Trends & Challenges

Energy demand comes in two categories. One is in oil and gas, which is driven both by the oil and gas price and by the difficulty of finding new reserves. We are driven by existing oil running out and new oil being found in more difficult places, which require greater degrees of technology, this is what Rolls-Royce Energy provides its customers with.

The power generation market is driven by GDP growth over the long term. We expect that to be about 3 per cent per annum. It will be faster in developing countries, like China, and slower in the West, in the United States, for instance. The power generation market overall is a fundamental underlying market, which we intend to continue to participate in.

Our reciprocating engine - the Bergen B and the industrial Trent are both considered best in class, are our offerings in the energy market and power generation market.

Fuel cells and tidal power are both developmental projects, and in both of them we need to prove the technology and there needs to be a market opportunity.

Our fuel cells are highly efficient units which will be standalone baseload power. It will operate at 70 per cent efficiency, which is almost twice as efficient as the mainstream power generation, and would allow utilities, particularly in the United States, to position it in cities and urban areas where they can’t currently build new power.

Tidal power has a more limited opportunity. Its obviously restricted to areas with strong tides. The UK is very well-placed due to the strong tides on the coasts. That’s also true of northern France and Canada, and some river systems. But again, the technology nees to be proved and there needs to be a market opportunity.

If you think about our history, we take existing capability, we take an understanding of our customers and we make sure we have technology which is better than anyone else’s. We also invest in the long term, and we invest in the long term both organically and through acquisitions and through partnerships.