Clean and Green Technologies – What is the Fuss All About?

Kee Wai FunSenior Industry Analyst

Technical Insights

October 13th, 2010

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Who is Frost & Sullivan?

Industry Coverage:

1. Aerospace & Defense2. Automotive & Transportation3. Chemicals, Materials & Food4. Electronics & Security5. Energy & Power Systems6. Environmental & Building Technologies7. Healthcare8. Industrial Automation & Process Control9. Information & Communications Technologies10. Measurement & Instrumentation

• The Growth Consulting Company • Over 10,000 clients worldwide including emerging

companies, the global 1000 and the investment community

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The ‘Nine’ Technology Clusters in our Radar

Sensors &

Automation

Materials&

Coatings

Clean &

Green Tech

LifeSciences&

Biotech

Medical Devices&

Imaging TechAdvanced

Manufacturing

Information&

Communication Tech

MicroelectronicsEnvironmental

&Building

Tech

Coverage Verticals

Automation & ElectronicsAutomotive & TransportationAerospace & DefenseInformation & Communication TechnologyHealthcareChemicals, Materials & FoodsEnvironmental and Building TechnologyEnergy and Power Supply

I

IV

VII

II

V

VIII

III

VI

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The ‘Nine’ Clusters span across the ‘Eight’ different Industry Verticals with a Global Focus

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Cleantech & Greentech Technology Cluster

Technologies/ platforms covered

Geothermal

Fuel Cells

CSP Solar

AdvancedLighting

Wind

Carbon Capture

Advanced Batteries

Biofuel

Wave PV Solar

Coverage

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Components of the Climate System

Source: Climate Change 2007, the Fourth Assessment Report (AR4) of the United Nations Intergovernmental Panel on Climate Change (IPCC)

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Source: Climate Change 2007, the Fourth Assessment Report (AR4) of the United Nations Intergovernmental Panel on Climate Change (IPCC)

The Greenhouse Effect

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Fourth Assessment Report of the UN Intergovernmental Panel on Climate Change (IPCC)

Climate Change 2007, the Fourth Assessment Report (AR4) of the United Nations Intergovernmental Panel on Climate Change (IPCC), is the fourth in a series of reports intended to assess scientific, technical and socio-economic information concerning climate change, its potential effects, and options for adaptation and mitigation. The report is the largest and most detailed summary of the climate change situation ever undertaken, involving thousands of authors from dozens of countries, and states in its summary:

"Warming of the climate system is unequivocal.""Most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.“

The Working Group I Summary for Policymakers (SPM) was published on 2 February 2007 and revised on 5 February 2007. The full WGI report was published in March, and last updated on 5 September 2007. A 34-page Frequently Asked Questions document has been made available.

The report was produced by 620 authors and editors from 40 countries, and reviewed by more than 620 experts and governments. Before being accepted, the summary was reviewed line-by-line by representatives from 113 governments during the 10th Session of Working Group, which took place in Paris, France, between 29 January and 1 February 2007.

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Fourth Assessment Report of the UN Intergovernmental Panel on Climate Change (IPCC)

Source: Climate Change 2007, the Fourth Assessment Report (AR4)

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Atmospheric Concentrations of Greenhouse Gases

Source: Climate Change 2007, the Fourth Assessment Report (AR4)

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Increased Global Mean Temperature

Source: Climate Change 2007, the Fourth Assessment Report (AR4)

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Sector Key mitigation technologies and practices currently commercially available

Key mitigation technologies and practices projected to be commercialized before 2030

Energy Supply

Improved supply and distribution efficiency; fuel switching from coal to gas; nuclear power; renewable heat and power (hydropower, solar, wind, geothermal and bioenergy); combined heat and power; early applications of CCS (e.g. storage of removed CO2 from natural gas)

Carbon Capture and Storage (CCS) for gas, biomass and coal-fired electricity generating facilities; advanced nuclear power; advanced renewable energy, including tidal and waves energy, concentrating solar, and solar PV.

Transport

More fuel efficient vehicles; hybrid vehicles; cleaner diesel vehicles; biofuels; modal shifts from road transport to rail and public transport systems; non-motorised transport (cycling, walking); land-use and transport planning

Second generation biofuels; higher efficiency aircraft; advanced electric and hybrid vehicles with more powerful and reliable batteries

Buildings

Efficient lighting and daylighting; more efficient electrical appliances and heating and cooling devices; improved cook stoves, improved insulation; passive and active solar design for heating and cooling; alternative refrigeration fluids, recovery and recycle of fluorinated gases

Integrated design of commercial buildings including technologies, such as intelligent meters that provide feedback and control; solar PV integrated in buildings

IndustryMore efficient end-use electrical equipment; heat and power recovery; material recycling and substitution; control of non-CO2 gas emissions; and a wide array of process-specific technologies

Advanced energy efficiency; CCS for cement, ammonia, and iron manufacture; inert electrodes for aluminium manufacture

Agriculture

Improved crop and grazing land management to increase soil carbon storage; restoration of cultivated peaty soils and degraded lands; improved rice cultivation techniques and livestock and manure management to reduce CH4 emissions; improved nitrogen fertilizer application techniques to reduce N2O emissions; dedicated energy crops to replace fossil fuel use; improved energy efficiency

Improvements of crop yields

ForestryForestation; reforestation; forest management; reduced deforestation; harvested wood product management; use of forestry products for bio-energy to replace fossil fuel use

Tree species improvement to increase biomass productivity and carbon biosequestration. Improved remote sensing technologies for analysis of vegetation/ soil carbon sequestration potential and mapping land use change

WasteLandfill methane recovery; waste incineration with energy recovery; composting of organic waste; controlled waste water treatment; recycling and waste minimization

Biocovers and biofilters to optimize CH4 oxidation

Key Mitigation Technologies – Green Technologies

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Focus Points

Green Buildings

Carbon Capture and Storage

Solar Photovoltaics

Clean and Green Tech - Industry Perception

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Industry Perception

Clean & Green Technologies Energy Generation/

Storage

Green Buildings

Environmental remediation

Green Agriculture

Clean production/Monitoring

Green Innovation—Product- or Technology-enabled engineering, design and manufacturing approaches, which drive changes in products, business processes and systems to achieve energy efficiency and

preserve the environment.

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Energy Generation

Solar Photovoltaics

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Energy Generation

…

Wind Energy

Biofuels

Concentrated Solar Power; Silicon PV panels; Nanobased solar energy; Microinverters; CIGS

thin film panels; Solar lighting; Solar thermal storage; Organic dye-sensitized solar cells

Scale to large size wind turbines; Advanced materials and manufacturing; Deep sea wind

turbine technologies; Small Turbines; Low speed direct drive generators

Alternative Feedstock; Second general biofuel production; Biodiesel; Algal biofuel technologies;

Bio/Chemical catalysts

Geothermal heat pumps, Well Construction Fluids; Advanced Materials; Direct use of Geothermal

energy

Solar Power

Geothermal

Current Technologies

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Solar Power versus Primary Energy Consumption

Solar Energy

Wind Energy

Biomass

Geothermal Energy

Hydro Power Ocean Power

Solar power has the biggest potential

among all renewable energy

sources.

The energetical potential of global

solar irradiation is about 1800 times

bigger than the demand for primary

energy.

In the future, strong growth of

renewable energies is expected,

specifically in solar power.

Solar power has the potential to

meet more than 50% of global

primary energy consumption.

Actual global primary energy consumption

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Solar Power – Technology Segmentation

Concentrated Solar Power

• North America Installed Capcity: 509 MWInvestment CAGR: 38.1%

• EuropeInstalled Capacity: 305 MWInvestment CAGR: 29.9%

• Asia Pacific Installed Capacity: 2 MWInvestment CAGR: 104.4%

• Rest of the World Installed Capacity: 0 MW

Photovoltaics

• North America Installed Capacity: 1,626 MW Revenues: 35%

• EuropeInstalled Capacity: 12,926 MWRevenues: 23.9%

• Asia Pacific Installed Capacity: 3,317 MWRevenues: 38.8%

• Rest of the World Installed Capacity: 2,221 MWRevenues: 17.5%

Trough Technology

Dish StirlingEngine technology

Linear Fresnel Reflector

Power Tower Technology

1st Generation

Monocrystalline Silicon

Polycrystalline Silicon

Ribbon Silicon

2nd Generation

Amorphous Silicon

Micromorph Silicon

Cadmium Telluride

Copper Indium Gallium Diselenide

3rd Generation

Organic Dye-sensitized PV

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Photovoltaics – Technology Analysis

Advantages Disadvantages Average Efficiency (%)

1st Generation

• Higher energy conversion efficiency per square meter

• Better suitable for space constraints• Higher reliability and proven Performance

• More reliant on feedstock availability and its purity• Higher production cost and complex manufacturing process• Requires more raw material

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2nd Generation

• Lower material costs• Lower production cost and automated process• Better suitable for curved, glass, and plastic

surfaces• Aesthetically pleasing• Better suited for environments with less optimal

light conditions

• Lower efficiencies when compared to crystalline cells• Higher installation costs• Requires large array areas to deliver the same power in

comparison to crystalline technologies• Requires expensive tracking mechanisms• Requires direct sunlight and operates in sunny, dry climate

5 - 20

3rd Generation

• Less-expensive manufacturing process• Are lightweight and flexible

• Lower power conversion efficiencies than silicon-based devices• Undergo degradation over time

2 - 5

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Photovoltaics – Installed Capacity by Technologies

Shortage of poly silicon has limited the growth of crystalline technologies in the last few years. However, it has offered a

great opportunity for the PV thin film industry to grow and establish thin film as a major PV technology solution. Thin film

technologies are expected to develop in the next ten years.

PV Solar Power Market: Percent of Installed Capacity by Technologies - 2009

Amorphous Silicon (a- Si)61%

Cadmium telluride (CdTe)34%

Copper Indium Gallium Diselenide

(CIGS)4%

DyeSensitized Solar Cells (DSSC)

1%

Crystalline Silicon81%

Concentrated PV1%

Thin Film18%

Amorphous Silicon (a- Si)61%

Cadmium telluride (CdTe)34%

Copper Indium Gallium Diselenide

(CIGS)4%

DyeSensitized Solar Cells (DSSC)

1%

Crystalline Silicon81%

Concentrated PV1%

Thin Film18%

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Photovoltaics – Innovation Landscape

Advances in R&D

Changing Industrial Processes

Increased Production

Reduction of Production costs

R&D for Thin film Technologies– Market share is likely to increase to about 35 % in 2020

Cost of Wafer production–Reduction of average silicon consumption for crystalline silicon

Improvements in average efficiency– Mono/Multi-crystalline and Ribbon Silicon

Material developments–Optimizing cell concepts, Polymer solar cells, Organic dye-sensitized cells

Lifetime improvement of solar modules

Nanotechnology in PV–Nano layers, Nano structured surfaces, Quantum dots, Nanoparticles, Nanoporous coatings

Application research–Building Integrated Photovoltaics, Integration into National grid

• First Solar Inc.

• Sun tech Power

• Ja Solar Holdings Co., Ltd.

• Q-cells SE

• Sharp Electronics Corp.

• Sun power Corp.

Major Players

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2.3 billion tax credit financingPromote clean energy manufacturing projects in 43 states in the United States

United States

$874 million - Solar photovoltaics

$370 m$172 m$286 m

$370 million goes to the producers of polysilicon; about $172 million more goes to companies that make polysilicon-based PV modules.

About $286 million, is to be directed toward the manufacture of thin-film products

Photovoltaics – Government Support

China

The Ministry of Finance and the Ministry of Housing and Urban-Rural Development--a national subsidy program for building-integrated solar photovoltaic buildings (B.I.P.V.) and rooftop systems in rural and remote regions.

Japan

Largest-ever economic stimulus program–$55 billion over 5 years. The plan includes a huge boost for solar photovoltaic (PV) systems

Solar homes and communities plan--aimed at using 150 million AUD to subsidize small-scale distributed solar implementation through a rebate of 8000 AUD for the first kilowatt of installed capacity.

Australia

Government support

for Photovoltaics

• Research and Development Programs• Domestic and Large-scale Field Trials • Major PV-demonstration programs• Feed-in-Tariffs or Incentives• Tax Credits

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Environmental Remediation

Carbon Capture and Storage

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CCS – Technology Segmentation

Power and Heat

Amine absorption

Power and heat

Gasification + CO2 Separation

Air Separation Unit

Power and heat

Cleaned Flue Gas

CO2 compression and dehydration

Cleaned Flue Gas

Fossil Fuel

Air

Fossil Fuel

Air

Fossil Fuel

Air

Post-combustion

Pre-combustion

Oxy-Fuel

Carbon captureTechnological Pathways

Carbon Transport – Methods

High pressurepipelines

CO2 Sources

Trucks Ships

CO2 transport has been utilized for over 30 years in North America; over 30 metric tones (Mt) CO2 from natural and anthropogenic sources are transported per year through 6,200 km of CO2 pipelines in the USA and Canada.

Carbon Storage – Options for geological storage

Deep unminable coal seams

Oil and gas reservoirs

Saline formations

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CCS - Technology Status

CCS Technology Current Status

Post-Combustion Technologies

• Existing technologies with hundreds of plants in operation in gas processing and

chemicals industry.

• Largely unproven for large-scale flue gas mixtures.

• Technical challenge - scale and integration of complete systems for combustion

gases.

Pre-Combustion Technologies

• Several coal IGCC plants in operation around the world.

• Several demo projects under development.

• Challenges - Scale/integration for large IGCC plants

Oxy Fuel Technologies

• Trials of small scale plants in progress in the power sector (<30 MW); 250 MW

plants proven in blast furnaces.

• Challenges: High capital, operating costs, and lack of warranty

Carbon Dioxide Storage

• Deep saline formations--most promising long-term storage option

• Need for both regional and site-specific exploration to establish viable storage

resources.

Stakeholders

• Research organizations and

universities

• Government bodies

• Technology developers that

develop the technology for

licensing

• Boiler and combustion turbine

manufacturers involved in

technology development

• Utility companies and power

plant operators who will be the

users of the technologies

• Operators of transportation and

storage of CO2

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Concerted efforts are needed from the government, academia, and industry for

faster commercialization

Relevant Trends

• Government Funding toward CCS technologies • Market Pull from the Power Industry

• Increase in number of CCS projects worldwide

Competency of Carbon

Capture and storage

Challenges

• Highly Expensive • Carbon capture in power plants unproven on a commercial scale

• Lack of proven long-term storage

• Reducing efficiency of power plant resulting in low amount of power produced

CCS – Technology Competence

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CCS – Government Funding

Australia–The Australian government has committed AUD 2 bn (USD 1.65 bn) in funding for large-scale CCS demonstrations in Australia. In addition, Australia has committed AUD 100 million (m) a year for three years for the formation of the Global CCS Institute.

Canada–The Canadian Federal government has announced financial support of CAD 1.3 bn (USD 1.2 bn) for research and development (R&D), mapping and demonstration project support. In addition, the Province of Alberta has assigned CAD 2 bn (USD 1.8 bn) in funding to support CCS deployment.

European Union–The European Union (EU) has set aside the revenue from the auctioning of 300 m credits within their Emissions Trading Scheme for the support of CCS and renewable energy. The EU has also allocated EUR 1.05 bn (USD 1.5 bn) from their economic recovery energy program for the support of seven CCS projects.

Japan–The Japanese government has budgeted JPY 10.8 bn (USD 116 m) for study on large-scale CCS demonstration since fiscal year 2008.

Norway–Since 1991, Norwegian authorities have had an offshore CO2 tax for oil and gas operations; this tax is currently NOK 230 (USD 40)/MtCO2. Norway has also announced the allocation of NOK 1.2 bn (USD 205 m) for CCS projects.

UK–In addition to the broader EU funding, UK has announced funding for up to four CCS projects. UK has recently announced that the remaining projects will be funded through a levy on electricity suppliers, to take effect in 2011.

United States–The recent Economic Recovery Act includes USD 3.4 bn in funding for clean coal and CCS technology development. USD 1.0 bn has been allocated for developing and testing new ways to produce energy from coal. USD 800 m will augment funds for the Clean Coal Power Initiative with a focus on carbon capture, and USD 1.52 bn will fund industrial CO2 capture projects, including a small allocation for the beneficial reuse of CO2.

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CCS Global Developments – Current Status

Commercial CCS projects

Sleipner: The carbon dioxide is re-injected about 1000 m below the sea floor into the Utsaira saline formation. The formation is estimated to have a capacity of 600 billion tonnes of carbon dioxide.

In Salah: Krechba geologic formation lies about 1800 m below ground and is expected to receive 17 million tonnes of carbon dioxide over the period of the project.

Snohvit: Europe’s first liquefied natural gas (LNG) plant captures carbon dioxide for injection and storage. This project captures about 700,000 tonnes a year of carbon dioxide.

Weyburn Midale: 2.8 million tonnes a year of carbon dioxide is captured at the great plains synfuels plant in the US state of North Dakota.

Australia launched in April 2009, the Global CCS Institute (GCCSI) to foster international collaboration for near-term, large-scale demonstration projects.

In Brazil, oil company Petrobras is investing in two to four large-scale demonstration projects.

A consortium of companies in China is moving forward with the GreenGen projec.

France is developing smaller-scale demonstration projects as part of a EUR 1 billion funding package for research and development; these projects will be expanded after their performance is assessed.

Italy’s Enel, the national electricity company, is developing one pilot plant.

Norway is continuing its leadership by developing the Mongstad and Karstø projects.

South Africa will launch a CCS Centre in September 2009, and plans to rapidly build capacity with the aim of having at least one full-scale project operational by 2020.

The United Arab Emirates has three large-scale CCS projects under development, building on the region’s expertise in enhanced oil recovery.

UK is advancing CCS via its large-scale demonstration competition, which will announce one major project to be operational by 2014; in addition, in April 2009 the government announced proposals to establish a mechanism to support up to four large-scale CCS demonstrations and to require any new coal-fired power plant over 300 mW capacity to demonstrate CCS on a proportion of its capacity.

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Green Buildings

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Green Buildings – Technology Segmentation

Green Building Technologies

Heating, Ventilation and Air Conditioning

Systems

Building Automation and Management

Systems

Smart and Vacuum Windows

Integrated Renewable Energy systems

Low-VOC Coats, Paints, Plasters,

and Sealants

Green Materials

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Green Buildings – Industry scenario

Emerging Technologies

Future TrendsBenefits and Barriers

Industry Trends

Smart windows, vacuum windows and door panes, online dashboard

programs, self-powered wireless sensors, insulating nanocoatings and

aerogels, self-cleaning and depolluting materials, organic light-emitting

diodes (OLEDs) and quantum dot lighting, organic thin-film solar cell

technologies, efficient BEM systems, water management systems, roof

top PVs, green roof tops, low-VOC emitting carpets and paints. Product

solutions are building integrated photovoltaics, smart grids and meters

connected to BIPVs, solar heaters, green concrete products, and heat

insulating windows and doors.

Challenges

Drivers

Increased focus to reduce energy consumption Reduced operating costs The ‘green’ brand Reduction of carbon emissions

Lack of Incentives Market Demand is not yet fully established

Need for R&D in Asian countries

• Integrated Renewable energy systems

• Efficient insulation of enclosed spaces

• Efficient building automation of commercial buildings.

• Use of only low-VOC paints and coatings.

• Use of ecofriendly materials in HVACs.

• Favorable legislations.

Consolidation of the green buildings industry

Standardization of design and associated processes

Complexity and cost reduction in technology use

Green house gas (GHG) inventory and management

Green building certifications

Zero energy buildings (ZEBs)

New carbon regulations.

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Competition to develop Green Technology Industries is intensifying globally. Countries across the world are investing substantial resources to develop Green Technology Industries

United Kingdom• UK has launched Low Carbon

Transition Plan to provide framework strategy on how to tackle climate change

USAIts green policy outline: - Help create five million new jobs by

strategically investing $150bn over the next ten years to catalyse private efforts to build a clean energy future.- Put 1 million (American-built) plug-in hybrid cars on the road by 2015- Ensure 10% of electricity from renewable sources by 2012, and 25% by 2025

China• China has adopted

"green credit" and "green insurance" in recent months and has plans for "green taxation" and "green trade" to help clean up the economy.

Japan• 2008 - Yasuo Fukuda, PM,

Japan, plans to designate 10 environmental model-cities which will work hard to reduce greenhouse gases.

• Under the terms of Kyoto Protocol treaty, Japan is supposed to cut carbon-dioxide emissions by 6% from 1990 levels by 2010.

Europe• Kyoto Protocol lays

out cuts of 8% by Switzerland, most Central and East European states, and the European Union

Keeping in mind government’s vision and global developments, what should be the way forward for Malaysia?

Global Green Initiatives

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Key Trends and Future Direction

Cleantech/Greentech

Technology: Renewables Move Into Traditional Sectors

Economics: Stimulus Funds Encourage Development and Adoption

Customers: Economic Circumstances Dictate Green Purchasing Decisions

Legal: Technology Investors Vie to Protect IP

Systems: Smart Grids Let Utilities Increase Energy Production Efficiency

Politics: Politicians Push Clean and Green Regulations

Markets: Lookk for Growthin Sectors that Will Benefit from Energy

Efficiency, i.e. Smart Homes

Social: Consumers and Voters Demand Clean Air and Water, Climate Change

Smart Grid Control Centre

Wind Power

Solar Power

Energy Storage

Hospital

“Smart Grids”

Own Generation

“Energy Sources & Storage”

Top3

Areas

“Upgrading Water & Wastewater”

Air/Seaports

Road & Rail

PowerWater0

5,000

10,000

15,000

20,000

25,000

$ bi

llion

s

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Innovating to Zero Carbon Emission!

Solar PV Cells

Travelling Wave Reactor (TWR)

Bio fuels

Geothermal Energy

Ocean Energy

Hydro Power

In terms of regions, Asia and Oceania has the biggest installed capacity followed by Europe. Meanwhile, China, United States, Canada, Brazil, and Russia have the biggest hydropower markets.

Capacity of Solar Power to Increase from 21,540 MW in 2020 to 630,000 MW in 2040

Wide deployment of TWRs could enable projected global stockpiles of depleted uranium to sustain 80% of the world’s population at U.S. per capita energy usages for over a millennium

Share of Geothermal Electricity in total electricity produced in 2020 is 1.5%

INNOVATING TO

ZERO CARBON EMISSION!

At this moment, the ocean’s potential for energy generation is 5000 times more than the current usage of electricity. In other words, $10,000 trillion sales of electricity can be generated from the ocean alone.

Focus has shifted to second-generation biofuels, which are anticipated to address controversies surrounding biofuels by producing fuel in a sustainable manner.

Wind Energy

To Account for 1,900,000 MW of electricity production in 2020

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For Additional Information

Kee Wai FunSenior Industry AnalystTechnical Insights+603 6207 1051waifun.kee@frost.com