The Q2 (April – June 2010) report reveals that the number of new energy projects remains healthy, although the total potential investment value has fallen.

The power and renewable energy sectors account for over half of all new projects and investment potential in Q2 2010. The upstream and downstream sectors have seen decreases in both new project numbers and values since the previous quarter.

EIC Monitor tracks over 7900 active and future projects in the global energy industry and provides an industry barometer, broken down into oil and gas (downstream, midstream, upstream), nuclear and conventional power and the renewable energy sectors.

Key highlights of Q2 2010 report (1 April – 30 June 2010):

• Overall this quarter, the total number of new energy projects has dropped slightly on the previous quarter but is still significantly higher on the same quarter in 2009. Potential investment value has fallen by around 6% since the same quarter last year. In Q2 2010 there were 409 new energy projects across the global energy supply chain with an estimated total value of US$287 billion, compared to 426 in Q1 2010 totalling US$509bn and 336 new projects in Q2 2009 worth US$306bn;
• In the renewable sector the number of new projects is much the same as the previous quarter although the value of these has dropped. The previous quarter, Q1 2010, was dominated by the US$150bn Round 3 UK offshore wind programme;
• In the power sector, there has been a slight increase in the number of projects although the potential total investment value is down by 14.5%, possibly reflecting a slight move towards smaller decentralised power generation in some regions;
• The upstream sector has seen a 30% drop in both the number of new projects and project value since the previous quarter
• The midstream sector has seen a slight growth in the number of projects although with a 26% decrease in project value since Q1 2010; and
• In the downstream sector, the number of new quarterly projects remains similar although the total investment value has dropped by a third since Q1 2010.

In nearly all cases newly proposed energy projects must first undergo various planning and consent approvals which may take several years. Also, early stage proposals do not necessarily have financing agreed and in place. Thus there will always be a proportion of projects that do not gain consent and/or finance.

Commenting on the EIC Monitor, Mike Major, CEO of the EIC says: “While the potential investment value across all sectors has dropped slightly this quarter, it is encouraging to see that the number of new projects being proposed is holding steady and the global energy industry remains buoyant. Power and renewables continue to be the primary sources of new project proposals but there are still plenty of opportunities for energy supply chain companies across all sectors.”

Summary of Q2 new projects by number and value

The graphs to the right show the total number and value of new projects across the global energy supply chain for Q2 2010 and the previous four quarters.

Analysis by sector

Renewable energy:

• There have been 123 new projects in the renewable energy sector totalling US$68.4bn in Q2 2010.
• In comparison there were:
  • 124 new projects totalling US$224bn in Q1 2010;
  • 87 new projects totalling US$77.2bn in Q2 2009;
• The most significant new projects this quarter are the 11.3 GW Asa Branca offshore wind project and a number of Round 2 offshore wind expansion projects in the UK totalling 1522 MW with a value of US$7.2bn.

Upstream:

• There have been 64 new projects in the upstream sector totalling US$33.9bn in Q2 2010;
• In comparison, there were:
  • 92 new projects totalling US$49.5bn in Q1 2010;
  • 113 new projects totalling US$61.7bn in Q2 2009;
• Brazil has seen some significant new projects emerging including the construction of 28 drilling rigs destined for the sub-salt territories and also the Franco & Libra prospects which are expected to be the largest discoveries in the Santos basin after Tupi.

Downstream:

• There have been 57 new projects in the downstream sector totalling US$48.2bn in Q2 2010;
• In comparison, there were:
  • 60 new projects totalling US$72.3bn in Q1 2010;
  • 37 new projects totalling US$31.2bn in Q2 2009;
• Again new projects are widespread although Indonesia and China in particular have several large schemes emerging. Indonesia has three refinery projects at Masela, Cilegon and Tuban totalling $17bn. China has a number of petrochemical based projects and a US$3.8bn synthetic natural gas project at Qitai.

Power:

• There have been 109 new projects in the power sector totalling US$117bn in Q2 2010;
• In comparison there were:
  • 99 new projects totalling US$137bn in Q1 2010;
  • 93 new projects totalling US$113bn in Q2 2009;
• India features heavily with 19 new projects totalling US$31bn of investment potential. China announces three more nuclear plants. South America has seen 9 new projects totalling just under 5 GW. Europe has seen a number of larger projects struggling with consenting and finance issues. Several new energy from waste schemes and biomass power projects are being proposed in the UK.

Midstream:

• There have been 56 new projects in the midstream sector totalling US$19bn in Q2 2010;
• In comparison, there were:
  • 51 new projects totalling US$25.8bn in Q1 2010;
  • 36 new projects totalling US$21.9bn in Q2 2009;
• Again new and emerging projects are well distributed. The largest of these are the US$3bn Beyneu to Shymkent Gas Pipeline in Kazakhstan and the US$2bn Newcastle LNG plant in Australia. China and the USA have the largest number of new projects.