According to a new technical market research report, Global Markets for Renewable Energy (EGY049B) from BCC Research, the value of the global market for renewable energy was nearly $225 billion in 2010, but is expected to increase to $331 billion in 2015, for a 5-year compound annual growth rate (CAGR) of 8.1%.
The largest segment of the market, wind energy, is projected to increase at a CAGR of 6% to $87 billion in 2015, after being valued at an estimated $65 billion in 2010. The second-largest segment, hydroelectric energy, is estimated at $62 billion in 2010, but is expected to increase at a CAGR of 3.5% to reach nearly $74 billion in 2015. The solar energy segment will have the highest rate of growth in the next 5 years with a CAGR of 17.1%, rising from an estimated $44 billion in value in 2010 to $97 billion in 2015.
The biofuels segment will increase in value from $45 billion in 2010 to $60 billion in 2015, for a CAGR of 6%. The geothermal energy segment will experience a CAGR of 8%, increasing from $6 billion in 2010 to $8.8 billion in 2015. The smallest segment, energy derived from the ocean via tides, waves, or wind, will rise from $2.4 billion in 2010 to $4.4 billion in 2015, at a healthy CAGR of 12%.
Renewable energies as used in this report refer to sources of primary energy that can and do replenish themselves on a short-enough timeline that human use will not exhaust them. This closely parallels the common environmental classification of renewables as (non-nuclear) energies that do not increase anthropogenic contributions of greenhouse gases.
As the prices for some renewable energy sources get more competitive, suppliers will actually be forced to compete. As the price of natural gas has declined dramatically, the wind power industry especially will be challenged to find ways to lower prices, even as future projects point to offshore installations that are more expensive. Solar power, with its much larger customer and manufacturing base, will be able to respond more quickly, although declining prices and margins will be as tough for suppliers as declining volume of business is for the wind power industry.
The workhorse of renewable energy, hydropower, will continue to grow, in no small part because of contracts signed and financing secured before the recent recession. The environment for renewable energy is likely to be more challenging in the years ahead. Government stimulus funding throughout the world, which helped finance many capital-intensive renewable installations, is being replaced by deficit cutting, which will make government subsidies both smaller and less frequent. Governments will argue that their renewables policies were both correct and effective, as technologies have advanced, ecosystems of suppliers have developed, and costs have declined to something approaching parity with fossil fuels.
This report is intended for professionals at several levels working in the energy and/or environmental field. Although the report is structured around specific technologies, it is largely nontechnical in nature. That is, it is concerned less with theory and jargon than with what works, how much of the latter the market is likely to purchase, and at what price.