Europe's market for generation and distribution of all forms of energy is being liberalized, presenting significant opportunities for U.S. providers of technology, equipment, and other inputs.
Across Western, Central and Eastern Europe, as well as in Eurasia, export and investment opportunities abound for U.S. firms, both large and small. These "best prospects" exist in a plethora of sub-sectors, ranging from renewable energy, information technology and energy trading in the European Union, to the liberalization/privatization of existing power generation and transmission facilities, new generation facilities and transmission and distribution projects in Central and Eastern Europe, to oil and gas exploration, production and transportation in Eurasia. Of course, there is some overlap among regions, but to a large extent, these regional markets within Europe present markedly different opportunities for U.S. firms.
In the past, most governments, to varying degrees, have heavily regulated the energy sector; often inhibiting the sector's development and operation. However, as governments in the region seek to attract greater foreign investment, many are opening their markets through privatization and liberalization. The EU’s energy sector is far more developed and liberalized than the other regions within greater Europe. At the same time, the EU is increasingly enacting pro-renewable energy legislation designed to increase its own share of overall energy consumption within its borders; presenting excellent opportunities for American firms.
In Central and Eastern Europe, many power-generation, transmission and distribution assets are in direct need of upgrading to meet safety and environmental standards. Additionally, these countries, who have traditionally relied on a single source of fuel for their power generation needs, are now trying to diversify their supply in order to guarantee energy security. As many of these countries wish to accede to the EU, in order to comply with EU standards, they will need to: increase the use of renewable energy sources; upgrade existing facilities; and be prepared for privatization and liberalization. This will entail the investment of billions of dollars in the energy sector over the coming years. Since many of these countries lack local funding sources, most will require significant amounts of foreign financing and foreign direct investment to achieve these objectives.
In the Eurasian countries, billions of dollars of procurements in oil and gas exploration, production, refining and transportation, backed by blue-chip international oil consortia, are expected to create major opportunities between the years 2006-2010. In turn, this presents major export opportunities for U.S. firms – whether small, medium or large. U.S. firms should also monitor the wider opportunities in Russia, Kazakhstan, Azerbaijan and the Caspian Sea region. In directly related sub-sectors such as oil and gas field service equipment, offshore and onshore pipelines, refineries, natural gas storage, LNG & CNG facilities, biodiesel, biogas, and SCADA systems, as well as indirectly related sectors such as compressors, road construction, heavy earth moving equipment, health, safety and environment, telecommunications, and information technologies, U.S. firms and their highly sought after products and services will find themselves to be very competitive.
