INTRODUCTION
STUDY GOALS AND OBJECTIVES
BCC's goal in conducting this study was to assess the technical status and
identify and quantify market opportunities for small hydroelectric power plants
and equipment, and ocean energy conversion (OEC) devices. The level of detail
for market coverage includes state, national, regional, and worldwide totals. The
investigation included developing a rationale for projecting the evolution of
the markets for the equipment through 2008. For small hydro, the study focuses
on an upper bound of 10 MW capacity and a lower bound of 1 MW, except in a few
instances where the national definition of small hydro is different and impacts
the market in that country. Small hydro turbines included in this capacity
range are Francis, Kaplan, Pelton, Turgo, crossflow, and propeller devices. Ocean
energy conversion (OEC) systems, covering ocean current, ocean thermal, tidal,
tidal current and wave energy facilities, were examined in their totality. No
specific bounds have been established for these technologies in terms of the
necessary output relative to cost because all OEC technologies have limited
deployment at present. The market potential, however, is very large. A new
class of hydromechanical energy conversion device has recently emerged, called
freestream hydroturbines. These devices cross over both ocean tidal current and
river-based categories. Market forecasts were developed for both applications. Markets
for technologies do not evolve in a vacuum. A goal of the research for this
report was to investigate, characterize and quantify the impacts of resource
location, capital availability, political forces, government incentives,
international mandates, permitting issues, and environmental factors that impede
or enhance the markets. The technical status of each of the technologies was
also examined to determine whether trends are emerging in the preferences for
one technology over another, or whether technological advances were priming one
technology to supercede another.
REASONS FOR DOING THIS STUDY
The renewable energy technologies industry has climbed into the realm of big
business. Large wind turbines joined small hydro and biomass in the
billion-dollar annual revenue realm in the late 1990s. Photovoltaics reached
that level in 2000 and now megawatt-scale projects regularly occur. Geothermal
power plants have become a short-listed option wherever a sufficient resource is
present. A slew of new OEC technologies have been developed and demonstration
projects are being deployed in the waters off four continents. This study was
performed to pinpoint and characterize opportunities for growth of small hydro
and OEC technologies. The goal was to quantify their current and future
installed capacity and to place a dollar value on those shipments. For
equipment manufacturers, this study is designed to serve as a guide for
directing marketing and sales efforts, as well as for manufacturing capacity
planning. A number of project developers are profiled that operate in different
parts of the world to provide marketing opportunities for companies that
manufacture small hydro equipment. This report aids project planners,
developers and financiers as they assess the potential for success of small
hydro or ocean energy conversion technologies in a given location. Analyses are
carried out of the government and utility policies, resources, utility rates,
interconnection procedures, subsidies, and tariff schemes for many of the
countries examined in this report. The study describes the forces driving the
rapid growth of renewables markets, including regulatory and financial incentive
schemes that governments, private organizations and international organizations
have put into place to foster renewables industries. As with other bulk power
production equipment, the economics of renewables are strongly influenced by
regulatory, subsidy and taxation considerations that vary from continent to
continent, nation to nation, state to state, utility to utility. The contents of
this study are intended to provide clear views of the social, political, and
economic environments in which these technologies must come to market. One
nearly universal concern is global warming, a nascent catastrophic environmental
situation whose existence has finally been admitted by all but the most
committed to denial. A second environmental factor is the growing
epidemiological evidence that millions of instances of respiratory illnesses and
fatalities are caused by emissions from fossil-fueled power plants. A final
major global concern is typified by the events of September 11, 2001. That
series of catastrophes emphasized the dangers of dependence and involvement of
oil-addicted western nations with unstable fundamentalist cultures that have
access to the world information utility, large amounts of capital, and materials
that can be put to destructive use.The expanding market for renewables has now
become large enough so that it has begun to impinge on the market shares of
conventional power generation technologies such as coal- and gas-fired power
plants, diesel generators, and large hydropower. Nuclear is dying because of its
costs, insoluble waste problems and the terrorism threat. This study was
performed to identify and quantify the driving factors in markets for small
hydro and OEC technologies, the key players, the technologies, the economics and
the market potential of these new and established industries.This report is the
third in a series of BCC Research reports that examine the level of potential
deployment of bulk renewable energy sources with what can be realized in the
near- to mid-term. This shift to renewables is altering the flow of money from
established power production industries to alternative sources of energy. Some
of the technologies, like small hydro, are no longer alternatives. They are
mainstream. The generator technologies used in small hydro facilities are
finding their way into OEC installation, while tidal stream generators are being
tested in rivers. For OEC technologies, answers were sought as to the pace of
the shift from development to mainstream, its magnitude, where it is happening,
and the implications for the fiscal evolution of the various technologies
examined.
CONTRIBUTIONS TO THE STUDY AND FOR WHOM
The analyses contained in this report were garnered from primary sources that
include manufacturers, inventors, utility representatives, vendors, end users,
government regulators and researchers, financial institutions, and venture
capitalists. Secondary sources that were examined include financial reports,
printed and electronic news releases, magazine articles, newsletters, technical
and topical books, and trade publications. Extensive use was made of existing
BCC Research data files and publications, and the World Wide Web.This report and
its analysis are of interest to manufacturers of equipment and balance of plant
components, project developers, equipment integrators, distributors,
contractors, government legislators and regulators, funding and energy agencies,
international development banks and agencies, investment bankers and
underwriters, venture capitalists, corporations, municipal governments,
utilities, carbon traders, green power vendors, and national and state clean
energy fund administrators.
SCOPE AND FORMAT
The scope of this study encompasses small hydroelectric facilities and ocean
energy conversion (OEC) technologies (ocean current, thermal, tidal, tidal
current, and wave).BCC analyzes each technology, determines its current market
status and readiness for market, examines its impact on future markets, and
presents forecasts of market evolution through 2008. Assessments are made in
terms of the installed and future installed capacities and annual project
revenues. Where appropriate, markets are examined on the basis of geographic
distribution. The emerging variety of wave and tidal energy conversion devices
is explored, and the market potential for each is assessed. Attention is given
to the overlap in application for the new class of underwater kinetic energy
conversion technologies, the freestream hydroturbine. Market assessments are
made for both freshwater and ocean market penetration for these devices. Small
hydro markets are investigated in terms of the annual new capacity and project
revenues (on a geographic basis) for this well-established technology. Attention
is devoted to factors such as Green Power programs, green tags/certificates,
Social Benefit Charges, Clean Energy Funds, Renewable Portfolio Standards, the
U.K. Renewables Obligation, the Kyoto Protocol and the Clean Development
Mechanism, the Prototype Carbon Fund, environmental concerns and mandates,
zoning issues, permitting, and cost comparisons.BCC analyzes the industry on a
worldwide basis, from the perspectives of manufacturing, product and market
evolution, government incentive programs, mandatory green energy purchases, and
market readiness or maturity. We examine legislative and regulatory support
programs for renewable energy, with discussion of their pertinence for small
hydro and ocean energy conversion systems (OECS).The report evaluates the market
opportunities for renewables in terms of the regulatory practices of nations,
provinces, and states, international agreements, the financial incentives and
barriers to uptake of the various technologies, and the capability of a given
region to utilize the various technologies. The world resource for small hydro
and ocean energy is estimated, as is the extent that resources can be tapped on
a mass basis and where. The suitability of the technologies for various regions
is examined and motivations for selection of particular technologies are
discussed.This report is laid out to provide an overview of the world renewable
energy bulk power market, then assess the relative contribution of small hydro
and ocean energy systems within the international, national, and state
frameworks that are pertinent to market development or hindrance. An attempt
is made to characterize the fiscal, environmental and political forces shaping
the world market for renewables technologies. Separate sections are then
provided that delineate the world, regional and national, and local (in as
granular a representation as is feasible or seems appropriate) markets for each
of the technologies covered in this report. Each technology is considered for
its functional aspects, fit to the application and location, costs, maintenance,
market position and prospects, and the manufacturers' ability to conceive,
develop, finance, execute and operate commercial projects. Some speculation
was made with regard to OEC technologies, since their stage of development
(outside of a few notable exceptions) has thus far limited them to demonstration
projects. All markets are examined in terms of the growth or decline of
installed capacity and expected revenues within the forecast interval covered in
this report (through 2008).
METHODOLOGY
BCC analyzed the small hydro and OEC generating capacity shipped through 2003
and expected to be shipped by the end of 2008. A number of forecasts were also
developed for freestream hydroturbines, a crossover technology used for both
run-of-the-river and tidal current power generation. Our estimated value is the
project revenue in 2003 dollars and, where appropriate, in terms of annual new
projects, annual new capacity, cumulative capacity (megawatts) and annual
revenue. Market forecasts were developed according to the realm of technology
and the state, province, nation, and region being discussed. Various
assumptions were made for unit capacity. The underlying rationales for the
assumptions are provided with the relevant market forecasts.Forecasts were
generated on the basis of unit counts by various international and national
government agencies, market sector associations, and financial reports and press
releases by manufacturers. Consideration was also given to funding programs by
international, national and local funding agencies, as well as government
policies toward the development of certain renewable energy technology sectors. Extensive
efforts were made to assess the real world support mechanisms for each of the
technologies examined, as well as the developable portion of the global and
local resources. Revenues were calculated according to historical average
costs in a given country. For small hydro, the predominance of new or renovation
projects was taken into consideration when generating revenue forecasts. Care
was taken to understand the impacts of international agreements and national
laws and subsidies that support deployment and growth in the markets for
renewable energy in general and for the specific technologies examined.
INFORMATION SOURCES
BCC surveyed numerous companies, consultants, and government branches to
obtain data and background information for this study. Included were
manufacturers of small hydroelectric generators and total systems, plus
developers of ocean current, ocean thermal, tidal current, tidal and wave energy
conversion devices. Conversations were also held with green power marketers,
permitting specialists, project developers, project engineering firms,
government regulators and researchers, bankers, venture capitalists and utility
representatives. In addition, data was compiled from financial and trade
information, government sources and technical societies. Extensive use was made
of World Wide Web sources in order to develop a comprehensive, quantitative view
of world markets in as efficient a manner as possible. | 
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