The latest EIC Monitor tracking new active and future projects across the global energy industry shows a slight downturn this quarter (Q4:October – December 2010), with the total value of project announcements down nearly 8%.
This can largely be attributed to the potential investment value of new projects in the power sector having fallen by 53%. However, reassuringly the EIC Monitor reveals that the renewables, upstream and downstream sectors have all seen good growth both in number of projects and in potential investment value.
The total number of new projects has remained almost static since last quarter but is significantly higher than for Q4 2009. Potential investment value has also remained virtually static compared to the same quarter in 2009. In Q4 2010 there were 425 new projects across the global energy supply chain with an estimated total value of US$ 281 billion, compared to 423 in Q3 2010 totaling US$ 305 billion and 351 new projects in Q4 2009 worth US$ 273 billion.
Global power projects
There have been 96 new projects in the power sector totaling US$ 61 billion in Q4 2010.
In comparison there were 136 new projects totaling US$131 billion in Q3 2010 and 106 new projects totaling US$ 95 billion in Q4 2009.
The Far East nations feature heavily with Vietnam, Singapore, Thailand and Indonesia accounting for more than a quarter of new power projects valued at US$ 12.5 billion. India has 10 new thermal power projects with a combined value of US$ 12.6 billion. By contrast, Europe has very few new large thermal projects this quarter. Electricity market reform discussions and a continued legislation drive towards low carbon generation in many Western European countries is causing reluctance among operators and developers to commit to new investment until more clarity and certainty exists in the sector.
In the renewables sector, there have been 135 new projects totaling US$ 96.7 billion in Q4 2010. In comparison there were 123 new projects totaling US$ 74.5 billion in Q3 2010 and 104 new projects totaling US$ 72.3 billion in Q4 2009. There are 37 new solar-based projects including the Northern Cape Solar Project in South Africa valued alone at US$ 20 billion. The USA has 23 new renewables projects with a combined value of US$20.5 billion. Germany has announced three new offshore wind projects with a total capacity of 2,155MW and a combined value of US$ 9.9 billion.
Upstream, midstream and downstream sectors
In the upstream sector this quarter there have been a notable recovery with 74 new projects totaling US$ 41.16 billion. This represents a 54% increase in the number of new projects and an 84% increase in potential investment value on last quarter’s report. South America dominates with almost 50% of the total sector new project value. Brazil has five new projects totaling US$8.95 billion and Venezuela has the largest single new project in the US$ 10 billion Junin 8 Oil Block (Orinoco Heavy Crude Belt).
The midstream sector has seen a small drop this quarter in the number of projects together with a 26% decrease in project value (US$ 21.7) billion since Q3 2010. The USA and China account for 25 of the 55 new projects and one third (US$ 7.08 billion) of the total sector value. China has announced six new gas storage projects. The largest new projects are the Azerbaijan to Georgia Gas Pipeline (US$ 3 billion) and the Freeport LNG Terminal (US$ 2 billion) in the USA.
In the downstream sector, the number of new quarterly projects (65) has increased by 22% since Q3 2010 with a similar 25% rise in the total investment value that stands at US$ 59.9 billion. China, India and the Middle East account for over half the new projects. China alone accounts for over half the total new project investment value and also has the largest project, the Guizhou Coal to Liquids (GTL) Plant valued at US$ 11 billion. There were 14 new chemical and petrochemical projects announced in China during Q4 2010.
While it is disappointing to see a dip in new power projects this quarter, this is countered by growth in the renewables, upstream and downstream sectors and highlights that the global energy industry remains buoyant.
Author: Mike Major, CEO of the EIC
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