This power industry outlook finds that $2.20 trillion will be invested in generation capacity additions for the period 2017-2021 driven mainly by renewable energies, solar and wind, accounting for $603.4 billion and $553.7 billion, respectively. Similar to 2017, the key player expects solar energy to account for the majority of the investment - $123.03 billion in 2018 - with China expected to be the key contributor. The need and the investment climate for solar and wind (offshore) are present and positive. We advise power generation participants to consider this trend and also focus on plant utilization trends before making investments.

In the case of wind, the transition to an auction-based system witnessed bids reaching a low; we expect this trend to continue in 2018 as cost optimization is garnering more focus than ever. We forecast hydropower and biomass investment to remain stable at $77.06 billion and $23.30 billion, respectively, for 2018. To the contrary, investment outlook for gas remains low as we forecast new turbine orders to stay similar to 2017, the primary reasons being a) Renewables becoming cost competitive to gas b) Strong need for new turbine orders is absent due to excess capacity on the grid and the focus on other generation types. Moreover, nuclear power is beginning to revive post-Fukushima as China, Europe, and the Middle East are in the process of adding new nuclear capacity. Nuclear investment for 2018 is expected to reach $25.7 billion. Asia-Pacific will be the last bastion for coal as investment outlook is negative and is expected to steadily decline year on year. In addition to generation capacity and investment forecast, eight chief power industry trends have been provided in this outlook. These include the trend of oil majors venturing into the electricity industry, innovative energy start-ups contributing to industry competition, increase in mergers and acquisitions, and the rise of energy storage. This outlook includes predictions for 2018, which we advise participants of the energy industry value chain to consider. Decentralization, Decarbonization, and Digitalization must continue to remain the top priorities for energy utilities and OEMs strategizing for the future.

Key Issues Addressed

  • What is the expected annual investment by generation type till 2021?
  • What is the installed capacity forecast of renewable and conventional generation types till 2021?
  • What are the key trends that are likely to impact the power industry moving forward?
  • Which are the key companies participating in the industry by generation type?
  • What are the key regional trends that industry participants must consider?