Released December 01, 2017 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--In this week's webinar presented by Industrial Info on global spending trends in the Power Industry, Britt Burt, Industrial Info's vice president of global Power Industry research, discussed the spending outlook for global regions in 2018 and 2019. East Asia leads the world, with $368 billion in projects that are currently under construction, followed by Europe with $211 billion and North America with $115 billion. Global demand for power and changing fuel types are driving project activity.
When asked whether the world is seeing growth in projects at the planning and engineering stage, Burt said, "Absolutely. The power industry continues to be one of the more aggressive industries in terms of investment. There's such overall demand growth around the world that we continue to see a lot of new project activity moving forward in the form of new generation. ... Overall spending, in terms of dollars--that's down a little bit, but overall we're still seeing healthy spending for the Power Industry." There is $3.05 trillion in Power Industry project activity planned in 2018-19, with new-build projects accounting for $2.7 trillion.
U.S. and Canada
In the U.S. and Canada, renewables account for more than $106 billion in planned project activity in 2018-19, although a significant portion of this could fall out (be placed on hold or cancelled). In the U.S., renewables are being driven largely by the wind Production Tax Credit and solar Investment Tax Credit, which provide tax subsidies for new wind and solar projects. Whether these credits remain in place for their planned duration remains to be seen, however, as Burt said these could be changed or scrapped under tax reform proposals from the Trump administration.
Natural gas accounts for more than $63 billion in projects to begin construction in the region in 2018-19. Burt said, "Natural gas ... is being driven by the fact that we've closed a lot of the coal facilities, and still more on the horizon are scheduled for closure. And so natural gas has been the fuel of choice to replace capacity there." Burt pointed out that no new-build nuclear or coal-fired capacity is planned to kick off in the U.S. and Canada in the next two years.
South America and Mexico
Renewables spending reigns in South America and Mexico combined, with more than $187 billion in hydro, solar and wind projects planned over the next two years. "If we look across Latin America, we are seeing aggressive development of renewable projects across the region--solar, wind, hydro--and it's widespread," said Burt, who also noted that project spending in the natural gas-fired sector was strong in the region. "We're seeing a lot of natural gas development in Argentina, Chile, Panama and certainly in Mexico as well," he said. Burt noted that Argentina also is developing nuclear assets, and that Mexico is in the early stages of potential nuclear projects.
Europe
Wind power dominates European project spending, with $199 billion in projects planned to kick off in 2018-19. Burt said that as new liquefied natural gas (LNG) import and regasification facilities come online, natural gas-fired spending would pick up.
East Asia
East Asia is the largest area for spending activity over the next two years. Burt said that there has been a great deal of fallout for planned coal-fired projects in East Asia. China, in particular, has cancelled more than 100 gigawatts (GW) of coal-fired projects in recent months. Burt said natural gas capacity was gaining in popularity as infrastructure was built out.
Western Asia
Western Asia includes the Middle East and Turkey, which represents about $122 billion of the total $241 billion two-year pipeline in the region in 2018-19. In Turkey, $40 billion of coal projects are planned to begin construction during this time, as well as $48 billion of the region's $58.8 billion of nuclear. Burt said, "Turkey imports 99% of their natural gas, so natural gas really isn't a good option for them to meet future demand. Coal, nuclear and renewables are good options for them, so that's why you see so much activity being proposed there."
South Asia
In South Asia, India is putting forth some big numbers and big plans, but the country's proposed projects are often sluggish to get underway. Burt said large investments were expected to happen for air emissions projects for most of the country's coal-fired facilities. "India has a very ambitious plan to add renewable energy," said Burt. "Most of that is solar. They have plans to add 175 GW of renewable energy by 2022. I think that's overly optimistic; I'm not sure all of that is going to move forward. One hundred GW of that is solar."
Conclusion
In general, renewables continue to make a great leap forward throughout the world. While demand growth may not be strong in places like North America and Europe, it is very strong in other parts of the world, fueling project activity. Environmental compliance projects continue to be a strong driver of spending. Emerging technologies such as battery storage and microgrids continue picking up pace.
Industrial Info regularly presents webinars throughout the year on a variety of industrial topics. To access past webinars, visit our Market Outlook Library, which also includes live presentations in front of audiences at tradeshows and other venues.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
When asked whether the world is seeing growth in projects at the planning and engineering stage, Burt said, "Absolutely. The power industry continues to be one of the more aggressive industries in terms of investment. There's such overall demand growth around the world that we continue to see a lot of new project activity moving forward in the form of new generation. ... Overall spending, in terms of dollars--that's down a little bit, but overall we're still seeing healthy spending for the Power Industry." There is $3.05 trillion in Power Industry project activity planned in 2018-19, with new-build projects accounting for $2.7 trillion.
U.S. and Canada
In the U.S. and Canada, renewables account for more than $106 billion in planned project activity in 2018-19, although a significant portion of this could fall out (be placed on hold or cancelled). In the U.S., renewables are being driven largely by the wind Production Tax Credit and solar Investment Tax Credit, which provide tax subsidies for new wind and solar projects. Whether these credits remain in place for their planned duration remains to be seen, however, as Burt said these could be changed or scrapped under tax reform proposals from the Trump administration.
Natural gas accounts for more than $63 billion in projects to begin construction in the region in 2018-19. Burt said, "Natural gas ... is being driven by the fact that we've closed a lot of the coal facilities, and still more on the horizon are scheduled for closure. And so natural gas has been the fuel of choice to replace capacity there." Burt pointed out that no new-build nuclear or coal-fired capacity is planned to kick off in the U.S. and Canada in the next two years.
South America and Mexico
Renewables spending reigns in South America and Mexico combined, with more than $187 billion in hydro, solar and wind projects planned over the next two years. "If we look across Latin America, we are seeing aggressive development of renewable projects across the region--solar, wind, hydro--and it's widespread," said Burt, who also noted that project spending in the natural gas-fired sector was strong in the region. "We're seeing a lot of natural gas development in Argentina, Chile, Panama and certainly in Mexico as well," he said. Burt noted that Argentina also is developing nuclear assets, and that Mexico is in the early stages of potential nuclear projects.
Europe
Wind power dominates European project spending, with $199 billion in projects planned to kick off in 2018-19. Burt said that as new liquefied natural gas (LNG) import and regasification facilities come online, natural gas-fired spending would pick up.
East Asia
East Asia is the largest area for spending activity over the next two years. Burt said that there has been a great deal of fallout for planned coal-fired projects in East Asia. China, in particular, has cancelled more than 100 gigawatts (GW) of coal-fired projects in recent months. Burt said natural gas capacity was gaining in popularity as infrastructure was built out.
Western Asia
Western Asia includes the Middle East and Turkey, which represents about $122 billion of the total $241 billion two-year pipeline in the region in 2018-19. In Turkey, $40 billion of coal projects are planned to begin construction during this time, as well as $48 billion of the region's $58.8 billion of nuclear. Burt said, "Turkey imports 99% of their natural gas, so natural gas really isn't a good option for them to meet future demand. Coal, nuclear and renewables are good options for them, so that's why you see so much activity being proposed there."
South Asia
In South Asia, India is putting forth some big numbers and big plans, but the country's proposed projects are often sluggish to get underway. Burt said large investments were expected to happen for air emissions projects for most of the country's coal-fired facilities. "India has a very ambitious plan to add renewable energy," said Burt. "Most of that is solar. They have plans to add 175 GW of renewable energy by 2022. I think that's overly optimistic; I'm not sure all of that is going to move forward. One hundred GW of that is solar."
Conclusion
In general, renewables continue to make a great leap forward throughout the world. While demand growth may not be strong in places like North America and Europe, it is very strong in other parts of the world, fueling project activity. Environmental compliance projects continue to be a strong driver of spending. Emerging technologies such as battery storage and microgrids continue picking up pace.
Industrial Info regularly presents webinars throughout the year on a variety of industrial topics. To access past webinars, visit our Market Outlook Library, which also includes live presentations in front of audiences at tradeshows and other venues.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
