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Renewable Energies — Innovation and Global Opportunity 

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By Mona Pearl

The workforce and innovation garner investment.

One of the most rapidly emerging global trends is the growth of environmental and sustainable engineering technologies. A growing consciousness about the value of protecting our world will fuel the demand for products and services that can accomplish this goal.

Scanning the world, who are the leaders in renewable energy? How do we define their leadership? Based on the countries with the most patents and inventions? Or are we going to anoint the ones that actually follow and use renewable energy and resources to preserve the environment?

There is a lot of hype about the sustainability and energy savings with renewable energy, but how can we interpret and apply it to a global market? Companies are working on ways to save, and countries are adjusting and adapting policies, but how can companies align themselves with global opportunity and apply their technologies to the appropriate markets? 

Renewable energy will not run out. Ever. Other sources of energy are limited and will someday be exhausted. Diminishing natural resources and rising temperatures will make it necessary for businesses and governments from around the world to combine forces and work collaboratively to solve future shortages of water, energy and food.

Renewable energy is a trend that will affect global politics, relationships and the balance of power. It is another source for jobs, income and economic growth as technologies developed and built in one country can be sold globally. 

In Poland, where SolarWind is about to embark on renewable energy projects, the company faces the reality that although the country and projects themselves are attractive for investors, they still heavily depend on the government to establish the ground rules and make the country investor friendly.

Top Countries Using Renewable Energy

Policy is a major concern for renewables investors, even in the top 10 countries that are using renewable energies and are responsible and responsive to preserving the future. These factors make it even more complex in less developed nations, where transparency is a major obstacle, as well as the legal environments, financial climates and other national policies. 

As a source of reference, visit www.ey.com and view the Renewable Energy Country Attractiveness Index. Published by Ernst & Young, the index outlines the leading countries by macro drivers (ease of doing business); energy market drivers (bankability of renewables); and technology-specific drivers (wind, solar, other). Many of the leading countries feature an open economy, and structured legal, social and financial systems. The top five countries include the United States, China, Germany, the United Kingdom and Japan. Australia, Canada, France, India and Italy round out the top 10 countries.

The index also found a gap between countries that are the top innovators compared to countries that are producers or users. The underlying reasons are basically cultural. Countries that have more of a long-term orientation in their thinking, planning and life’s virtues and values, are more inclined to invest in the future, and think and act about tomorrow.

Below is a list of the top 10 countries in regard to green-tech patent intensity. They are based on cumulative patents per capita from 1990-2010, published in 2012 by the Batten Institute at the Darden School of Business at the University of Virginia.

1.     Germany

2.     Japan

3.     Denmark

4.     Switzerland

5.     Taiwan

6.     United States

7.     Netherlands

8.     Norway

9.     Sweden

10.  South Korea

What’s more, according to a report issued in 2012 by the Natural Resources Defense Council, the U.S. Energy Information Administration, and Bloomberg New Energy Finance, the top five countries in the G20 for renewable energy production are:

1.     Germany

2.     EU-27

3.     Italy

4.     Indonesia

5.     United Kingdom

Since 2010, the following markets have experienced some PV market development: China, Australia, India and Israel. Several others are expected to grow rapidly this year and in 2014: Mexico, South Africa and Chile.

Exploring Renewables Investments

SolarWind Projekt is a European project development company for wind power and solar power plants and rooftop installations.  Headquartered in Germany, with representation in the United States, SolarWind is involved in projects globally. SolarWind is acquiring suitable areas for wind power, photovoltaic fields and photovoltaic rooftops, as well as implementing the technology to save energy and create a sustainable environment.

Iddo Uphoff, co-founder of the company, elaborates on the global challenges when planning and implementing a project in diverse markets and national cultures: 

On one hand, SolarWind is leading all aspects of project development, such as: licensing agreements, wind measuring equipment and devices, grid connection and related contracts, the permit process, marketing of the electric production, efficiency analysis, financing costs and investment partners. On the other hand, to realize success, SolarWind, has to deal from the get-go with a country’s variousenvironmental regulations, representatives from local governments and skeptics as well as to avoid impairments for residents.”

In Poland, where SolarWind is about to embark on renewable energy projects, the company faces the reality that although the country and projects themselves are attractive for investors, they still heavily depend on the government to establish the ground rules and make the country investor friendly.

The Polish Ministry of Economics is standing at a crossroads, about to make the leap and move toward a larger scale focus on renewable energy for the country, and therefore, increase economic development; or due to political constraints, simply go back in time and put everything on hold. “We are looking forward to a feed in tariff (FIT) or a stable quota system for renewable energy in 2014 and I’m convinced,” Uphoff says, “that the Polish Ministry of Economics will turn their drafts into a law for RE which is including planning security and investment protection.”

“I’m very proud to be the first to bring SolarWind into the Polish RE market,” adds Gerriet Arndt, CEO, SolarWind.

Next Up: Grid Parity

According to published materials from the European Photovoltaic Industry Association (EPIA), grid parity is being used in many regions of the world. The total usage and installed capacity of renewable energy are larger than nuclear power plants. The plans for building new nuclear power plants became actually economical unmarketable. The cost for renewable energy is decreasing continuously, but the access to it is, especially in underdeveloped areas without adequate electric supply/infrastructure, often undeveloped and expensive. Also, it is usually the case that in countries which have created stable legal conditions for implementing renewable energy, system prices fall very rapidly in line with the development of the supply chain.

The EPIA’s “Unlocking the Sunbelt Potential of Photovoltaics” report is aimed at paving the way for the development of PVs outside initial developed markets. The development of PVs was estimated according to two sets of drivers: the attractiveness of PVs for the country and the attractiveness of the country for investors.

Since 2010, the following markets have experienced some PV market development: China, Australia, India and Israel. Several others are expected to grow rapidly this year and in 2014: Mexico, South Africa and Chile.

Develop a Strategy

Listed below are some questions to consider when planning an international renewable energy project.

1.     Analyze and determine which technology is best to be deployed on a certain property, i.e., wind power, PVs or solar thermal or all?

2.     What is the capacity to be installed?

3.     Where is the grid connection and can I feed in my current from renewable energy?

4.     What would be the earnings and demand analysis?

5.     How are we going to determine the calculation of profitability and the recovery? What may be some of the affecting factors?

6.     What are the underlying issues in getting the construction and building permits?

7.     Does the project comply with the national feed in requirements? What can change?

8.     For how long is the feed in tariff guaranteed? What is the probability this may change?

9.     Which is the best company to buy from?

10.  How will we handle reputation, monitoring and repairs in the country/region?

One needs to be aware of the many variables that may affect the success or failure of international renewable energy projects. For example, consider the legal environment, the political system, economic marketplace, and the cultural values of a country and its openness in terms of business transparency and practices. The less developed the countries, the more competitive your solution may be; however, the more you may need to know about the rules of the road as to how to negotiate, launch and sustain your relationship and build a viable business.

Mona Pearl is the founder and COO of BeyondAStrategy, Inc., and an expert in global corporate expansion strategies. She helps companies with entrepreneurial mindsets become competitive and sustainable internationally. Pearl is the author of the book Grow Globally: Opportunities For Your Middle Market Company Around The World. Learn more at www.monapearl.com or www.beyondastrategy.com.

Illustration by nokhoog_buchachon at Free Digital Photos.net

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