LONDON, March 4, 2010 /PRNewswire/ -- The Kyoto Protocol and EU 2020 energy targets are slowly altering the energy industry landscape, gradually shifting energy consumption from coal, oil and natural gas, towards renewable energy sources. To meet stated renewable energy goals while concurrently severing dependence on foreign oil and gas imports, EU governments are laying favourable groundwork for attracting investments into the renewable energy industry and other carbon abatement technologies. A carbon-free future threatens OG companies with declining business growth in Europe, unless they successfully transfer their technology and skills into renewable energy where they can potentially discover more new business opportunities.
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New analysis from Frost Sullivan Diversification of Oil and Gas Companies into the Renewable Energy Industry finds that the European renewable energy industry (offshore wind, geothermal, solar, marine and biofuels) boomed in 2008 with share of renewable energy in the European energy mix increasing from 14.6 percent in 2006 to 16.3 percent in 2008 despite the economic downturn.
While consumption of electricity from conventional energy sources has declined, consumption of electricity from renewable energy sources continues growing, states Zeinegul Hassan, Frost Sullivan Research Analyst Energy Power Systems Group. Since Europe is dependant on OG imports, the increase of renewable energy share in the energy mix is of great importance to the region.
One of the most attractive renewable energy areas for OG companies is offshore wind. The offshore wind market, fast growing and backed by government support, must nevertheless overcome bottlenecks in the supply of components and a lack of purpose-built installations. The OG industry can help offshore wind through experience and technology transfer and sharing equipment and labour force.
Another renewable energy sector, OG companies could help to grow is the geothermal energy market. Although mature, the geothermal market requires investments to achieve economies of scale and reduce costs. OG companies can offer their drilling expertise and services. Their involvement as technology developers is likely to help the market transfer to Enhanced Geothermal System (EGS) technology.
Solar energy as well has great potential but sill needs to be subsidised in order to develop further. The high cost of equipment and the dependency on government support is a restraint to investors. The OG industry can bring engineering and RD expertise to help lower equipment costs.
The marine energy market can adapt some of the offshore oil and gas technologies. Marine energy is a non-intermittent and highly efficient renewable energy source. However, without clearer government support and expanded technical expertise, marine energy is the least attractive for investors. The subsea OG industry can transfer skills and technologies to facilitate market growth.
The biofuels market in the EU has negative profit margins and faces strong competition from cheap imports. However, the market should grow thanks to the EU 10 per cent biofuels commitment. This market is one of the first to get an interest from OG companies. If second generation biofuels are successful, more OG are expected to invest in the biofuels market.
If you are interested in more information on this subject, please e-mail Chiara Carella, Corporate Communications, at chiara.carella@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.
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Contact: Chiara Carella Corporate Communications - Europe P: +44(0)20-7343-8314 M: +44(0)753-3017689 E: chiara.carella@frost.com http://www.frost.com
SOURCE: Frost SOURCE: Sullivan
CONTACT: Chiara Carella, Corporate Communications - Europe of Frost Sullivan, +44(0)20-7343-8314, Mobile, +44(0)753-3017689,chiara.carella@frost.com
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