The Renewable Energies Business Group's markets

Booming energies

The "World Energy Outlook 2008" report from the International Energy Agency forecasts a radical change in energy provision between now and 2030, with a market share of nuclear and renewable energies which reached over 40% and 20% respectively in 2006.

This trend was confirmed in 2008, when the share of new renewable electricity production methods exceeded the share held by fossil fuel energies with more than 40 GW installed.

While in 2008 around 4% of the energy combination came from renewable sources, excluding hydroelectric, today, governments the world over have defined objectives of up to 15 to 20% by 2020.

Investment in this industry will continue to increase: 130 billion dollars invested on average each year between 2008 and 2030.

Three major areas of growth on a global level

Europe

The European market is driven by the EU's political will to develop renewable energy, with ambitious medium-term objectives: 20% of total energy consumption in 2020 should be produced through renewable energy.

To reach these objectives, each European country has implemented a number of measures aimed at increasing interest among various sources of renewable energy, including the production of energy through biomass.

Among these measures, we have government calls for tenders including:

• A specific electricity retail price for investors (e.g.: in France),
• Special prices for electricity generated using biomass (e.g.: in Italy)
• Green certification enabling electricity produced through renewable energy to be promoted (e.g.: in Belgium).

As part of the preparation for the European Commission's 2050 Vision, to be published in 2010, the association of European electricity companies, Eurelectric, has just published its own study - "Paths to carbon-neutral electricity". Using various hypotheses, total electricity production should move from 3100 to 4800 TWh. All possibilities are being explored to participate in this production, with 38% of renewable energy assets, including 12% onshore and 9% offshore.

AREVA is developing power plants with investors seeking to penetrate this market, which should switch from 72.3 MTep (ton of oil equivalent) in 2005 to 149 MTep in 2010.

North America

Over half of the States have passed a law imposing a quota of at least 12% of electricity production from renewable energy by 2020. This quota, known as the "Renewable Portfolio Standards" (RPS), is a real opportunity for growth and the development of renewable energy in the United States. The US has the biggest market of onshore wind turbines and stands to become a major player in the solar power market, with over 50% of solar reserves.

The United States has good potential to develop offshore wind farms, amounting to a production of 430,000 MW. Experts forecast an installed production capacity of 6000 MW by 2020.

Most biomass business uses wood as a fuel, representing 60,000 MW of the installed production capacity. According to forecasts made by the International Energy Agency (IEA) and other experts, this capacity could double within the next ten years.

Emerging countries

India, Brazil, China, African countries etc. also represent growth niches for renewable energy, often due to the availability of low cost resources (biomass in Brazil or India, sun in Saharan regions etc.).

With significant levels of agricultural waste. Latin America is one of the most active regions for the development of bioenergy. The installed capacity of biomass power plants should grow significantly, reaching 10 GW in 2015.

Brazil is the main leader in biomass. Production should double, despite the constraints imposed by the government on cane cultivation, within the scope of new environmental laws. This can be explained by the renovation of almost 80% of power plants using bagasse, in order to improve their yield. Other resources will also contribute to this growth such as wood and household waste. The total production capacity reaches around 70 GW.

The bioenergy market is also being developed in Chile, Uruguay, Colombia and Argentina. Incentives have been put in place, such as the Proinfa program in Brazil, and the Proure program in Colombia. Similar initiatives are also in place in Chile and Uruguay. The main opportunity currently comes from the increase in energy prices, which enables the production of electricity from bioenergy to become competitive without any incentives.

In the field of solar and hydrogen, India is showing prospects for significant development in bioenergy. The potential estimated by the Ministry for New and Renewable Energy amounts to 20 GWe, while the installed capacity in 2007 was 1.4 GWe. India is also an access platform for countries with high potential in South East Asia. India has low purchasing costs associated with first class engineering.

China has signaled its desire to promote and develop renewable energy. Almost 20% of the energy mix is set to come from renewable energy by 2020. This includes: hydraulic energy, wind energy, biomass and photovoltaic solutions. In 2008, China positioned itself as the second biggest wind energy producer in the world. Among the most developed economic regions, the province of Jiangsu is to build the first Chinese offshore wind farm with a capacity of 10 MW. AREVA has entered into discussions to support the development of the offshore wind energy industry.

Four markets with significant potential in the short or medium term

The wind energy market

Europe remains the main wind energy market, with 60% of global installed facilities. At the end of 2008, offshore wind energy in Europe represented almost 1.5 gigawatts (GW) and numerous offshore wind farms were launched, representing an additional 37 GW of power.  By 2015 the annual growth should have reached 3 to 5 GW.

• In Germany, statutory conditions promote the development of offshore wind farms. Almost 32 projects have been authorized, representing 10 GW of power.
• The United Kingdom also has a very promising market with 8 GW expected by the end of 2014.

AREVA is the only industrial operator to have a high power M5000 wind turbine (5 MW) specially designed for offshore usage. And what is more, the group acquired a German manufacturer of rotor blades in late 2009 - a crucial part of the industrial value chain: nearly 250 AREVA M5000 turbines have been chosen to equip European offshore wind farms.

The bioenergy market

Although the biomass reactor system uses tried-and-tested technologies, the market still remains fragmented due to the large number of players involved and the geographical remoteness of the resources used.

AREVA:

• Holds 40% of the Brazilian market (exploiting bagasse)
• Is aiming for 20% of the American market (exploiting wood waste)
• Hopes to hold 5% of the global market in 2012.

The group is one of the rare players in the biomass industry to carry out large scale projects and to offer innovative financing solutions.

In global terms the installed biomass energy power is almost 62 GW and is set to increase by 6 to 9% over the next five years.

The solar power market

CSP (concentrated solar power) will experience very significant growth, with an average annual growth of 18% (source: International Energy Agency):

• 400MW of equipment for thermodynamic solar power was installed in 2007
• More than 1000 additional MW in 2009
• 9000MW are anticipated in 2012

Supported by progressive governmental incentives and climate change goals, the CSP market is expected to experience one of the strongest growths of all the Renewable Energy segments over the coming decades. An average annual growth rate of 20% is forecasted, and the market should reach an estimated installed capacity of over 20 GWe by 2020.

Solar energy is currently developing, in particular, in industrialized countries with plenty of sunshine and where it is subsidized by public funding. For example: the south western United States, the Middle East and in Mediterranean countries. Australia, Africa, India and China also represent markets with great potential.

The hydrogen and energy storage market

Today hydrogen is widely used in the petroleum and chemical industries. It is set to play an ever more important role in the future, linked with the strengthening of environmental standards, the increasingly heavy use of petrol will require more hydrogen for its refining etc.

The CO₂ free, large-scale and decentralized production of this hydrogen has become a major issue in the fight against climate change. The market is confined to where the industrial petrol and chemical conversion facilities are located.

With regard to the fuel cell, this is an up and coming technology for which the markets are relatively new. In particular the market includes a market for used cells for industrial application demonstration projects such as coupling with renewable energies or standby systems.