Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (39789)	10/19/2003 8:31:22 PM
From: elmatador	Respond to of 74559

<<When you talk about investment you think of oil and natural gas. But in the next three decades the most investment will have to go to electricity.">> Power sector 'to need $10,000bn in next 30 years' By Carola Hoyos, Energy Correspondent Published: October 19 2003 20:50 \| Last Updated: October 19 2003 20:50 Private investors and governments will have to invest $10,000bn in the world's power sector in the next 30 years, according to a study from the International Energy Agency to be released early next month. Such investment is said to be essential if repeats of the supply shortages that plunged much of the eastern US and parts of Europe into darkness this summer are to be avoided. More than $2,000bn of the investment would have to be made in China, the fastest-growing consumer of energy in the world. The estimates are the result of a two-year study by the IEA , which comprises the world's largest energy-consuming countries. Fatih Birol, the agency's chief economist and author of the report, said: "The myths were destroyed. When you talk about investment you think of oil and natural gas. But in the next three decades the most investment will have to go to electricity." Indeed, electricity makes up more than 50 per cent of the overall investment needed in energy, with oil and gas making up the second largest need and coal occupying a small slice. But securing the necessary capital, in particular for the power industry, will not be easy. The energy sector is associated with relatively low returns and high volatility and risk. Between 1992 and 2002 it performed in the bottom half of all industries, the IEA concluded. Finding investment for industrialised countries, or for developing countries that supply energy to their wealthy counterparts, will be easier than finding the capital to build transmission lines and power plants in developing countries, whose economic growth depends, among other things, on access to electricity. Adequate investment for so-called "peak load," which is needed only in times of unusually high demand, has yet to be addressed in the US and many European countries, in their drive to deregulate their markets. "Governments will have to become less and less lenders or owners but build the necessary framework to regulate gas and power to give incentives to investors," Mr Birol said. In Europe this is far from being the case. The IEA's report is expected to show that seven big companies own more than 60 per cent of capacity. More than half of the investment needed in the utility sector will have to be used to build and improve transmission networks - a point underlined by the blackouts that affected New York City and much of eastern Canada and the US in August.