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population grows and increases in affluence and
economic activity, as well as by other end-uses,
such as petrochemicals.
Increased power production from renewable
sources, which include – although to a lesser extent
- hydro and nuclear (the latter mostly in China but
also in other countries), will be one of the dominant
themes over the next decades. While decarboniza-
tion policies and several societal trends are some
of the key drivers behind this surge, an important
foundation is the huge improvement in economics
of power produced from wind, offshore and onsho-
re, and from photovoltaic plants (figure 7). Where-
as power production from wind has been broadly
competitive with that from fossil fuel sources on
purely economic grounds for some time, the pho-
tovoltaic energy is rapidly closing the gap. Therefo-
re, in a few years there will be no longer a need for
subsidies or incentives, and PV will be able to com-
pete on purely economic grounds. The share of
power production from renewables, therefore, will
grow rapidly almost everywhere (figure 8). The EU
Fig. 4 – World primary energy consumption by fuel – Source: BP (2017)
will continue to lead, but it will be followed by most
other countries. Indeed, China is rapidly becoming
serious about the needs for cleaner energy and is
rapidly transforming their industry with numerous
initiatives. Even in the USA, in spite of the known
pronouncements of the current Administration, we
are witnessing a decisive transformation towards
cleaner energy for purely economic reasons. All this
will be reflected in growing demand for investment
in new plants.

The renewables are poised to grow
Fig. 5 – Expected changes in total energy demand over the next 25 vs. the last dramatically, as their power production
25 years – Source: IEA (2017) costs have come down to be almost fully
competitive with traditional fossil fuel
sources

This poses a significant challenge to our E&C
industry, typically used to a completely different
type of new capital investments. Many players
are starting to adapt to the new trends, particu-
larly as some new PV and particularly wind of-
fshore plants are becoming very large and very
Fig. 6 – Expected changes in world oil demand by sector 2015-2040 - Source: complex, and thus require the project manage-
IEA (2017)

Impiantistica Italiana - Gennaio- Febbraio 2018 19