Renewable energy are driving new utilities construction: 79% of energy generation construction projects related to renewable energy.

Renewable energy are driving new utilities construction

In value terms, 79% of energy generation construction projects over the past five years have been related to renewable energy, with gas and nuclear representing a combined 21%. While construction projects for energy generation using solar power represent the largest proportion of contract awards by volume; in value terms, solar projects represent just 4% of total value across energy related construction projects. 

Laura Pardoe, Product Manager at AMA Research and editor of the Utilities Construction: Gas and Electric Market Report comments “This is an incredibly exciting time to be monitoring construction in the energy sector and charting the real time transition to renewable sources of energy generation. There has been a 70% increase in electricity generation from renewables since 2016; over the same period 80% of contract awards have been for low carbon options showing a clear direction of future travel. Twin forces driving for energy security and carbon neutrality mean construction projects are focused on sustainable energy generation utilising natural resources.”

In the period 2016 to 2021(Q2), projects in the wind sector (onshore and offshore) made up just under half of all energy generation projects, by value, and 58% of all renewable projects. Increasing generation from wind and solar is the focus to further increase renewable generation to deliver on the net zero target by 2050. While the bulk of generation needed is planned to be provided by renewables, there is also need for more reliable sources of power such as nuclear or power stations that burn hydrogen or gas with carbon capture and storage.

In 2020 UK electricity construction contributed 41% of total infrastructure work, an increase from 24% in 2019. Electricity construction output grew 66% year on year in 2020. Electricity is likely to remain a key driver of growth into the medium-term within the gas and electricity market as generation capacity is renewed and larger-scale renewables generation, particularly offshore wind and biomass, is commissioned.

Renewable energy are driving new utilities construction

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