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Development of Renewable Energy Industry and Increased Outsourcing Create Significant Growth Potential for European Renewable Power Plant Servicing Market

Posted on: Tuesday, 25 April 2006, 06:00 CDT

LONDON, April 25 /PRNewswire/ -- Rapid expansion in the installed capacity of renewable power plants in Europe will be accompanied by the rising need for related power plant services. Even as renewable power plant operators look to outsource their service needs, servicing companies will need to offer cost-effective, value-added services to their clients to promote uptake levels.

Frost & Sullivan (http://www/. energy.frost.com) finds that European Renewable Power Plant Servicing Market earned revenues of US$417.9 million in 2005 and estimates this to reach US$1.2 billion in 2012.

"Country-specific policies and incentives to foster renewable energy supply complemented by activities at the European level, mainly through the European Commission, are expanding the renewable power plant industry," notes Frost & Sullivan Research Analyst Rajat Kumar. "This will create huge growth potential for the European renewable power plant servicing market."

At the same time, renewable power plant operators with limited experience in the actual running of their plants are increasingly outsourcing their servicing activities, including day-to-day operation and maintenance, to third-party specialists.

While this trend of outsourcing non-core activities is allowing plant operators to focus on their core competencies, third-party services providers also offer the additional advantage of minimised service risks through the provision of a fixed-price contract for an appreciable length of time.

However, scepticism regarding outsourcing these servicing activities continues to persist with many operators preferring to carry out the operation and regular maintenance themselves rather than relying on specialised servicing companies.

"The utilities, with their vast experience in the operation of power plants, suffer from a traditional mindset and remain reluctant to outsource their servicing requirements," explains Mr. Kumar. "They prefer to employ a full-time staff to carry out these services and view power generation as a core activity instead of looking at the power plant as an asset whose job is to earn a return just like any other asset."

This situation is similar for industrial power plants with most generally reluctant to cede control over plant maintenance and operation. However, this sector is increasing the amount of maintenance activities outsourced by it. Moreover, with competition intensifying, industrial plants will be under pressure to continue with the outsourcing approach.

Faced with growing price competition, service providers will need to offer clients improved service offerings with maximum value. Potential strategies in this regard could include the bundling of several services to make the final offer more attractive as well as catering to niche markets in order to differentiate their offerings from that of other service providers.

"Moving towards a complete asset management of the power plant is a strategy that promises to give a big boost to the market in the medium and long term," concludes Mr. Kumar. "However, for this to happen, the historic perspective of the utilities, that view operations and maintenance as their core competency, has to change."

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the European Renewable Power Plant Servicing Market then send an e-mail to Magdalena Oberland- Corporate Communications at with the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the information via email upon receipt of the above information.

Opportunities in Servicing Renewable Energy Plants in Europe is part of the Energy & Power Subscription, which also includes research in the following markets: North American Power Plant Services, North American Wind Markets, Chinese Renewable Energy Markets and Asian Geothermal Energy Markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com/.

Opportunities in Servicing Renewable Energy Plants in Europe B528- 14

List of keywords in this press release: Europe, power plant services, power plant servicing, power plant, renewable energy plants, renewable power plant servicing, renewable energy, renewable power plant industry, European Commission, European renewable power plant servicing market, industrial plants, third-party services providers, utilities, outsourcing, power plant services outsourcing

List of key industry participants: Vestas, Enercon, GE Wind, Gamesa Eolica, Siemens wind power services, Nordex, RE power, De wind, Garrad hassan, BONUS, MADE wind, Shell Solar, Isofoton SA, GAIA solar, Versiko ASS, alstom hydropower, GE hydro, Andritz, Voith Siemens, Gilbert Gilkes and Gordon, Fortum, VA tech, babcock & wilcox volund, AKER Kvaerner, Lurgi Lentjes, ansaldo, ormat, GE Biomass

Contact: Magdalena Oberland Corporate Communications - Europe P: +44-207-915-7876 E: magdalena.oberland@frost.com Trisha Bradley Corporate Communications - Americas P: +1-210-247-3870 E: trisha.bradley@frost.com Donna Jeremiah Corporate Communications - Asia Pacific P: +603-6304-5832 E: djeremiah@frost.com Surbhi Dedhia Corporate Communications - India P: +91-22-2832-4705 Ext: 131 E: sdedhia@frost.com Sharmin Jassal Corporate Communications - Australia P: +61-2-8247-8900 E: sjassal@frost.com

Frost & Sullivan

CONTACT: Trisha Bradley, Corporate Communications - Americas, P:+1-210-247-3870, E: trisha.bradley@frost.com

Source: PRNewswire

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