BSI Shares Market Outlook for Solar PV

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Boston Strategies International’s President Mr. David Jacoby Shared BSI’s Analysis of the Solar PV Market at the SNEC Conference in Shanghai, China on April 17-21, 2017.

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The SNEC Scientific Conference provided an excellent platform for the world’s PV experts and scientists to showcase and share the latest developments in solar energy technologies.

The conference programme encompassed a wide scope of PV technologies, ranging from silicon feedstock, PV materials, cells, modules, systems and quality assurance to smart grid technologies. The world’s top PV scientists along with CTOs from leading PV companies have been invited to join the International Scientific Committee as well as presenting on the cutting-edge technologies of solar energy at the conference.

Boston Strategies International’s President Mr. David Jacoby’s presentation on “Market Outlook for Solar PV” provided detailed insights about the long-term demand growth outlook for Solar PV and the world’s solar markets.

In his presentation Mr. Jacoby emphasized that cumulative global market for solar PV expected to triple by 2020 to almost 700 gigawatts, with annual demand eclipsing 100 gigawatts in 2019. According to the analysis, the bulk of the growth will occur in a small number of markets. While 8 countries might each add over 10 GW, 4 markets – China, US, Indian and Japan – are supposed to add over 20 GW, and China could exceed the 100 GW level in the High Scenario.

global market for solar PV

David at SNEC ShanghaiDavid also emphasised that Solar power as the lowest-cost renewable energy can provide enough clean power generation in time to meet the ambitious Paris Climate Summit targets. Utility-scale systems and rooftop systems will each have roughly half of the global market.

Rooftop systems are currently more expensive but the value of electricity delivered on consumption sites or nearby is greater.

However, as PV expansion is driven more and more by self consumption – the use of PV electricity directly at the same site where it is generated – grids may carry smaller amounts of traded electricity, raising concerns over how to recover the fixed costs of grids.

 

solar pv europe

SNEC solar PV conference

Mr. Jacoby explained how the global market for solar PV will no longer be Europe-centric and large solar markets in Asia are booming. China and Japan are leading the growth curve for the solar PV market and energy storage solutions will unleash latent growth in Latin America, Middle East and India.

He also discussed about the increasing rates of penetration for rooftop solar. According to BSI’s research, since the demand growth is coming mainly from emerging markets where utility-scale PV is currently the preferred application, this solar segment will continue its lead over the next 5 years.

He summed up by forecasting that energy storage solutions and emerging market potential promise long-term profitability for the industry.

To access David’s full SNEC 2017 presentation “Market Outlook for Solar PV” with detailed charts and analysis kindly buy it using this link.

 

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Global Consequences of Brexit for Generations to Come

Decisiveness is usually a good thing in matters of economic policy. Markets depend on stability, and growth depends on markets, ergo growth depends on stability. Central bankers send signals long in advance of changes in interest rates to give markets and businesses time to prepare and adjust. In some countries businesses practically come to a standstill before important elections, rather than risk making suboptimal decisions. The worst thing is mixed signals.

However, some waffling may be excused, and even encouraged, when an irreversibly wrong decision is about to be made. The consequences of Brexit will be felt for generations to come, both inside and outside the U.K.

As Britain begins its exit negotiations from the EU, many tactical decisions will need to be made, such as slow versus fast, soft versus hard, and consultative versus imperial (executive-led).

EU countries, spurned by Britain, would prefer a quick, decisive exit, whether inclusive or not. “Let’s end this nightmare and move on.”

However, British citizens should take every opportunity to review, reconsider, and even recant their decision to the extent that is politically possible. In the case of a Big Wrong Decision, a slow, soft, and consultative approach can minimize the damage and leave some room for potential reconciliation.

Important negotiating points should be voted on, and as the negotiated cost and benefits become clear, the actual costs and benefits should be compared to the assumed costs and benefits that were the basis of the vote to exit the Union. If there is a significant difference between the reality and the picture they had in their minds at that time, procedural mechanisms should be manipulated to minimize losses and possibly even to squirm out of the Brexit cage entirely.

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Trump Administration – What is the Current US Trade Policy?

The Trump administration’s trade policy is anything but Republican. From a conventional economic perspective it would seem isolationist and protectionist. Its coherence could lie in its support of superordinate political goals, such taming or reversing immigration from Mexico, engaging China against North Korea, and bolstering Saudi Arabia’s hegemony in the Middle East.

trump tradeWhat is the current US trade policy? For decades, even centuries, the US has had a trade doctrine. While the doctrine changed from time to time, the policy was predicated on economic principles and it was usually designed with engagement, multilateralism, global economic strength, and free markets in mind.

Perhaps the Trump administration has yet to reveal the intellectual blueprint underlying its diverse and varied trade stances. Maybe, the intent is to start from scratch in a new and better way. For analogues we could examine the coherence and roll-out approach of this administration’s foreign policy, communications strategy, and technology & innovation roadmap.

Keep an eye out for my upcoming book, which will peer under the covers of Trump’s trade policies, evaluate whether they will be effective or not, and map a trade policy path for today’s flat world.

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Impact of Energy Prices on Global Supply Chain Design

Boston Strategies International’s President, David Jacoby delivered the results of BSI’s recent study “Impact of Energy Prices on Logistics & Global Supply Chains” at the New England Supply Chain Conference and Exhibition (NESCON) in Boston. NESCON is produced by APICS (The Association for Operations Management), the Council of Supply Chain Management Professionals (CSCMP)’s New England Roundtable, and The Northeast Supply Management Group of the Institute for Supply Management. The 2016 conference consisted exclusively of the top-rated All-Star speakers from the conference’s 12-year history.

For global shippers, recent dramatic changes in energy costs necessitate a review and reconfiguration of the number, type and location of distribution centers and fleet assets, since the trade-off between transportation costs and inventory holding costs has changed substantially.

energy price trend graph

BSI’s study evaluated the results of 400 scenarios using a network modeling tool to quantify the impact of recent gasoline, diesel, electricity prices, load factors and network design on total supply chain costs. The study mapped the relative impact of key cost drivers according to their impact on total supply chain cost, scaling the variables from one tenth to 10 times their current value.

network sensitivity graph to energy

While current low fuel prices have dampened the pressure to move towards green energy, progressive carriers like UPS, shippers like AT&T, and OEMs like Mercedes-Benz continue their work on alternative fuel vehicle fleets, mostly based on ethanol blends and Compressed Natural Gas (CNG).

Mr. Jacoby engaged a lively discussion on the impact of disruptive technology such as Uber, Drones, and Connected Vehicles on commercial logistics, and presented a framework for logistics planning.

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To request a complete presentation on “Impact of Energy Prices on Logistics & Global Supply Chains” please contact us or drop us an email .

BSI wins contract with Instituto Nacional de Ecología y Cambio Climático (INECC)

Boston Strategies International (BSI) has been engaged by a branch of the Mexican government – the Instituto Nacional de Ecología y Cambio Climático (National Institute of Ecology and Climate Change) – to study renewable energy costs and value chains. BSI will compare the costs and value added of environmentally sustainable technologies for the power generation sector (large scale solar, wind and geothermal, vs combined cycle natural gas technology) to support decision-making in environmental mitigation. The study will analyze the principal actors, elements and processes, as well as costs, value added, and barriers to entry attributable to each segment of the value chain, as inputs on energy policy formulation.

The Instituto Nacional de Ecología y Cambio Climático (INECC) produces valuable scientific and technical information on environmental issues and the training of human resources, in order to inform society, support decision making, encourage the protection of the environment, promote the sustainable use of natural resources, and support the Mexican Secretary of the Environment and Natural Resources in reading its goals. It aims to be a leader agency in applied environmental research, that develops and promotes scientific cooperation projects that contribute effectively to resolve the major environmental problems of Mexico, and support the conservation and restoration of the environment in the whole country.

Boston Strategies International is a consultancy that reduces cost of gas, oil, and power operations by up to 30% through value chain cost engineering, targeted strategic sourcing, and supply contract negotiation. BSI leverages its proprietary economic models and frameworks to advise Ministries of Finance, Ministries of Economy, Ministries of Industry, and other governmental agencies in the formulation of national and energy tax, subsidy, and investment promotion policies. Our broad experience across all aspects of industrial value chains, combined with our strength in economic analysis, provides clients with robust and trustworthy roadmaps for growth.

Please contact us for more information and services.

Next Generation Supply Chains: Huge Window of Opportunity for O&G Suppliers that Create Disruptive Decreases in Cost

The oil and gas equipment supply industry has been hit hard in recent years. While nominal prices increased by 17% between 2007 and 2015, gross profit margins have fallen by 22%, from +15% in 2007 to -7% this year. Margins grew in 2015 for the first time in six years, but are falling again this year, driven by continued low oil prices. Suppliers are accepting price reductions in order to hold onto contracts and maintain their market share, in hopes of better times ahead.

The next gen of Supply Chain

Source: Boston Strategies International

 

Over the last two years, compressors and instrumentation suppliers have fared the worst, with profits declining 40% on average. Manufacturers of pumps suffered profit declines of 10%. The profitability of manufacturers of specialty forgings and fittings for oil & gas applications has been volatile, with profit margins swinging between -20% and +23%.

 

Suppliers to the oil and gas industry can’t just sit back and think “I’ll lowball my price this year and I’ll take a loss, planning on staying in business, because next year things will get better.” That’s probably not a brilliant strategy, because if things persist to be bad over the next three or four years, you won’t be able to sustain it. BSI’s supply chain forecast shows continued rough weather for equipment suppliers until 2019, and 2022 before strong growth resumes.

 

Today there is a window of opportunity for leading companies – and I don’t mean the big companies – I mean companies that lead, the companies that pro-act, the companies that change the paradigm, that put the energy and the marketing investment in to develop breakthrough technology-service-information solutions and strategic mergers, acquisitions, or partnerships that can dramatically reduce cost. These companies will add more value on among the bid slate, will win and become embedded in the future of the next generation supply chains. And that’s really the big opportunity for everybody today and it’s the way that the whole market will adjust and recalibrate.

 

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The Benefits of European Integration: Don’t Forget What We Learned Between 1957 and 1992

It’s too bad Britain can’t admit that it made a regrettable mistake, ask for forgiveness, and call for a re-vote on Brexit. Now that the country’s leadership has transitioned and the Germany and France are calling for a swift exit, the chances of a “do-over” are remote at best. The country can mitigate the damage by mirroring the EU’s economic and political policies, procedures, and standards as closely as possible.

The referendum was largely driven more by a desire for political independence, especially immigration control.  The economic arguments for leaving (freedom to establish independent trade agreements with developing countries like China, and lower overhead costs) are outweighed by the benefits of being part of a huge and harmonized global trade bloc. Exporters from developing countries like China have enough trouble trying to meet the requirements of one trading bloc; they don’t want more permutations of standards, forms, and tariff and non-tariff barriers to confuse, delay, and impede their ability and economic interest in exporting to the UK.

Yes, Brussels is bureaucratic and compliance with EU regulations comes at a cost. However, the European Economic Community’s elimination of internal customs duties, the harmonization of external trade policies, and the common currency (which Britain never adopted, to be clear) drove stock markets up 20-50% preceding the formation of the single market (European Economic Area) in 1992, the extension of the European Economic Community to the European Union, and the adoption of the Euro as a common currency. To begin dismantling the structures and institutions that were built over so many years since the 1957 Treaty of Rome signals an unfortunate and destructive mid-life crisis. The UK will be economically worse off outside the EU.

europe-brexitIn 1989, I pointed out that Europe’s impending integration (the common currency was adopted in 1992) was analogous to a corporate merger that helped to reduce transactions costs and revitalized Europe’s competitiveness. “Europe stagnated throughout the 1980s and avoided confronting what was described twenty years ago as ‘the global challenge,’” I wrote. “In order to maintain its position as one of the three poles of the world economic power, Europe’s 1992 plan finally puts a deadline on building the economic unity and competitive resilience envisaged in the 1957 Treaty of Rome.” The benefits were clear: Europe was “’selling at a premium’” on the world market. Belgian, French, and Swedish bourses…all registered increases on the order of 50%…and most other European bourses [rose] 20% or more…Europe can make this restructuring successful by reducing transactions costs, increasing synergies, and coping with stakeholder opposition…Those countries not willing to support a market-driven economy will experience strained relationships with other member countries. They may eventually opt out of the EEC, choosing protectionism rather than integration.” My article was called “Facing the Global Challenge,” European Integration and Global Competitiveness. I presented it at the International Management Symposium in St. Gallen, Switzerland in front of European political and business leaders such as Edouard Balladur (Prime Minister of France), Percy Barnevik (CEO and Chairman of Asea Brown Boveri), Allan Bloom (author of “Closing of the American Mind”), Bill Bradley (US Senator and former NBA star), Arthur Dunkel (Director General of GATT), Alfred Herrhausen (Chairman of Deutsche Bank), Romano Prodi (Prime Minister of Italy), and Franz Vranitzky (Chancellor of Austria). The countries that I suspected might opt out of the Union were the less developed ones (e.g., Greece, Spain, and Portugal), whose compliance with the fiscal conditions of membership such as debt levels and foreign currency reserves had the potential to cause hardship.

In the interest of maintaining stability of global trade and minimizing the risk of recession that could accompany further disintegration, at least the founding members and the former EFTA countries should reconfirm their commitment to economic union. 

Download “Facing the Global Challenge,” European Integration and Global Competitiveness.”

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CSSOPE 2016 – “Supply Chain Management in This Oil and Gas Depression”

Boston Strategies International’s President, David Jacoby delivered the opening keynote presentation and conducted a workshop at The 6th Conference and Exhibition – China Sourcing Summit On Petroleum & Chemical Equipment(CSSOPE) 2016, which provided a top-level overview and detailed insight into the world oil and gas market and China’s equipment supply capacity.

CSSOPE 2016 presentation

David Jacoby delivering the opening keynote presentation at CSSOPE 2016 – “Supply Chain Management in This Oil and Gas Depression”.

 In his speech David emphasized that output improvements from unconventional production are now over half of total production in the United States. Fracking and directional drilling have dramatically impacted the amount of oil and gas that can be tapped economically.

Surplus Hydrocarbons graph

These graphs give you a brief pictorial of recent developments.

Most oil & gas production firms have reduced their capital spending for 2015, by 12-33%, which has driven the abrupt decline in Drilling Equipment sales. Global E&P (upstream) spending will drop by 27% in 2016 alone. India, Asia and Australia are expected to cut spending spending by 13.5%, while Europe and Africa are expected to spend 7.2% and 13.5% less, respectively. North American E&Ps are expected to cut into their budgets even further, with a 40% decline in spending on E&P (upstream). This has put both national oil companies and international oil companies into debt.

CSSOPE 2016 Workshop

David Jacoby conducting the workshop at CSSOPE 2016

President David Jacoby in his workshop, explained that there are 3 upcoming periods of significant supply chain impact on all of the capital oil price degradation. The first is about a 3 to 4-year period of resettlement, where mostly industry will have to deal with a depressed supply chain environment, low pricing and a lot of turnover resulting in competitive dynamic restructuring on the part of suppliers.

The period of 2020-2030 looks like it will recover from a supply chain point of view on a fairly steady basis. But, then the 2030-2040 scenario will have a bit of deterioration again because of transition to renewable energies from oil.

3 periods of impact

The 3 upcoming periods of significant supply chain impact on all of the capital oil price degradation.

David concluded by highlighting that there is a window of opportunity for leading companies, the companies that pro-act and change the paradigm will be able to successfully change the perceptions in the industry more rapidly. These companies will add more value on among the bid slate, will win contracts and become embedded in the future of new supply chains.

David Jacoby at CSSOPE 2016

To request a complete report Supply Chain Management in Oil and Gas Depression” please contact us or drop us an email .

 

BSI Offers $2 Billion in Savings to Mexican Energy Projects: President Interviewed by Mexican Business Journals

 

David Jacoby

David Jacoby, President of Boston Strategies International, during his participation in the panel discussion “Hydrocarbons Infrastructure in Mexico” at the 2nd Mexico Gas Summit 2016, in San Antonio, Texas.

 

Monterrey, Mexico (April 22, 2016). – With the aim to help the Mexican government save $2 billion on the gas pipeline projects being tendered, and $8 billion on power plant construction over the next 15 years, the international consulting firm Boston Strategies International (BSI) started operations in Mexico.

“BSI is a consulting firm that compresses the lead-time and reduces the investment in major capital programs for oil, gas and power operators by up to 30% through value chain cost engineering, targeted strategic sourcing, and supply contract negotiation”, said David Jacoby BSI’s President.

The firm has worked with companies such as BP, Chevron, Gazprom, PDVSA, Total and major suppliers in Saudi Arabia and the Middle East. Boston Strategies International has offices in Saudi Arabia, Bahrain, China, Colombia, United States, India, Iraq, Nigeria, Qatar,United Kingdom, and recently in Mexico.

David Jacoby remarked that BSI could help operators, including Pemex and CFE, to increase their return on investments by 10% based on lower capital cost than competitors. “We could reduce between 13% and 30% of the investment portfolios across the range of energy projects, as we have done with other companies around the world”, he said.

The President highlighted that the firm could have advised the bidders participating in Round 1, on their bidding strategy and costs to ensure profitability and sustainable returns.

“We publish thought leadership, benchmarks, and methodologies to help these companies make good tenders and bids. But in some cases, if the oil price is too low, the deal just shouldn’t be done.”, Jacoby said.

“We focus on value chains through 14 different ways to cope with the extra capital costs, economies of scale, among other methods we have developed to over the years to reach win-win situations.”

For more information, please visit these articles in Negocios, El Norte, and Empresas Article (Mexican business journals).

Ofrecen ahorros en proyectos energéticos_Periódico Reforma, México (1)

Ofrecen ahorros en proyectos energéticos-Periódico Reforma, México by Luis Valle

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2nd Mexico Gas Summit – Expanding the distribution network

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People (right to left): Clay Bretches (President & CEO of Sendero Midstream), Eduardo Nieves (head of the Technical System Operations and Planning Office at the Natural Gas National Control Center at CENAGAS), Dora Mancera (organizer of the event from Industry Exchange LLC), David Jacoby (President of Boston Strategies International), Brandon Seale (President of Howard Energy México), Jimmy Delano (Vice President and General Manager of ATCO Mexico), Jay Applewhite and Raul Ferro (masters of ceremony from Industry Exchange LLC)

BSI’s President, David Jacoby moderated the “Hydrocarbons Infrastructure” panel discussion at the 2nd Mexico Gas Summit – The leading natural gas event for Mexico’s onshore E&P, midstream infrastructure, transportation and storage industries on April 13-14, 2016. The main opening points were that Mexico’s midstream segment has undergone significant expansion to meet natural gas needs of the nation’s growing economy.

Expanding the distribution network through ongoing projects like the Los Ramones development among others will now enable industrial hubs to flourish and local economies to grow. Further accelerating demand for natural gas is Mexico’s plan to reduce the use of fuel oil for power generation to only 10% of 2012 levels by 2017, mostly in favour of natural gas. Pipeline capacity into Mexico continues to expand. Capacity will rise in the coming years, as several companies are already making investments to advance pipeline expansions into Mexico, including Energy Transfer Partners, Sempra Energy, Kinder Morgan and Pemex.

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Power generation through these infrastructure projects will fundamentally increase gas demand in Mexico, and since it will take several years for the Reforms to boost Mexico’s own domestic production of oil and gas, over the coming years the nation will import natural gas from the United States.

Click on the Contact Us button below to learn more about BSI’s services in the area of midstream development and North American natural gas supply.

For more information about the event please see visit the link 2nd Mexico Gas Summit 2016.

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