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dam-l Financial Times on Alternative Energy Growth/LS
Financial Times, London
FT Survey, Power Generation Equipment
June 20, 2000
http://www.ft.com/ftsurveys/industry/sccca6.htm
ENVIRONMENT: The alternative forms move into
the mainstream
Worries about potential environmental damage
mean that ways of producing electricity through methods other
than burning fossil fuels are no longer being regarded as marginal but
are receiving unprecedented attention. Reports Peter Marsh
As a new convert to the cause of wind
energy, Torben Bjerre-Madsen believes
that this form of power
generation offers some "fantastic" opportunities.
Mr Bjerre-Madsen is
president of NEG, Micon, a large Danish
maker of wind turbines which, with
Vestas, also of Denmark, is one of the
two biggest companies in this field.
A few years ago, businesses such as this
would have been regarded as highly marginal in
the business of power generation.
However, wind energy and other ways of
producing electricity through methods other than burning fossil fuels are
now receiving unprecedented attention because of worries
about the environmental effects of traditional power stations.
Last year, 4GW of wind energy projects were
installed across the world, three quarters of this in Europe. This is tiny
compared to the 50GW to 70GW of large turbine-based generators that
were installed over the same period, most of these fired by gas, coal or oil.
The world's total capacity for generating
electricity by using the power of the wind is about 12GW. This is a far cry
from the world's total generating capacity of 3,500GW.
However, projections for the next few years
indicate that wind powered systems could take up a fast growing share of
the world's electricity requirements, the increase driven largely by
concern about the need to reduce emissions of pollutants and carbon
dioxide (the main greenhouse warming gas) from conventional
power stations.
While electricity from wind turbines today
generally requires hefty public subsidies to make it economically viable, many
in the industry believe that improvements in wind turbine technology
will gradually cut the costs of producing power through this means,
assuming that the generators themselves can be sited in parts of
the world that are subject to windy weather.
Among the optimists is Mr Bjerre-Madsen, who
joined NEG only last year from FKI, the UK engineering company. "I
am fascinated by the idea of green energy and the growth rates that
seem possible," he says.
With NEG having achieved sales last year of
E650m, Mr Bjerre-Madsen believes that a turnover of E1.5bn is possible
five years from now. "There is a lot of interest around the world -
not just Europe but the US, Japan, India and China," he says.
Earlier this month, wind energy optimists were
joined by Goran Lindahl, president of ABB, the Swiss engineering group.
He unveiled plans to increase ABB's sales from renewable and other
small scale energy projects from $400m in 2000 to $1.4bn in 2004,
largely driven by a high-efficiency form of wind turbine that ABB
has devised.
According to Mr Lindahl, this makes it
possible to produce electricity from the wind at a 4 cents/kilowatt-hour - a
price that is broadly comparable with large fossil-fuelled power stations.
Wind energy looks the most promising of the
various ideas for tapping renewable energy sources to take up more of
the burden of producing electricity. The best established method is
through hydro-electric processes, in which the power of water
(normally falling from the tops of dams) drives a turbine.
Hydro-electricity is very much part of the
energy scene already, with 10GW to 20GW of new hydro-electric schemes
having been ordered on average each year over the past decade.
However, many believe that hydro-electricity
may not necessarily be the best answer in the future, because of the cost
involved in building dams and reservoirs, as well as the negative
environmental effects of flooding large areas of countryside in order
to build them.
One company which attaches a great deal of
importance to renewable energy technologies is Babcock Borsig
(formerly Deutsche Babcock), a German engineering group. The company owns
Nordex, a wind turbine producer, and has other energy interests,
including bio-mass fuelled electricity stations, which burn vegetable
matter to produce power.
Babcock Borsig's energy division has annual
sales of some DM800m, of which 60 per cent is associated with
renewable power. Hans Fechner, chairman of the division, says that
the promising growth prospects for many projects linked to
renewables mean that by 2005 the company has "a good chance of reaching a
turnover of DM2bn".
Also tapping widespread interest in new forms
of energy production is Umwelt Kontor, a German company due to float
publicly later this year, which offers a service in installing large
projects based around renewable sources such as wind or solar energy.
"I see a lot of business opportunities for us
as interest in these ideas increases," says Heinrich Lohmann, a director
at the company. "We are aiming for sales of DM100m this year from
DM35m last year and want to reach DM300m by 2001."
While corporate interest in solar energy has
increased markedly in recent years - with large companies such as
BP, Kyocera (the Japanese ceramics manufacturer) and Siemens of
Germany spending heavily on technical development - producing
power from converting the sun's radiation into electricity through
solar cells is still much more expensive than through conventional means.
However, hopes are high that technical
breakthroughs in solar-panel manufacturing will start to reduce the costs
in the next decade.
Leaders in this field include Astropower, a US
company which claims to have invented a low-cost manufacturing method,
and Energy Conversion Devices, which recently formed a
joint venture on solar cell production with Bekaert, a Belgian company
that is the world's leading producer of wire rod and is keen to diversify.
© Copyright The Financial Times Limited 2000. "FT" and "Financial Times"
are trademarks of The Financial Times.
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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