By Graeme Davies
Energy is one of the world’s largest industries but it also remains one of the fastest growing industries around, driven by rapid growth in demand in emerging markets as well as continued replacement and renewing of energy generation in the developed world.
It is in the emerging economies of Asia and Latin America that energy usage, and spending on new capacity, will grow most markedly and this represents an opportunity for companies who sell into the energy industries whether they be suppliers of equipment for extraction of fossil fuels, to energy generation equipment and even renewable power technologies. Even civil engineering specialists could benefit from increasing their exposure to emerging markets projects.
Closer to home it has been estimated that the UK will need to spend £200bn on its energy infrastructure in the coming two decades to update it. This will offer opportunities to energy services and supply chain specialists, for example on the expected construction of a new £8bn nuclear power plant as part of the Horizon project in Anglesey as well as the proliferation of renewable energy projects in Wales.
Energy statistics illustrate the opportunity available. According to oil giant BP, global energy consumption is forecast to grow by 1.6 per cent per annum between 2010 and 2030, giving a cumulative growth of 39 per cent and of this growth a massive 96 per cent will be in non-Organisation for Economic Cooperation and Development countries, ie. emerging markets. By this point, non-OECD countries will account for 69 per cent of global energy usage. The largest single fuel source will still be oil and coal will also play a major part, but both will decline in usage compared with gas, which will account for a growing proportion of energy production over the next 180 years.
In the developed world, consumption will barely grow as efficiency improves but there will also be opportunities here for technology providers who can supply into renewable energy and energy efficiency markets. By the end of the next decade hydro, renewables and nuclear combined will supply more energy than coal.
Closer to home, Welsh companies may benefit from initiatives such as the Marine Energy Research Group which is actively exploring ways of harnessing the wave power around the Welsh coast, indeed Tidal Energy Limited have plans to install a wave power device in Ramsey Sound next year.
Wales also has a strong history of hydro electric power generation and, in recent years, wind farms have sprouted in many places in the country as have waste to power facilities and there is also significant expertise in the handling and transportation of Liquefied Natural Gas from the facility at Milford Haven.
The Welsh Assembly has targeted a huge expansion of low carbon and energy efficiency job creation in Wales. Last year this sub-sector employed just 29,000 but estimates suggest 250,000 jobs could be created in the low carbon sector in the coming decade in the UK alone. And the government is supporting initiatives aimed at boosting job creation in local renewable industries, last year it committed £2m towards a £7m renewable energy training and operational centre planned by Scottish & Southern Energy at Treforest. And the Low Carbon Research Institute, formed jointly by several Welsh educational establishments is another signal of the desire to make Wales a hotbed of renewable energy and low carbon technology success.
The drive for greater energy efficiency, particularly in transport technologies, can also be a benefit to the Welsh economy, for example, GE’s plant at Nantgarw is testing advanced engine technology for airliners which is aimed at maximising fuel efficiency. Furthermore, the continued use of fossil fuels will also benefit Wales’ petroleum processing industries which export a significant amount of their production.