As the year begins to draw to a close, it is reassuring to see that all sectors across the energy supply chain are now showing signs of a sustained recovery. The latest data from EIC Monitor; a quarterly index that tracks the 7500 most important active and future projects across the global energy industry, reveals that the power sector is leading the way in the economic recovery, with the renewable energy and downstream sectors also showing strong growth.
The latest quarterly report (EIC Monitor Q3 2009: July – September) shows that there have been 462 new projects across the global energy supply chain with a total value of US$ 360 billion, compared to 325 in Q2 2009 totalling US$ 238 billion and 439 new projects in Q3 2008 worth US$ 575 billion.
Nuclear, conventional power and renewables
Overall, the power sector has experienced a surge in new projects during the last quarter. There have been 142 new projects totalling US$ 166 billion, with a total capacity of 98 GWe in Q3 2009. The total value of new projects this quarter is up 49% on Q2 and generating capacity of these projects is up 45% on Q2.
Hotspots of activity this quarter can be seen in India, the USA and Italy. Significant projects include the proposed Gujarat Nuclear Power Project in India valued at US$ 17 billion; the Green Power Express Transmission Project in the USA (US$ 12 billion); and the Italian Nuclear Power Project valued at US$ 12 billion.
EIC Monitor shows that renewable energy projects are up for the third successive quarter in terms of number, value and capacity of new projects. The value of the 109 new projects this quarter, is up 38% from US$ 66 billion to US$ 92 billion with a total capacity of 29 GWe.
Only last quarter we saw the first green shoots of recovery in the renewable energy and power sectors and these are continuing to be boosted by a growing commitment from government and industry to cleaner and more secure energy supplies. With the recent UK Government plans to fast track a new generation of nuclear power stations, the future prospects for the UK power sector in general look bright.
One of the high value global projects on the radar this quarter is a 7 GWe hydroelectric project in Pakistan worth US$ 15 billion.
Downstream, midstream and upstream sectors
The downstream sector is showing its first solid signs of recovery this year with the total value of new projects rising from US$ 22 billion in Q2, to US$ 54 billion in Q3, although still significantly down from US$ 149 billion in Q2 2008. There are 71 new projects this quarter, the largest being a proposed US$ 6.5 billion refinery and petrochemical complex in China; a proposed US$ 6 billion oil refinery in Ghana and an NGL (Natural Gas Liquids) recovery facility in Saudi Arabia valued at US$ 5 billion.
The midstream sector has performed better than last quarter with 47 new projects totalling US$ 21 billion compared to US$ 16 billion in Q2 2009. The upstream sector has experienced a more modest rise, from US$ 24 billion to US$ 27 billion in Q3 2009.
As oil prices continue their upward trend, we would expect the upstream sector to improve correspondingly during the coming months. EIC Monitor shows that recovery is already on its way, although the continued turmoil in the financial markets may still have an impact on future project funding. Indeed, even in the resurgent power sector we are continuing to see a number of large scale projects in Europe being cancelled due to financial and legislative issues. Overall though, there are clear signs for optimism and prosperity across the energy industry as we look forward to the year ahead.
By Mike Major, CEO, The EIC