The Right Business for You
Environmental Ventures Corporation will complete a rigorous due diligence process in identifying the right business opportunities to monetize. Factors that will identify the right business are:
Deregulation of the Power Generation Industry
The electricity generation and transmission and distribution industries have been going through significant changes, particularly since the 1980s when privatization was successfully introduced in the United Kingdom. The United States, Canada and Australia have also introduced various degrees of privatization in their own electricity markets. More recently, European countries along with many throughout the Middle East and various jurisdictions across Asia and Africa have been opening up their electricity markets through a combination of deregulation, public-private partnerships and outright privatization.
The general trend away from public management of the electricity industry and greater reliance on private market participation is being driven in part by cost and budget pressures on governments everywhere. This in turn presents opportunities for the private sector to participate in this growing market by offering cost savings solutions such as the smaller footprint substation on Build Own Operate (“BOO”) or Build Own Operate Transfer (“BOOT”) basis. These type of contractual relationship offer the greatest cost savings to local government and frees up capital and operating budget dollars that can be used elsewhere. It also means lower tariffs for utility customers. Generation has witnessed the greatest degree of deregulation in the electricity business, mainly due to the ease by which electricity production can be commoditized. Independent Power Producers (“IPPs”) are common in most industrialized markets globally, with the Middle East, China and India showing tremendous growth opportunities as a result of their high economic growth rates and insatiable demands for electricity. IPPs are also in demand in North America and Europe. By establishing itself in the transmission and distribution segments of the electricity industry, the Company will be well positioned to take advantage of BOO and BOOT opportunities in the generation side of the power business.
Global Demand for Electricity
The global demand for electricity generation is expected to nearly double from 2004 to 2030, while electricity generation in non-OECD countries is expected to surpass that of OECD countries by 30%. The two main drivers for this non-OECD growth are the current level of relative infrastructure maturity in OECD countries when compared to non-OECD, and the expected increase in population growth in non-OECD countries
The major growth sector both at the World Wide and OECD levels is in commercial end usage. This represents the expected increase in the demand for institutional and business services, specifically those offered in non-OECD nations.
The average global accounting cost for commercial (corporate) electricity in 2004 is estimated at $.055/kWh. The total global demand for electricity increases from 16, 424 Billion kilowatt-hours in 2004 to 30,364 Billion kilowatt-hours in 2030 representing a CAGR of 2.4%.
Monetary estimates of the electric power industry, based on a global corporate accounting cost per kilowatt of $.055, approximate $903.32 Billion (2004 USD) in 2004 and $1,670 Billion (2004 USD) in 2030. Note that the cost per kilowatt-hour is very conservative. Some Canadian provinces are offering between $.069 and $.084/kWh, driving the monetary estimates of the electric power industry to approximately (average $.076/kWh) $1,256 Billion (2004 USD) in 2004 and $2,307 Billion (2004 USD) in 2030.
Regions with High Demand for Renewable Power Generation
While global electricity growth rates are expected to be dominated by non-OECD nations as is presented in China, India, Other Asia, Middle East, Africa and Central/South America, regions with highest use of renewable power generation remain within OECD nations.
By 2030 hydro will account for 68%, biomass and waste will account for 11.5%, wind account for 16%, geothermal will account for 2.5%, solar will account 2% and tidal and wave will account for .2% of global renewable electricity generation. What is interesting is that the Compound Annual Growth Rates (CAGR) over the 26 year period from 2004 to 2030 for hydro is estimated at -1%, biomass and waste is estimated at 2%, wind is estimated at 7%, geothermal is estimated at 1%, solar is estimated at 11% and tidal and wave is estimated at 7% of global renewable electricity generation growth.
Source: International Energy Outlook 2007, EIA, Report #:DOE/EIA-0484(2007), Release Date: May 2007
The global market for renewable electricity power generation ranges from $175 Billion to $241 Billion (using conservative estimates at $.055/kWh/using moderate estimates at $.076/kWh) in 2004 and $385 Billion to $533 Billion in 2030, representing a 3% CAGR over the 26 year period.
|
Global Hydro and Renewable Electricity Generation Billions ($USD) |
|
|
2004 |
2015 |
2030 |
|
Conservative Estimates ($.055/ kWh) |
|
|
|
|
|
|
|
|
|
|
Hydro |
|
$154.50 |
$202.51 |
$261.20 |
|
Biomass and waste |
$12.49 |
$23.21 |
$44.28 |
|
Wind |
|
$4.51 |
$23.82 |
$62.26 |
|
Geothermal |
|
$3.08 |
$5.50 |
$9.57 |
|
Solar |
|
$0.22 |
$1.65 |
$7.81 |
|
Tide and wave |
$0.06 |
$0.06 |
$0.66 |
|
|
|
|
|
|
|
Total |
|
$174.85 |
$256.74 |
$385.77 |
|
|
|
|
|
|
|
|
Global Hydro and Renewable Electricity Generation Billions ($USD) |
|
|
2004 |
2015 |
2030 |
|
Moderate Estimates ($.076/kWh) |
|
|
|
|
|
|
|
|
|
|
Hydro |
|
$213.48 |
$279.83 |
$360.92 |
|
Biomass and waste |
$17.25 |
$32.07 |
$61.18 |
|
Wind |
|
$6.23 |
$32.91 |
$86.03 |
|
Geothermal |
|
$4.26 |
$7.60 |
$13.22 |
|
Solar |
|
$0.30 |
$2.28 |
$10.79 |
|
Tide and wave |
$0.08 |
$0.08 |
$0.91 |
|
|
|
|
|
|
|
Total |
|
$241.60 |
$354.77 |
$533.06 |
|
Source: International Energy Outlook 2007, EIA, Report #:DOE/EIA-0484(2007), Release Date: May 2007
The number one ranking market for renewable electricity power generation (not including Hydro) is OECD Europe with 828 Billion kWh in 2030 ranging from $45 Billion to $62 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number two ranking market for renewable electricity power generation (not including Hydro) is OECD North America with 580 Billion kWh in 2030 ranging from $32 Billion to $44 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number three ranking market for renewable electricity power generation (not including Hydro) is China with 228 Billion kWh in 2030 ranging from $12 Billion to $17 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number four ranking market for renewable electricity power generation (not including Hydro) is OECD Pacific with 128 Billion kWh in 2030 ranging from $7 Billion to $10 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number five ranking market for renewable electricity power generation (not including Hydro) is Latin America with 90 Billion kWh in 2030 ranging from $5 Billion to $7 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number six ranking market for renewable electricity power generation (not including Hydro) is India with 89 Billion kWh in 2030 ranging from $5 Billion to $7 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number seven ranking market for renewable electricity power generation (not including Hydro) is Africa with 77 Billion kWh in 2030 ranging from $4 Billion to $6 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number eight ranking market for renewable electricity power generation (not including Hydro) is Russia with 34 Billion kWh in 2030 ranging from $2 Billion to $2.5 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
The number nine ranking market for renewable electricity power generation (not including Hydro) is the Middle East with 18 Billion kWh in 2030 ranging from $1 Billion to $1.5 Billion (using conservative estimates at $.055/kWh and moderate estimates at $.076/kWh).
