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Cape Town, South Africa, 2008/01/23 - New analysis from growth consulting company Frost & Sullivan, The South African Co-generation Market, estimates that this market will be worth $30.4 million by 2012.
The South African co-generation market is currently in its early development phase. However, current electricity problems, the growing prominence of more efficient technologies and the rising prices of fossil fuels will help create a highly lucrative industry for co-generation in South Africa.
New analysis from growth consulting company Frost & Sullivan (energy.frost.com), The South African Co-generation Market, estimates that this market will be worth $30.4 million by 2012. The market will experience significant growth of approximately 30 to 50 per cent per annum over the next five to ten years.
"Co-generation has the ability to achieve up to 90 per cent efficiency, while current generation in South Africa has less than 40 per cent efficiency," notes Frost & Sullivan Industry Manager Cornelis van der Waal. "With higher efficiencies, co-generation plants will be able to attain higher profit margins than regular sources of generation. This would offset the significant start-up and maintenance costs in the long-run."
Frost & Sullivan expects the cogeneration sector to experience a compounded average growth of 48 per cent for the next five years from 2007. The potential spike in energy demands linked to the 2010 World Cup will provide impetus to the industry. Furthermore, the market is set to expand significantly to meet Eskom's plans of increasing its total output energy level to 900 MW through co-generation by 2012.
Sizeable start-up costs are one of the main restraints hindering companies from establishing co-generation plants. For instance, a 3 MW turbine costs $1.37 million, while burners can cost between $8 million to $20 million.
"Despite the offer of financial assistance from Eskom and the government, the market is adopting a cautious approach," notes Van der Waal. "Joint ventures in the private sector could however help minimise start-up costs."
If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the investment analysis and growth opportunities in the South African co-generation market, then send an email to Patrick Cairns, Corporate Communications, at patrick.cairns[.]frost.com, with your full name, company name, title, telephone number, fax number, and email address. Upon receipt of the above information, an overview will be sent to you by email.
The South African Co-generation Market is part of the Energy & Power Growth Partnership Service programme, which also includes research in the following markets: Advantages and Challenges of Cogeneration, a Strategic Analysis of the Zambian Electricity Industry, and a Strategic Analysis of the Nigerian Electricity Industry. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
About Frost & Sullivan
Frost & Sullivan, the Global Growth Consulting Company, partners with clients to accelerate their growth. The company's Growth Partnership Services, Growth Consulting and Career Best Practices empower clients to create a growth focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents.