markets of Japan, North America and China. In terms of global cumulative installed capacity, Germany leads the way with 17 GW of installations as of end 2010. This represents about 43% of the world’s total cumulative PV capacity. Italy (3.5 GW), Japan (3.3 GW) and USA (2.6 GW) follows Germany, but way behind in capacity. China is one of the front runners in emerging markets well poised to achieve 1 GW capacity by 2011.
The future PV market would be primarily driven by the needs of North America and emerging markets of Asia. Golden Sunshine program of China aims at achieving 20 GW of PV capacity by 2020, whereas India’s National Solar Mission envisages installed capacity of 22 GW by 2020. The FiT rate cuts and regulation on farm land usage is likely to shift the growth prospects outside EU countries. Outside EU, Japan, USA, China and Australia are the leading players with higher installed capacities and future growth potential. Various incentives like the investment tax Credit and ARRA funds for renewable energies are expected to boost the solar power market in USA
European Union (EU) continues to lead the world PV market with cumulative installations of around 29.3 GW as of 2010. The main drivers of growth in EU are Germany, Italy, Spain, and France. As of 2010, Germany has a cumulative installed capacity of 17GW followed by Spain (3.8 GW), Italy (3.45 GW) and France (1 GW). Spain and Germany continue to be the leading market for PV inverters with Czech Republic, Bulgaria, Portugal and Greece as emerging markets.
The demand for PV inverters were spurred mainly by the growth of PV market in EU member countries. Global inverter production has grown from 1.6 GW in 2006 to 21.4 GW in 2010 registering a CAGR of 91%. The growth has been over 150% in last year alone mainly due to high growth and near term anticipated PV installations in EU countries. As of end 2010, the PV inverter market size is valued at USD 6.6 billion doubling over the previous year. Going by the Q2’11 revised projections of major PV players; we expect the revenue to come down by 10 - 12% and our analysis predicts the market size to be around $5.5 – 5.85 billion in 2011, but with the growth momentum going, the market is expected to touch approximately $7.5 billion in size by 2015.
PV cells are semiconductor substances used for converting solar energy into electrical energy. They are of two types – mono-crystalline and multi-crystalline. PV cells are made of thin sheet of silicon called wafer.
Modules are made of a number of PV cells connected together by metallic wires to deliver right voltage and current. Normally they are covered on the front surface with glass and rear with glass or plastic sheet. This gives protection and safety to PV cells and provides enough strength for easier mounting.
Thin films use thin layers of semiconductors deposited on glass substrates to produce solar cells. They require less expensive material due to smaller size and larger deposited area. These individual solar cells are connected to produce right electric output.
Production and Shipment Trends of PV Components (Cells & Modules)
It is difficult to estimate the actual shipments because of both in-house and outsourced manufacturing practices followed by almost all companies. For example – LDK solar does contract manufacturing for other companies like Q-cell, Canadian Solar, Solarfun holdings etc. Similarly, Hanwa Solarone also does contract manufacturing for Q-cells. So the shipments reported by many of these companies are counted more than once and therefore it is hard to derive the actual industry shipments. Based on our analysis of 10 leading manufacturers capacities available in world over we expect the shipments to be in the range 29 GW in 2011 and production capacity of around 40 GW.
Based on our study, the global market growth for PV cell production capacity from 2006 – 2010 were at a CAGR of 72%. Accelerated by a booming PV market, the capacity addition grew by over 74% in 2010 alone. As PV growth is expected to decline in 2011, we expect a similar declining trend in planned capacity additions also. There would be a drastic reduction in capacity additions and as per our analysis; the growth in 2011 is predicted to be only 43%.
Micro inverters are generally used for residential and small scale commercial applications requiring < 1 MW of installations. They are 7 – 9 times more energy efficient than the conventional string and grid inverters. The MLPM (Module level power management) solutions (micro-inverter and optimizer) have other advantages like energy harvest in the range 2 – 25%, reduced planning needed during the project phase, easier to install, fire prevention and safety. Currently it is sold mostly in the North American markets of US and Canada. Enphase energy is the leader in micro inverter market with sales touching 500,000 units in 2010 and is planning to expand its foot print globally by establishing offices in Europe, which is the largest PV inverter market.
In near term, we expect the PV inverter market to touch around 27 GW by 2015 and we forecast annual supplier side inventory approximately at 3 GW. PV inverter shipments were between 8 – 8.5 GW and 20 – 21 GW respectively in 2009 and 2010 periods. This translates to a growth of around 150% in a single year. Under modest growth scenario, we expect PV inverter shipment to grow at a CAGR of 16% from 14.9 GW in 2011 to 27.3 GW in 2015. PV inverter shipments are likely to register a lower figure in 2011 at 15 GW and increase thereafter to touch 2010 levels of over 20 GW by 2014.
A high growth, policy driven PV market is unlikely to continue beyond 2010. The growth witnessed in 2008-10 period is implausible until 2015. Anticipating continued boom, many manufacturers have increased or have plans to increase their production capacity. Currently the channel inventory is estimated at 4 GW and a weaker demand in 2011-12 will down cast the surplus production capacity. We expect the capacity utilization to fall below 50% and prices drop by 30 – 40% in 2011-12. The short lull in 2011-12 will lead to market correction for a sustainable growth in future. The gross margins of many manufacturers are likely to shrink as raw materials are available in plenty accentuating a free fall in prices of all PV components.
The feedstock, Polysilicon prices have dropped from high as $450/Kg in 2008 to $54/Kg in 2011. Spur in additional capacity and excess inventory, coupled with weakening demand will lead a further downward slide to $35-40/Kg by 2012. With the free fall in prices, there is a limited option of cost cutting as European manufacturers are facing stiff competition from low cost Asian manufacturers. In future, forward integration will be the key strategy for a vast majority of European manufacturers by entering into business with PV project investors.
Thin film technologies are a promising trend with less or no consumption of raw material, Polysilicon. Though it offers many advantages of conventional crystalline silicon cells, the mass manufacturing had not picked as anticipated because of the high capital cost involved in setting up of the production facility. In the coming years, we expect more players to adopt this technology in the PV component production process. As of end 2011, we expect thin film technology to contribute around 4000 MW or 30% of the total market. The emerging PV technologies include inorganics and organic thin film technologies involving materials like Si and CiS. Both the technologies are yet to be proven in the market and are aimed at capturing the niche market of semi-conductor industry. Another revolutionary technology is the thermal photovoltaic (TPV) technologies, which is undergoing research and trials. In TPV an emitter is used to generate light and when heated up the thermal energy generated is converted to electricity.
More Information: http://www.sbireports.com/Thin-Film-Solar-6329940/
Virtually all energy storage technologies are limited by the fact that their power and energy capacity ratio is fixed. For instance, sodium-metal halide (NaMx) batteries have a high energy capacity but can only deliver that energy relatively slowly. On the other hand, sodium-sulfur (NaS) and lithium-ion batteries have a lower energy capacity but can supply that power much quicker. While there is some variation within a battery chemistry, these ratios are pretty much fixed. But typically these ratios are not the same as what you actually need for an energy storage project.
Having to make this kind of tradeoff is what makes energy storage project developers and electrical utilities so agnostic when it comes to energy storage technologies. For any given project, one of the two factors is going to be a limiting parameter and likely to increase the costs of the project much more than if you could independently provide for energy capacity and power capacity separately.
According to Jacob Rikard Nielsen, Vice President of Business Development for the utility project company RUBENIUS, it is easy to imagine a project where you have to overinvest in power or energy because of fixed ratios of these parameters. Because of this fact, currently available energy storage technologies such as NaS fail to meet any suitable wish list of energy storage characteristics.
The utility AEP is in a similar situation as it tries to develop energy storage solutions for its electrical grid. AEP has tried a number of different energy storage technologies, such as NaS and lithium-ion, trying to determine where these technologies could potentially fit into AEP’s Smart Grid plan. However, according to executives at AEP who spoke with SBI Energy, all of the energy storage technologies that have been tried are still too expensive, leaving the company still waiting for the right technology to come along.
Technologies such as compressed air storage and flow batteries can solve the fixed ratio problem, but these technologies have other issues preventing them from more widespread acceptance. While new energy storage technologies such as these can potentially fix the problem, this is not necessarily an option for established energy markets, such as in North America and Europe, where each project has to be able to provide a net benefit to the utility’s consumers. According to Nielsen, newer technologies have a better chance of being used in emerging markets such as India, the UAE and china, where there is more of a desire to build infrastructure that adds to the economic wealth of the country rather than worrying about the financial success of each individual project. This is why you are seeing NaS systems enjoying huge growth in countries such as Mexico and the UAE and why energy storage projects are lagging in the U.S.
More information: http://www.sbireports.com/High-Temperature-Energy-6207035/
Home energy management systems (HEMS) products are fostering an era of sustained household energy efficiency during a time when many countries are improving their electric grid infrastructure. Consumers, however, have been generally reluctant to purchase HEMS products to monitor and reduce their energy consumption and lower their monthly electric costs. Moreover, many electric utilities are less than eager to develop energy programs and incentives for customers to use HEMS products.
HEMS products manufacturers, meanwhile, have been caught in the middle of fluctuating consumer demand and the recent volatility among competitive technology suppliers. Companies such as Cisco, Google, and Microsoft, promised delivery of their home-grown HEMS offerings as recently as 2008. In August 2011, however, Cisco Systems followed its July announcement of massive corporate layoffs with the bulletin that it would be abandoning its building energy management products strategy for now. Earlier this year, Google announced it would retire its PowerMeter HEMS product only two years after it launched to great industry fanfare. Another technology behemoth, Microsoft, said that slow adoption of its own brand of HEMS product has led it to shift efforts to commercial, instead of residential, buildings.
Despite the setbacks, SBI Energy remains quite bullish on the HEMS production industry as governments worldwide increasingly back Smart Grid improvement initiatives with public funding that will benefit manufacturers of the home-based tools and technologies required for HEMS deployment. The HEMS products development landscape, SBI Energy believes, will likely flourish through 2020 as many niche suppliers of products in communications infrastructure, smart metering, and in-home energy interfaces begin to establish a stronger presence in the marketplace.
Part of the sluggish industry growth can be attributed to the suppliers themselves, many of which have done a poor job of promoting the benefits of their products to a skeptical consumer base. The public awareness of HEMS benefits will improve as consumers increasingly purchase smarter, more energy-efficient household products, including appliances and electric vehicles, that will require stricter monitoring of the energy consumption at reduced rates. HEMS products will ultimately enable consumers worldwide to limit their energy consumption and more effectively manage their spending on electricity used for household appliances. Meanwhile, utilities are benefiting from the deployment of HEMS by improving their overall response to electricity demand on the grid. HEMS help limit energy use and save consumers money on their electric bills.
SBI Energy finds that through 2020, HEMS products manufacturers will embark on assertive public awareness campaigns to promote their wares to a very wary customer base of homeowners that has until now largely resisted the investment in HEMS for energy management and cost savings. Those suppliers that understand the long-term benefits of exceptional product and services marketing to the broader population will have the competitive advantage. These astute suppliers are also investing resources in securing long-term contracts with large energy utilities.
More information: http://www.sbireports.com/Home-Energy-Management-6315359/