Buyers In Global Power Market More Optimistic About Revenue Growth In 2012

Tuesday 3 April 2012, Amsterdam

The market is becoming increasingly buoyant. 45% of respondents from the global power industry feel more optimistic about revenue growth in 2012. The implementation of cost containment measures, the growth of profitable markets in China, India and south-east Asia, changes in business strategy.

Among buyer respondents, global alternative power generation companies are more optimistic regarding revenue growth, at 49%, as compared with 33% of global fossil fuel power generators. Global warming, rising fuel prices and prevailing concerns that oil reserves in the world may dry up over the next 30 years have compelled power companies to look for alternative and renewable sources. Consequently, many respondents are looking to invest in clean power technologies such as wind, solar, hydro and nuclear power.

Of all respondents from global fossil fuel power generation companies, 33% projected optimism for revenue growth in 2012, which can be attributed to the high growth projected for power transformers and electricity, driven by substantial levels of economic reform and technological development in emerging countries such as India, China and South East Asian and Middle Eastern countries. Furthermore, growth in the global fossil fuel power sector is also anticipated to increase due to growing investment in new power projects across the emerging markets.

Overall, global power industry buyer and supplier respondents consider India, China, Brazil and the Middle East the most promising emerging markets for growth. Expansion in business activities in emerging markets, along with changing consumer lifestyles and a rise in consumer disposable incomes, stimulates demand for electronic goods and therefore power. Additionally, industrial demand for power is also rising, increasing global demand for power.

The top five emerging markets as identified by respondents from global fossil fuel power generation companies are India, Brazil, China, South Africa and the Middle East. Survey results show that in the Asia-Pacific region, India and China are considered the two most important emerging markets by respondents from global fossil fuel power generation companies. Strong economic growth along with high demand for power has turned these two countries into very attractive ventures for foreign investors, as numerous domestic power companies are looking to add capacity and plan new plants.

Globally, India has attained a significant position as a producer and consumer of electricity. Power is considered a key sector that will attract foreign direct investment inflows into the country. Over the next five years, India is expected to add 82GW of capacity in its power sector with total investment expected to reach US$200 billion, with US$120 billion earmarked for power generation alone.