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Global Hybrid Power Systems Market

  • May 2014
  • Frost & Sullivan
Report ID: 2126685

Summary

Table of Contents

Low Electrification Rates Provide Huge Opportunities in Africa and Latin America

Key Findings

-The global hybrid power systems market witnessed steady growth during 2010-2012. It is expected to experience similar growth through the forecast period, 2014-2018.
-The market generated $x million in 2013, and is set to witness a compound annual growth rate (CAGR) ofx % to reach $x million by 2018.
-Hybrid power capacity installed in 2013 stood at x MW , a growth of x % over 2012, when it was x MW. By 2018, annual installed capacity is likely to be 203.6 MW.
-Most of the developing world provides good opportunities for growth of this technology due to under-developed grid networks, which render a considerable population without grid connected electricity.
-This population relies on diesel gen-sets for their power requirements, which is increasingly being replaced by hybrid power systems, making retrofitting an integral part of the business.
-Solar and wind are dominant hybrid power sources that are in abundance in growing regions of Latin America, Middle East & Africa (MEA), and Asia-Pacific (APAC).
-China, India, Myanmar, South Africa, and Brazil are the global hotspots for this market. These countries are emerging economically and continue to invest in all sources of renewable energy. They have limited grid network, making hybrid power systems a likely source of power for remote areas.
-North America and Europe are relatively smaller markets with better potential in industrial and standalone off-grid applications than residential. Remote areas in Canada, Alaska, and Greenland provide lucrative opportunities.
-The absence of proper legislations and policies for financial assistance from governments acts as a deterrent to the capital-intensive industry; however, an expected decline in turnkey prices is likely to encourage customers to employ these solutions.
-The telecom sector is set to experience high growth of x % as companies expand into Africa and other developing nations, where the interiors have no electricity access and need to rely on hybrid power systems for power.
-Telecom towers in remote areas are traditionally powered by diesel gen-sets, which are being increasingly replaced by hybrid power systems, thereby cutting fuel costs while receiving reliable power.
-A steady increase in fossil fuel prices has encouraged customers to employ hybrid power solutions which are cost effective in the long run. Off-grid areas currently rely on diesel generated power that is increasingly proving to be expensive. This has boosted the installation of hybrid power systems.
-Eltek, Kyocera, Bergey, Gamesa, Xzeres and EDF ENR are some of the top companies in this arena.

CEO’s Perspective

Developing regions of Latin America and MEA provide immense opportunities for hybrid power systems.
Turnkey prices decline globally as technological advancements help reduce capital costs of components.
Absence of proper policies to develop and assist hybrid power industry in most countries acts as a major deterrent.
India, China, and Africa will see high penetration of hybrid power systems over the next five years.
Telecom sector applications will be the highest revenue earners as telecom penetration increases at an unprecedented pace.

Turnkey Cost Analysis

-The turnkey cost of a typical hybrid power system, priced at at $x per kW in 2013, is likely to witness a steady decrease.
-Solar panel component prices are constantly falling, with a decrease of x % likely during 2013-2020, primarily due to technological advancements and increased installations. Wind turbine costs are decreasing as well but at a slower pace than solar panels.
-Apart from the turbine and panels, prices for other components required for installation and commissioning are expected to decrease as the demand rises.
-Transportation costs are likely to increase due to a rise in global fuel prices. Moreover, as most hybrid power sites are in remote areas, transportation costs are higher.
-Labour costs are decreasing due to an increased knowledge base available in the industry. However, the effect is subdued as the growing economy in developing countries increasingly seeks engineering expertise, thereby countering the downward trend of greater supply of qualified labour.

Hybrid Power Potential

-The market potential for electrification of remote areas has been the most important driver for the hybrid power systems market. In developing countries, it is the primary factor, along with increasing industrial and telecom penetration.
-The potential of the industrial segment also depends on the electrification rate of the country, as a hybrid power system will be required primarily where there is no access to a grid.
-Considering these applications of hybrid power systems, four most important parameters have been considered to calculate the hybrid power potential for each country:
oPopulation
oPopulation density
oDegree of Electrification
oPopulation without electricity

Key Questions This Study Will Answer

What have been the trends in the hybrid power systems market in the past and what will be the major factors affecting market growth in the future?
How is the market poised to respond to the challenges presented by renewable energy subsidy cuts in many countries due to the economic downturn?
Why do hybrid power generation costs vary with changing geographies?
When is the hybrid power systems market likely to reach technical and market maturity, considering it has been around for nearly two decades?
Which companies will emerge as global leaders in the competitive landscape where system integrators and manufacturers are rapidly synergizing their operations?
Which are the hotspots for hybrid power systems and which region is expected to have the highest installed capacity expected during the next five years?

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