Market Assessment

Romeu Gaspar's picture
Six suggestions to leverage the growing renewable energy opportunities in emerging markets
Romeu Gaspar
Large-scale deployment of renewable energies has so far been concentrated in Europe and in the US, but that is changing. Take wind energy, solar PV and CSP (Concentrated Solar Power), for instance: 44%, 35% and 23%, respectively, of new capacity for the next 5 years will be deployed in emerging markets (Exhibit 1). For North American and European companies that have so far focused on domestic markets, emerging markets can thus represent an opportunity for additional revenue, but also a risk for increased costs and diluted market focus. In this article we explore six suggestions to develop and implement a sensible market entry strategy for emerging markets.
Exhibit 1 – Regional breakdown of cumulative and new capacity for wind energy, solar PV and CSP
Exhibit 2 – Example of a company for which market expansion was a necessity, rather than an option
Exhibit 3 – Example of a market strategy that balances domestic and emerging markets, as well as existing and new clients
Exhibit 4 – The Kingdom of Saudi Arabia’s KA-CARE Program
Exhibit 5 – An example of a niche market opportunity (green telecom towers in emerging countries)
Exhibit 6 – Example of a market entry strategy that combines economies of scale and global key accounts with local partners and local presence
Exhibit 7 – Example of a company benchmark and expert interview process
Exhibit 8 – Example of an expansion plan sanity check
Romeu Gaspar's picture
There is a clear link between corporate sustainability and financial results, but which one is the trigger? Well, the link can actually run both ways.
Romeu Gaspar
Little doubt remains about the correlation between improved sustainability practices and better financial results: Exhibit 1 compiles the results of close to 160 research papers, most of which found a positive correlation between these two benefits. But which one is the trigger? In other words, do better sustainability practices lead to improved financial results, or does the availability of funds lead to increased investments in sustainability? In this article we explore the issue of causality between sustainability and financial performance, and what it means for various stakeholders.
Exhibit 1 – Results of 159 studies from 1972 to 2008, analyzing the correlation between sustainability and financial performance
Exhibit 2 – Stock market returns of the CDLI and Global 500 indexes (2005-2012)
Exhibit 3 – Suggested virtuous cycle of good management, sustainable practices and increased financial performance
Exhibit 4 – Results of 159 studies from 1972 to 2008, analyzing the correlation between sustainability and accounting/market metrics
Exhibit 5 – Bi-directional correlation between sustainability and innovation
Exhibit 6 – Payback period for sustainability initiatives, as reported in 2012 by members of the Carbon Disclosure Project
Romeu Gaspar's picture
Recent developments in renewable energies might overthrow the diesel generator as the technology of choice for off-grid mobile base stations.
Romeu Gaspar
Renewable energy has evolved considerably over the last couple of years. So much, in fact, that solutions recently deemed to be unfeasible might now warrant a second look. Take mobile telecom operators, for instance: diesel generators are usually preferred over renewable energy based solutions for remote off-grid base stations, because they are cheaper and more reliable. In this article we explore three recent developments that might tilt the balance in favor of telecom towers powered by renewable energy.
Exhibit 1 – 2008-2017 mobile telecom subscriptions, by region
Exhibit 2 – Example of a base station powered by a diesel generator (left), and one integrating solar PV (right)
Exhibit 3 – 2001-2012 PV module spot prices
Exhibit 4 – 2012-2018 market value for micro-grids, by region
Exhibit 5 – 2012-2021 market value storage for systems, by technology
Exhibit 6 – 2010-2020 US market value for ESCO services, by application
Cátia Carias's picture
Download our 12 most read articles from 2012
Cátia Carias
2012 has been a great year for us. Not because we have grown considerably: X&Y Partners is and will continue to be a small company. And not because there were significant advances in the areas we work on: renewable energies and clean technologies continue along a fast but somewhat rocky path; policies to address climate change are still timid; and the bulk of the work towards a more sustainable development still lies ahead us. 2012 was a great year for us because we took a decisive step towards sharing our knowledge.
Romeu Gaspar's picture
Forecasting is about the journey, not the destination: what you learn in the process will be more useful than the forecast itself.
Romeu Gaspar
We are often asked to make market forecasts, so we decided to go back to some of our older forecasts and see how well we fared. We found that most forecasts had a fair 15-20% deviation from the actual figures (Exhibit 1). There were however outliers: on the one hand, we overestimated the global installed capacity of wave energy by an order of magnitude, while on the other hand we predicted the evolution of wind energy costs inside a 5% margin. In any case, the real value of forecasting is what you learn in the process, as it forces you to understand and quantify the forces that shape a particular market. In this article we share four lessons learned while making market predictions and forecasts.
Exhibit 1 – Comparison of several 5-year forecasts with actual market data
Exhibit 2 – Example of a Delphi method applied to estimating the LCoE of several PV, CSP and wind energy specific plant configurations
Exhibit 3 – Example of using the historical early wind energy deployment as a sanity check for a bottom-up forecast for wave energy deployment
Exhibit 4 – Comparison of three scenarios for the evolution of carbon credit prices with the actual market prices
Exhibit 5 – Example of a Monte-Carlo simulation applied to the valuation of a CSP plant
Romeu Gaspar's picture
Innovation does not need to be cutting edge, it only needs to solve a problem: three reasons why wind energy is borrowing solutions from the construction sector.
Romeu Gaspar
The global onshore wind sector is expected to grow 19% per year till 2015. Not as much as it has grown in the past (28% per year from 2006 to 2011) but still very respectful for a sector that is rapidly approaching market maturity (Exhibit 1). One of the key drivers fueling this growth is LCoE (Levelized Cost of Energy) reduction, either by improving efficiency or by decreasing costs. Concrete towers do not contribute to the former, but can contribute to the latter. Read on.
Exhibit 1 – 2006-2015 global wind power installed capacity (GW)
Exhibit 2 – Cost breakdown and impact on system performance for the main components of an illustrative Wind Turbine Generator (WTG)
Exhibit 3 – Illustrative industry maturity curve for wind towers
Exhibit 4 – 2011-2015 market share forecasts for steel, hybrid and concrete towers
Exhibit 5 – 2005-2010 average new installed turbine capacity per country
Exhibit 6 – Sample of current offering of turbine-tower combinations
Exhibit 7 – Historical evolution of US iron ore and precast concrete prices
Exhibit 8 – 2011-2015 new installed capacity breakdown per region
Exhibit 9 – Enercon’s precast concrete mobile factory in Gujarat, India
Exhibit 10 – 2011 supply vs. demand capacity for major wind park components
Catarina Veiga's picture
Yes, but probably not just yet. The latest iterations of the venerable internal combustion engine are still competitive, both from an environmental and an economical standpoint.
Catarina Veiga
The forecasts for global electric vehicle (eV) sales are undoubtedly ambitious – 2 million vehicles sold by 2020 – which reflects the high hopes that both manufacturers and governments are placing on this technology. So far, actual sales have been somewhat lackluster: in 2011 approximately 44.000 electric vehicles were sold, instead of the expected 66.000 units (Exhibit 1). It is not yet an immense difference, but it does raise some questions about the feasibility of the 2020 goal. In this scenario, should you, as a consumer or someone responsible for a company car fleet, buy an electric car?
Exhibit 1 – Global electric vehicle sales forecast for 2010 – 2025 (excludes electric scooters and bicycles)
Exhibit 2 – Comparison between the carbon footprint of a Volkswagen Golf 2.0 Diesel and a Nissan Leaf, for several countries
Exhibit 3 – Fuel consumption for eight vehicles in the same segment as the Volkswagen Golf
Exhibit 4 – Environmental and economical cost comparison for the Nissan Leaf, Volkswagen Golf and BWM Series 1, for Portugal and Germany
Exhibit 5 – Savings/costs of choosing a Nissan Leaf or a BMW Series 1 over Volkswagen Golf
Romeu Gaspar's picture
How the cycling industry is shaping up for growth by addressing the demand for active lifestyles better than any other sport
Romeu Gaspar
There are not a lot of sports where you can buy a product that is better than what the pros use. Amazing as that is, the cycling industry’s biggest revolution is not based on exotic materials and high-tech designs, but rather on a smart marketing move: by placing the bicycle in the center of an open-to-all, inclusive experience, the cycling industry is addressing the generalized trend for active lifestyles better than any other sport.
Exhibit 1 - Results of the UK Taking Part survey (2005-2011)
Exhibit 2 - Sales evolution for major bicycle segments at an illustrative Specialized retailer
Exhibit 3 - Impact of cycling in the British economy (M£)
Exhibit 4 - Number of news related to mergers & acquisitions in the cycling industry