Renewable energy sources driving the construction of new utilities
In terms of value, 79% of power generation construction projects over the past five years have been renewables, with gas and nuclear together accounting for 21%. While construction projects for power generation from solar energy account for the largest proportion of contracts awarded by volume; in terms of value, solar projects represent only 4% of the total value of energy-related construction projects.
Laura Pardoe, Product Manager at AMA Research and Editor-in-Chief of Utilities Construction: Gas and Electric Market Report, comments: “This is an incredibly exciting time to watch construction in the energy sector and chart the transition in real time to renewable sources of energy production. There has been a 70% increase in electricity generation from renewables since 2016; over the same period, 80% of contract awards were for low-carbon options indicating a clear direction for future travel. The twin driving forces for energy security and carbon neutrality mean that construction projects are focused on producing sustainable energy using natural resources.
During the period 2016 to 2021 (Q2), wind sector projects (onshore and offshore) accounted for just under half of all power generation projects, by value, and 58% of all renewable projects . Increasing wind and solar power generation is the primary focus to further increase renewable energy generation to reach net zero by 2050. While most of the generation needed should be provided by renewable energies, it is also necessary to have more reliable sources of energy such as nuclear or electric power stations that burn hydrogen or gas with carbon capture and storage.
In 2020, electrical construction in the UK contributed 41% of total infrastructure work, up from 24% in 2019. Electrical construction output grew 66% year-on-year in 2020. Electricity is expected to remain a key driver of medium-term growth within the gas and power market as generation capacity is renewed and larger-scale renewable generation, particularly offshore wind and biomass, is commissioned.