Energy Efficiency Continues to Gain Prominence Across End User Sectors
SINGAPORE, Jan. 7 /PRNewswire-AsiaNet/ --
- Taking a look back at the Energy & Power Industry in 2008 and its market outlook for
2009 -
2008 has been a historic year for the Energy & Power industry as it began with very high commodity
prices which threatened to delay several large energy & power projects because of material shortfalls.
According to Frost & Sullivan Asia Pacific Director of Energy & Power Systems Practice Ravi
Krishnaswamy, the derailment of these projects is still
a possibility; this time due to the credit crunch.
He added that the global financial crisis and slowing down of the US
economy will impact the Energy & Power industry in Asia due to the reduced demand for industrial and
consumer goods in the US and Europe.
"The reduced demand would mean less demand for electricity from factories
in China, India and other parts of Asia Pacific. Since there is a peak power
shortage in most of the Asian countries, except Malaysia and Singapore, the real impact will be for vendors
of standby and backup power equipment such as
generator 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 financing
will not go through due to the collapse of Wall Street giants and the adverse
impact on interbank lending.
However, things are not as severe as it seems. To cushion that effect and
keep their order books healthy, some electrical equipment manufacturers like
GE Energy has promised to offer project finance or supplier credit.
In terms of industry specifics, Krishnaswamy says that the slew of coal and nuclear power plant addition
announcements in the first half of 2008 might
have been tempered by the economic crisis but committed projects remain on track. "US alone have planned
construction expenditures of US$85 billion on
new coal plants and environmental retrofits on existing ones. I believe most
of it will go through," he said.
Industry trends will see a focus on efficiency and fuel savings due to a
sluggish economy and history of high electricity prices. Krishnaswamy foresees
that products from light bulbs to turbines with these features will be in demand.
"Currently, low oil prices will be a challenge to justify some green
energy investments but the situation will change in the not too distant
future," he said. "Newly elected US President Barack Obama's final policy on
climate change and Kyoto Protocol will affect the energy & power sector
globally," he adds.
According to Krishnaswamy, the early part of 2009 may see renewable energy
projects suffer because of the death of debt financing brought on by troubles
at large green energy investors like Lehman Brothers, Wachovia, AIG, and
Merrill Lynch. He continues to say that it should pick up in the latter part
of the year, due to anticipated government support in form of affirmative policy and tax credits, making
alternate energy one of the few growth sectors
in 2009.
"Energy efficiency will continue to gain prominence across the end user sectors of industrial, commercial
and residential. Governments are likely to
support these measures because of avoided cost of asset creation in new
generation capacity and also proven benefit in terms of emission reduction,"
he added.
Other areas that may continue to show growth include alternate energy technologies such as solar and
fuel cells, metals like lithium and zinc used
in the development of energy storage technologies, clean coal research as a result of carbon tax by the new
US administration, and the biomass and waste
to energy sector.
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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.com
SOURCE: Frost & Sullivan
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