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Released July 31, 2013 | DENVER, COLORADO
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Asia and South America were cited by speakers and attendees at last week's HydroVision International conference in Denver as attractive markets for building hydroelectric generation. Indeed, the number of projects and aggregate value of those projects dwarfs the U.S. market, according to project data maintained by Industrial Info. However, operating overseas is not for the faint of heart, because political instability, corruption, violence and currency fluctuation can undermine the economics of any project.
Asian nations are developing 2,219 hydroelectric projects with capital and maintenance worth $451 billion, while the value of South America's 828 hydro projects under development exceeds $224 billion, according to Industrial Info's Global Power Project Database. North American hydroelectric development activity totals about $134 billion: $81 billion in the U.S. and $53 billion in Canada.
Click on the icons at right for a bar chart showing the number of active hydro projects being developed in different regions of the world.
U.S. hydroelectric development has been slowed by federal licensing issues, the absence of federal Renewable Portfolio Standards (RPS), specific requirements for state-level RPS, and difficulty in attracting capital, speakers told the HydroVision conference last week. For more on that issue, see July 25, 2013, article - U.S. Hydroelectric Power Leaders Try to Reverse the Industry's Perception Problem, and July 29, 2013, article - U.S. Hydroelectric Business: Bright Prospects, Hard Realities.
"Internationally, hydropower is intoxicating to many in our industry," said Alan Krause, chairman and chief executive at MWH Global (Broomfield, Colorado), to attendees at the event's keynote speech. "But security in some countries is unacceptable. Some new entrants are trying their hand overseas, but a catastrophic event could be very damaging to the hydro industry globally."
In a panel discussion before an estimated 1,500 attendees at HydroVision, Roland Muench, president of Voith Hydro Holding GmBH (Heidenheim an der Brenz, Germany), said the potential to bring clean, reliable electricity to developing nations is an exciting and fulfilling proposition: "Children can go to school and people's life expectancy rises beyond 40 years as a consequence of bringing hydro to rural markets in the developing world."
Kevin Frank, president and chief executive of Voith Hydro Incorporated (York, Pennsylvania), Voith's U.S. unit, said the company sees a lot of new-build hydroelectric opportunities overseas, specifically in China, South America, Canada and Africa. "Africa has huge potential, but the killer there is that its infrastructure is still in an early stage of development," he told Industrial Info in an exhibit-floor interview.
Frank also said the U.S. is still an attractive market. "We've been making hydro equipment in York, Pennsylvania, for 135 years. We plan to be making hydro equipment there for another 135 years. As a nation, the U.S. needs more small hydro, conduit hydro and pumped storage." He pointed to four hydro generators that are being added to existing dams along the Ohio River as "a good example of what can happen," adding that more hydroelectric generation needs to be added to the tens of thousands of U.S. dams that lack hydroelectric generation. Voith Hydro is manufacturing turbines and generators for the four AMP Ohio River projects, which will add more than 300 MW of new electric generation.
Global equipment and services firm Alstom (EPA:ALO) (Levallois-Perret, France) sees "significant hydro business opportunities driven by diverging trends in mature and emerging markets," said Jerome Pecresse, president of its Renewable Sector, to Industrial Info. "The majority of new hydroelectric generation projects are expected in Asia and Latin America. Alstom has invested in our ability to serve those new-build markets through our manufacturing and hydro Global Technology Centers in Tianjin, China and Taubate, Brazil. We also are closely following the potential for new-build hydro projects in sub-Saharan Africa."
Alstom sees a different kind of opportunity in the North American hydro business, a mix of new-build and rehabilitation of existing hydro generators. He continued: "Rehabilitation is particularly relevant in North America, where 43% of hydro facilities are more than 40 years old. Upgrading these facilities with the latest advancements in hydro technologies and providing ongoing service support for customers is Alstom's primary hydro activity in the U.S. We have a proven ability to deliver successful U.S. rehab projects and are currently in the process of delivering rehab equipment for America's second-largest hydro facility. In Canada, our hydro business activity is driven by a mix of rehab and new construction projects."
At HydroVision, MWH Global extolled signature projects in Ethiopia and Peru. "Overseas markets are a huge opportunity for us," Nicole Lang, a spokesperson, said in an exhibit-floor interview. The Tekeze Hydropower Project in Ethiopia, completed in 2009, can provide power to as many as 80 million people across East Africa. At about 617 feet tall, the 300-megawatt Tekeze project is the tallest dam in Africa. "The government is stable and the need was there," Lang said.
She added that the World Bank now considers hydro a renewable resource, which clears the way for it to make loans and grants to hydroelectric projects overseas.
In exhibit-floor interviews, several of HydroVision's estimated 2,900 attendees told Industrial Info the positive aspects of operating in the U.S.--a large market with a stable political climate and strong currency--sometimes seem outweighed by lengthy licensing process and political challenge of domestic hydro development.
By contrast, demand for grassroot hydroelectric projects overseas was more pronounced, but the way business is conducted overseas is often quite different than in the U.S. One attendee noted, "When China wanted to build its Three Gorges hydro project, it simply moved 2 million people out of the area. You don't see that kind of thing happening in the U.S."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Asian nations are developing 2,219 hydroelectric projects with capital and maintenance worth $451 billion, while the value of South America's 828 hydro projects under development exceeds $224 billion, according to Industrial Info's Global Power Project Database. North American hydroelectric development activity totals about $134 billion: $81 billion in the U.S. and $53 billion in Canada.
Click on the icons at right for a bar chart showing the number of active hydro projects being developed in different regions of the world.U.S. hydroelectric development has been slowed by federal licensing issues, the absence of federal Renewable Portfolio Standards (RPS), specific requirements for state-level RPS, and difficulty in attracting capital, speakers told the HydroVision conference last week. For more on that issue, see July 25, 2013, article - U.S. Hydroelectric Power Leaders Try to Reverse the Industry's Perception Problem, and July 29, 2013, article - U.S. Hydroelectric Business: Bright Prospects, Hard Realities.
"Internationally, hydropower is intoxicating to many in our industry," said Alan Krause, chairman and chief executive at MWH Global (Broomfield, Colorado), to attendees at the event's keynote speech. "But security in some countries is unacceptable. Some new entrants are trying their hand overseas, but a catastrophic event could be very damaging to the hydro industry globally."
In a panel discussion before an estimated 1,500 attendees at HydroVision, Roland Muench, president of Voith Hydro Holding GmBH (Heidenheim an der Brenz, Germany), said the potential to bring clean, reliable electricity to developing nations is an exciting and fulfilling proposition: "Children can go to school and people's life expectancy rises beyond 40 years as a consequence of bringing hydro to rural markets in the developing world."
Kevin Frank, president and chief executive of Voith Hydro Incorporated (York, Pennsylvania), Voith's U.S. unit, said the company sees a lot of new-build hydroelectric opportunities overseas, specifically in China, South America, Canada and Africa. "Africa has huge potential, but the killer there is that its infrastructure is still in an early stage of development," he told Industrial Info in an exhibit-floor interview.
Frank also said the U.S. is still an attractive market. "We've been making hydro equipment in York, Pennsylvania, for 135 years. We plan to be making hydro equipment there for another 135 years. As a nation, the U.S. needs more small hydro, conduit hydro and pumped storage." He pointed to four hydro generators that are being added to existing dams along the Ohio River as "a good example of what can happen," adding that more hydroelectric generation needs to be added to the tens of thousands of U.S. dams that lack hydroelectric generation. Voith Hydro is manufacturing turbines and generators for the four AMP Ohio River projects, which will add more than 300 MW of new electric generation.
Global equipment and services firm Alstom (EPA:ALO) (Levallois-Perret, France) sees "significant hydro business opportunities driven by diverging trends in mature and emerging markets," said Jerome Pecresse, president of its Renewable Sector, to Industrial Info. "The majority of new hydroelectric generation projects are expected in Asia and Latin America. Alstom has invested in our ability to serve those new-build markets through our manufacturing and hydro Global Technology Centers in Tianjin, China and Taubate, Brazil. We also are closely following the potential for new-build hydro projects in sub-Saharan Africa."
Alstom sees a different kind of opportunity in the North American hydro business, a mix of new-build and rehabilitation of existing hydro generators. He continued: "Rehabilitation is particularly relevant in North America, where 43% of hydro facilities are more than 40 years old. Upgrading these facilities with the latest advancements in hydro technologies and providing ongoing service support for customers is Alstom's primary hydro activity in the U.S. We have a proven ability to deliver successful U.S. rehab projects and are currently in the process of delivering rehab equipment for America's second-largest hydro facility. In Canada, our hydro business activity is driven by a mix of rehab and new construction projects."
At HydroVision, MWH Global extolled signature projects in Ethiopia and Peru. "Overseas markets are a huge opportunity for us," Nicole Lang, a spokesperson, said in an exhibit-floor interview. The Tekeze Hydropower Project in Ethiopia, completed in 2009, can provide power to as many as 80 million people across East Africa. At about 617 feet tall, the 300-megawatt Tekeze project is the tallest dam in Africa. "The government is stable and the need was there," Lang said.
She added that the World Bank now considers hydro a renewable resource, which clears the way for it to make loans and grants to hydroelectric projects overseas.
In exhibit-floor interviews, several of HydroVision's estimated 2,900 attendees told Industrial Info the positive aspects of operating in the U.S.--a large market with a stable political climate and strong currency--sometimes seem outweighed by lengthy licensing process and political challenge of domestic hydro development.
By contrast, demand for grassroot hydroelectric projects overseas was more pronounced, but the way business is conducted overseas is often quite different than in the U.S. One attendee noted, "When China wanted to build its Three Gorges hydro project, it simply moved 2 million people out of the area. You don't see that kind of thing happening in the U.S."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
