Market For Renewable Energy Institute - Research Proposal Example

MARKET RESEARCH PROPOSAL FOR RENEWABLE ENERGY INSTITUTE Biofuels are fast becoming a possibility as a sustainable, renewable, alternative energy source and are being considered as a viable option by many world nations and economists. It is expected to take over as the main energy source, especially in the transport as an environment friendly way of getting our vehicles on the road. These fuels are made from biological sources like cereals, grains, grasses and organic waste (Roubanis), and wide spread use of them will not only contribute to a pollution-free atmosphere, but make economies more farmer-oriented also. The importance of this energy source lies in the fact that many countries can exploit it as a domestic source of fuel, rather than importing fossil fuels from oil-rich foreign countries. Biofuel is the renewable energy, which extracts ethanol from living plants. The ethanol can be further used for vehicles without much modification to the vehicles. Today’s modern world is heavily dependent on transport fuels, particularly gasoline and diesel. These are almost entirely derived from fossil fuels. Severe pollution in large urban areas of the USA and Europe has prompted governments to seek alternatives (Hamilton, 2004). Representatives from 165 countries met in Nairobi, Kenya in November 2006, to discuss the impact of global warming and the ways to combat it. Unfortunately, the meeting ended inconclusively, but the meeting did its best to chart out steps to reduce the dependence of fossil fuels, which is now the major backbone of world economies (Sharma, 2006). World nations have been concerned about the greenhouse effect and the subsequent global warming resulting from the Carbon dioxide emissions from our vehicles and factories that use fossil fuels like petrol, diesel and coal. There is no disagreement that we have to reduce the Green House Gases (GHGs) that is released and accumulated into the atmosphere; both the 1992 U.N Conference on Environment and Development in Rio De Janeiro and the Framework Convention on Climate Change as well as the Kyoto protocol of 1997 laid out clear-cut plans to reduce the emissions from 35 industrialized countries. Only few countries in Europe among the most developed nations of the world and chief contributors to GHGs have taken stringent steps to tackle the problem of global warming. In this scenario, an alternative energy resource is gaining importance – a source of energy that doesn’t harm the nature, but can coexist peacefully with it. A report by the House of Commons of the United Kingdom explicitly states that ‘Biofuels are the only source of renewable power currently suitable for road transport, and as such have an important role in reducing the environmental impact of this sector of the economy’. Developments in Australia have been along similar lines to those of the USA, although we are just at the start of establishing a bioethanol industry. In 1927 the Plane Creek Power Alcohol Factory commenced producing ethanol in Sarina, on the central Queensland coast. In 1929 Shell entered into a Joint Venture to market ethanol blended in gasoline, and from 1935 to 1957 the Queensland Motor Spirit Vendors Act mandated the sale of 10% ethanol in gasoline in Queensland. CSR acquired half the Sarina plant in 1954 and the remaining half in 1971. In 1989 the plant was upgraded, and further expanded in 1995 to 55 Mlpa. Field trials of “Petranol” were carried out by Shell/CSR in Mackay (1980s), BP in Brisbane (2002) and Caltex is currently trialing 10% ethanol blends in Northern Queensland. Manildra have supplied some 45 Mlpa of bioethanol from a waste starch stream at their wheat gluten and starch plant at Nowra since 1992. The product has been sold through some 200 outlets in regional NSW at blend concentrations up to 25% ethanol. Since 2003, government legislation has limited the addition of ethanol to gasoline to 10% throughout Australia (Hamilton, 2004). Alternative Energy – Solar Energy The Australian National University Center for Sustainable Energy Systems is a strong advocate for solar energy systems in Australia as an alternative to carbon dioxide emitting fossil fuels. Mass retrofitting and solar water heaters have been suggested as a way of controlling the emissions of green house gases into the atmosphere. However, Andrew Blakes of the ANU raised the problem of up front investment in the solarization that Australian citizens are facing. The landlords and the tenants tend to take a backseat in this investment, as they do not return any immediate benefits; both parties overlook the reduced cost benefits. Blakers (2006) suggests a method for funding solarization in Australian homes. The method is to establish a consortium to fund the solarization: the consortium is to include a solar water heater company, a house installation installer, a billing agency and a financier. (Blakers, 2006). It appears that the adoption of alternative energy is not as simple as the economics might suggest, and there are a myriad of social and political factors that are significant to any aspect of change. A combination of social science and biophysical science is being used in this project to find ultimately better solutions for energy production and consumption on remote islands. The lessons learnt in these locations provide invaluable contributions to understanding mainland scenarios (Barton, 2006). Market Research The key to introducing widespread use of renewable Biofuel is that it has to create a market for itself. Very few people are aware of the cheap, bio-friendly fuel that can power their homes, vehicles and offices. Solarization has made a mark and products that use solar energy have penetrated the Australian markets. For a long time, the renewable energy sources and especially Biofuel, has been the concern of environmentalists, economists and futuristic thinkers. Now, the time has come to bring it into the main stream and introduce Biofuel as the main source of energy, especially for transport. So, the vital question is – how to penetrate a market that is the strong hold of diesel and other petroleum products? How to convince the users about the advantages of using Biofuel, especially in making the world a safer place for the next generation? Any source of energy, when it has to be newly introduced, needs suppliers before they can reach the markets and the end users. The business success of introducing Biofuels is to be studied first. This would require a thorough analysis of the past success stories of biofuel in Australia as well as other countries. Sources like newspaper articles, research studies, government reports, and industry databases can be used. The next step is to create a niche market for biofuel using ethanol, which can be extracted from living plants. The following questions need to be addressed 1) What is the cost-effect analysis of the extraction process? 2) What is the time taken for the extraction process? 3) Is it a purely domestic solution to alternate, renewable energy and what are its implications as a commercial energy source? 4) How can the market be tapped for this? A complete marketing strategy has to be charted out for successful penetration for biofuels in Australia. Companies normally employ the strategy of focusing on incidental clients, transforming them into regular clients and then heavy clients. This strategy can be employed for biofuel market penetration; taking a survey of people who have tried out alternate energy sources in their homes. Focus can be on transforming them into regular clients, who are fully aware of the advantages of having a pollution-free environment-friendly energy, renewable energy source in their daily lives. Impact Biofuel Market Worldwide (2006) has examined the major trends in the renewable energy market and reached conclusions on the growth rate and the market viability of biofuels in the world market. The study reports that by the year 2010, the biodiesel production will go up to 12 billion litres, judging by the current growth rate of 3 percent a year. In 1998, according to a report of the International Energy Agency, 21 countries in the world had implemented biodiesel projects in small capacity. A study of these projects show that the markets have to be penetrated in small ways at first, step by step, before biofuels can be fully established as the renewable source of energy in the Australian markets. The Australian Government already has a couple of initiatives that help in exploiting the market for biofuels. In 2000-01 Australian gasoline consumption rose through 18,000 Mlpa and reached 18,873 Mlpa for 2002-03. If the growth rate averaged 2% pa, the demand would have reached 20,000 Mlpa by 2006. This growth could be provided by blending 10% ethanol into gasoline rather than importing more gasoline. Under such a scenario the market potential for bioethanol blended into gasoline is in the order of 2,000 Mlpa. In a similar context, diesel consumption in Australia rose through 12,900 Mlpa in 2000/01 and reached 13,888 Mlpa in 2002/03. By 2011 and at a growth rate of 2% pa, the potential for a 20% blend of biodiesel (B20) to cover the growth would be 3,150 Mlpa of biodiesel. At the B2 level it would be 315 Mlpa. These two scenarios assume blending for all transport fuel consumed in Australia (Hamilton, 2004). The very fact that biofuels are biodegradable and the fact that Australia is a strong exporter for agricultural products will increase the nation’s chances of being a large exporter of biofuels into other countries. This will also increase employment and industrial development of the Australian countryside, giving a boost to farmers and agricultural industry in general. Australia can reach the Kyoto Protocol targets of reducing its green house gases emission, thus contributing less to the global warming, with the introduction and sustained use of biofuels for all energy needs, and especially transportation. References 1. (2002-2003) Seventheeth Report of Session, United Kingdom Parlaiment, House of Commons Retrieved December 3, 2006 from http://www.publications.parliament.uk/pa/cm200203/cmselect/cmenvfru/929/929.pdf 2. Barton, D. 2006. Energy Options for Norfolk Islands. Retrieved December 3, 2006 from http://engnet.anu.edu.au/DEresearch/Norfolk/pages/what.php 3. Roubanis, N. Biofuels and their Growing Importance. Energy Statistics Working Group Meeting Retrieved December 3, 2006 from http://www.iea.org/textbase/work/2004/eswg/17_Liquid%20Biofuels.pdf 4. Blakers, Andrew. 2006. Solarization. Australian National University Retrieved December 3, 2006 from http://solar.anu.edu.au/docs/Solarization.pdf 5. Sharma, Kalpana. 2006. Should we care about Global Warming?. The Hindu Retrieved December 3, 2006 from http://www.hindu.com/2006/11/28/stories/2006112803331000.htm 6. Hamilton, Chris.2004. Biofuels Made Easy. Retrieved December 3, 2006from www.aie.org.au/pubs/biofuels.doc 7. Australian Ethanol Limited www.indcor.com 8. Ansoff’s product\market matrix. 2006. Retrieved December 3, 2006 from http://www.tutor2u.net/business/strategy/ansoff_matrix.htm 9. Renewable Energy Development Initiative, Government of Australia Retrieved December 3, 2006 from http://www.ausindustry.gov.au/content/level3index.cfm?ObjectID=B7C70A4B-E588-40C9-AD6542408BFD1AAB&L2Parent=AEB901E5-7CB8-4143-A3BF33B2423F9DA6 10. Biomass Technical Brief, Simon Ekless, Intermediate Technology Development Group, retrieved December 3, 2006 from http://www.itdg.org/docs/technical_information_service/biomass.pdf. 11. Reducing exposure to indoor air pollution, Intermediate Technology Development Group, 19 March 2004 Retrieved December 3, 2006 from http://www.itdg.org/?id=smoke_report_3 12. Ward, James. 2006. Peak on Oil Agenda:Notes from the Australian Institute of Energy Annual forum. Energy Bulletin 12 Nov 2006 Retrieved December 3, 2006 from http://www.energybulletin.net/22320.html 13. http://www.breitbart.com/news/2005/12/09/051209141924.flu6l9pn.html 14. www.greenfuelonline.com 15. http://www.ieabioenergy.com/IEABioenergy.php Read More

Only few countries in Europe among the most developed nations of the world and chief contributors to GHGs have taken stringent steps to tackle the problem of global warming. In this scenario, an alternative energy resource is gaining importance – a source of energy that doesn’t harm the nature, but can coexist peacefully with it. A report by the House of Commons of the United Kingdom explicitly states that ‘Biofuels are the only source of renewable power currently suitable for road transport, and as such have an important role in reducing the environmental impact of this sector of the economy’.

Developments in Australia have been along similar lines to those of the USA, although we are just at the start of establishing a bioethanol industry. In 1927 the Plane Creek Power Alcohol Factory commenced producing ethanol in Sarina, on the central Queensland coast. In 1929 Shell entered into a Joint Venture to market ethanol blended in gasoline, and from 1935 to 1957 the Queensland Motor Spirit Vendors Act mandated the sale of 10% ethanol in gasoline in Queensland. CSR acquired half the Sarina plant in 1954 and the remaining half in 1971.

In 1989 the plant was upgraded, and further expanded in 1995 to 55 Mlpa. Field trials of “Petranol” were carried out by Shell/CSR in Mackay (1980s), BP in Brisbane (2002) and Caltex is currently trialing 10% ethanol blends in Northern Queensland. Manildra have supplied some 45 Mlpa of bioethanol from a waste starch stream at their wheat gluten and starch plant at Nowra since 1992. The product has been sold through some 200 outlets in regional NSW at blend concentrations up to 25% ethanol.

Since 2003, government legislation has limited the addition of ethanol to gasoline to 10% throughout Australia (Hamilton, 2004). Alternative Energy – Solar Energy The Australian National University Center for Sustainable Energy Systems is a strong advocate for solar energy systems in Australia as an alternative to carbon dioxide emitting fossil fuels. Mass retrofitting and solar water heaters have been suggested as a way of controlling the emissions of green house gases into the atmosphere.

However, Andrew Blakes of the ANU raised the problem of up front investment in the solarization that Australian citizens are facing. The landlords and the tenants tend to take a backseat in this investment, as they do not return any immediate benefits; both parties overlook the reduced cost benefits. Blakers (2006) suggests a method for funding solarization in Australian homes. The method is to establish a consortium to fund the solarization: the consortium is to include a solar water heater company, a house installation installer, a billing agency and a financier.

(Blakers, 2006). It appears that the adoption of alternative energy is not as simple as the economics might suggest, and there are a myriad of social and political factors that are significant to any aspect of change. A combination of social science and biophysical science is being used in this project to find ultimately better solutions for energy production and consumption on remote islands. The lessons learnt in these locations provide invaluable contributions to understanding mainland scenarios (Barton, 2006).

Market Research The key to introducing widespread use of renewable Biofuel is that it has to create a market for itself. Very few people are aware of the cheap, bio-friendly fuel that can power their homes, vehicles and offices. Solarization has made a mark and products that use solar energy have penetrated the Australian markets. For a long time, the renewable energy sources and especially Biofuel, has been the concern of environmentalists, economists and futuristic thinkers. Now, the time has come to bring it into the main stream and introduce Biofuel as the main source of energy, especially for transport.

So, the vital question is – how to penetrate a market that is the strong hold of diesel and other petroleum products? How to convince the users about the advantages of using Biofuel, especially in making the world a safer place for the next generation?

Read More