SBI Energy: Market Insights, Opportunities &Trends

On January 1^st, 2011 SBI Energy (Rockville, Maryland, U.S.) released a new report examining clean energy investments through the American Recovery and Reinvestment Act of 2009 (ARRA or “stimulus act”) and their impact on markets within the power, transportation and building sectors. The company states that its report: “ARRA Report Card: Two Years Later”, creates a time-capsule analysis of the impact of ARRA investments, which it says include allowing U.S. renewable energy markets to grow during the recession.

“ARRA energy-related funding not only presents potential near-term economic benefits, but also long-term economic and strategic investment and a transformative opportunity for the energy sector,” states the report’s introduction. “Without ARRA investments, it is likely that the pace of renewable energy project construction and manufacturing growth would have otherwise slowed dramatically due the sharp economic and financial downturn over this period.”

SBI Energy says smart grid investments were strategic for renewables

The report notes that at USD$94.8 billion, clean energy investments account for 30% of total ARRA appropriations for innovative infrastructure improvements. The Power Sector received USD$21 billion of that funding, let by almost USD$11 billion in investments in smart grids.

The report notes the strategic significance smart grid investments, stating that the successful implementation of increasing renewable energy generation and other ARRA energy initiatives hinges on successful grid modernization.

The report also examines funding for renewable energy research projects, including solar thin-films and new wind turbine designs. SBI Energy cites data from the U.S. Council of Economic Advisors which states that innovations in solar photovoltaic (PV) technology could drive down the cost of PV modules over the next five years as much as 50%.

Among the data presented, the report identifies and profiles 20 private sector companies that have received ARRA awards under clean energy programs.

SBI Energy is a division of MarketResearch.com Inc. (Rockville, Maryland, U.S.).

2011-02-03| Courtesy: SBI Energy | solarserver.com © Heindl Server GmbH

(Source: sbireports.com)

Market Insights: A Selection From The Report

Data Centers
The function of a data center is to house the infrastructure needed to store and serve vast amounts of data. These facilities house servers, storage devices, network equipment, power supplies, cooling equipment and other infrastructure. An estimated 33 million servers were in use within data centers globally in 2005. This number is expected to grow to more than 122 million by 2020.

Data centers consumed 130 billion kilowatt hours of electricity in 2005, or 0.7% of the world’s electricity generation that year. About half of the electricity consumed within a data center is used to power servers and storage devices, while approximately 45% of the electricity used by the data center is for cooling systems and the balance for operation of uninterruptible power supplies (UPS). Assuming no energy reduction initiatives, by 2010 electric consumption of data centers will have grown to 210 billion kilowatt hours and to 355 billion kilowatt hours by 2015. Data centers would then account for over 1.5% of projected total global electricity generation in 2015.

The forecasted energy consumption and associated carbon emissions shown in Figure 3-3 above assume no energy reduction initiatives. However, there are several technological developments and trends underway which will lead to reduced energy use within data centers. These include…

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The energy storage market is benefitting from the convergence of several macro trends and is experiencing rapid growth. Nations around the world are actively investing in the expansion and upgrade of electric grids to meet current and future demand. Technologies such as distributed and renewable generation, microgrids, and smart grid technologies are further highlighting the necessity for and benefits of energy storage systems in the utility sector. Concurrently, significant investments are being made to improve the cost/performance and commercial viability of constituent technologies. The market for several energy storage technologies is expected to experience dramatic growth over the next several years.

Role of Energy Storage in Renewables Integration

Globally, the percentage of electricity generated through the use of renewables is expected to increase from 17% in 2007 to over 23% by 2035. The share of renewable power generation in the US is also expected to rise over the period. Much of the electricity produced from these renewable sources will be generated by non-utilities and even individuals. Furthermore, the power generated from renewable energy sources is highly variable and subject to intermittent operation due to the inherent vagaries of sources such as wind and solar. Thus, energy storage solutions are necessary to maximize the generation of electricity from these sources and to transmit it to where it is needed, when it is needed.

Due to these factors, it is estimated that only about 15% of US power needs can be supplied by renewable energy sources unless the electricity produced from these sources can be stored for later use. It has also been estimated that more than $340 billion will need to be invested in power storage capabilities to raise the supply of power from renewable sources by just another 5 percentage points from 15% to 20%.[1] As adoption of wind and other intermittent and variable renewable energy generation increases in nations around the world and exceeds the 15% of total electricity generation threshold, the use of energy storage solutions will become a pre-requisite to further integration of renewable energy.

Energy Storage in Microgrids

Maintaining, expanding and upgrading the electric grids to meet the growing demand for electricity is expected to cost trillions of dollars over the next twenty years. This assumes, of course, that the manner in which electricity is produced and delivered will remain basically the same as it has for over one hundred years, i.e. large centralized generation in remote areas, connected to distant population centers through hundreds of miles of transmission and distribution infrastructure. An alternative solution gaining traction is the microgrid.

Microgrids function in a manner similar to the large electric grid but on a much smaller and localized scale. Microgrids are electric grids for small areas or even single buildings. Given their emerging nature, and the fact that microgrids are often custom designed for specific end-user requirements, several varying definitions and implementations exist. There is, however, growing agreement that microgrids must minimally incorporate distributed generation and energy storage solutions that are proximal to the point-of-use. While most microgrids are expected remain connected to the larger grid, they are also designed to be self-sufficient and thus capable of disconnecting or “islanding”.

The ability of microgrids to incorporate distributed renewable energy generation and to avoid the cost and poor reliability of long distance transmission infrastructure is a significant driver of microgrid adoption. Since most microgrids leverage storage as an essential component, growth in microgrids is also expected to drive further growth in energy storage systems, and vice versa.

[1] Clayton, Mark, “How Enormous Batteries Could Safeguard The Power Grid”, The Christian Science Monitor, March 22, 2009

Energy Storage Technologies in Utility Markets Worldwide

Energy consumption is rapidly growing around the world. The modernization of emerging economies (such as India and China) has increased pressures on traditional energy providers (as well as increasing environmental concerns). As fossil fuel reserves dwindle, there is a growing need for clean energy supplies. Clean energies have emerged as an alternative for the fossil fuels, but many technologies still do not display the same level of efficiency and maturity compared to more traditional sources.

Investments remain a key growth factor, as many technologies present technical limitations to practical use.   Many existing cleantech technologies cannot compete with coal energy, with is used as the current benchmark when evaluating feasibility.   Subsidies are an important key of the clean technologies puzzle, but if these technologies are unable to develop long-term comparables, they run the risk of being relegated to niche products.   This is especially true of renewable technologies.  

This new SBI Energy reports delves into the global investments patterns dedicated to developing and commercializing these technologies.   It covers a significant range of technologies and geographies to gain a greater understanding of the global investments market. After interviewing close to a dozen key stakeholders of the clean energy technology sector and doing extensive documentary research, we were able to build this report.

Exploring investment growth in seven energy producing technologies (solar, wind, biofuel, hydro, geothermal, nuclear and clean coal) and eleven geographies (US, Canada, Brazil, Spain, Germany, UK, France, China, India, Japan and Australia), it is an essential tool for any manager looking for a global clean energy investment perspective within a single document.

Cleantech Energy Investing