After conducting interviews with clients, industry analysts, and senior Deloitte energy practitioners, Deloitte outlines the top ten issues and trends it sees for 2011 in its first renewable energy report. Here are their findings:
Tangled Regulations Inhibit Progress
Two steps forward and three steps back. Inconsistent regulations in each country, difficulty getting funding, and a lack of effective incentives have bogged down forward motion. To navigate these hurdles, renewable energy regulations need to be clearly defined and not subject to constant change, while incentives should reflect the needs of the local economy and remain in effect for the long-term.
Mergers and Acquisitions Forecast: Cloudy with a Chance of Cancellation
Budgets are tight everywhere. Mergers and acquisitions (M&A) face an uncertain landscape for the foreseeable future and deals will encounter more difficulties and take longer to finalize. M&A must adapt by acquiring new skills and accepting that this new business environment means veering into the political arena.
As the economy slowly recovers, funding will continue to be in short supply. Plan accordingly.
Examining the Sustainability Aspect
Are our renewable energy solutions creating more problems than they’re solving? As this fledgling industry grows, environmental and social consequences must be taken into account whenever a company implements a sustainability strategy.
Apply Lessons Learned
There’s no need to reinvent the wheel. Although renewable energy is a relatively new industry, it can benefit from the same business knowledge gained from other industries’ growing pains and large-scale project experience.
New Jobs, New Skills
So far, the majority of new jobs created in this industry have been manufacturing positions. It’s a start, but ultimately might be short-sighted as these jobs could be moved overseas. As the industry blooms, positions all along the supply chain need retrained and newly educated workers, but these come at a tremendous cost. However, countries must continue to make this costly investment for renewable energy to keep moving forward.
Why Can’t We Be Friends?
Oil and gas doesn’t have to be at odds with renewable energy. Both industries have specialized job skills and technology in common and will most likely see even more overlap in the future.
Who Will Pay the (Hefty) Price?
Ultimately, consumers. Consumer buy-in and support are crucial. In order to engage consumers and position the additional cost, companies must educate consumers about energy efficiency, take the time to understand consumer needs, and work with consumers to negotiate the best financial arrangement.
How to Move it from Here to There
Industry experts are keeping a sharp eye out for sites around the globe that are conducive to creating renewable energy. However, most ideal sites are in remote areas, and the problem becomes how to create, store and deliver this new energy to consumers. Local industries are a start, but a global infrastructure needs to be put into place for the long term.
Building an Industry
Right now the renewable energy supply chain is inadequate to create and distribute energy around the world. To grow into a solid, sustainable, global industry and meet the 2020 renewable energy goals many countries have set for themselves, much thought must go into scaling up without cutting corners. If this industry grows with planning and forethought, companies will have many opportunities thrive.
Download a copy of the Deloitte report: Alternative Thinking 2011: A look at 10 of the top issues and trends in renewable energy.