LONDON: The LED lighting industry is set to dominate the global market more than a century after its discovery, benefitting from a widespread ban of conventional incandescent bulbs and as the market share of competing green replacements fade.
Light emitting diodes (LEDs) have a vital edge in that they have superior energy efficiency and longer lifespans compared with rivals, while a global glut in LED chips means they are becoming more competitive.
A forecast explosion in LED sales by more than 40 percent annually will see the technology eclipse high-efficiency rivals such as compact fluorescent lamps (CFLs).
Meanwhile, the main LED market challenge of high upfront costs is eroding.
And, while concerns remain of a potential manufacturing bubble stemming from a boom-bust cycle of over-capacity — which has been seen in other clean energy technologies sectors such as wind and solar — freedom from subsidy programs may see demand rise more smoothly than with fickle government support.
LEDs will surge in the US lighting market, to a 36 percent share in 2020 and 74 percent in 2030, a US Department of Energy report forecast last year, implying $30 billion in annual energy savings by 2030.
The study, “Energy Savings Potential of Solid-State Lighting in General Illumination Applications,” forecast rapid gains after 2014 as prices continue to fall.
McKinsey is even more aggressive for the global 55 billion euro ($ 71.86 billion) general lighting market (which excludes automotive and specialist backlighting), forecasting a 45 percent LED market share in 2016 from 9 percent in 2011.
LEDs would usurp traditional efficient light bulbs such as CFLs, the consultants said in their “Perspectives on the global lighting market” study in August.
Developed countries are banning incandescent light bulbs on the basis that they are inefficient and contribute to global warming and energy insecurity, while governments chase building efficiency programs.
The International Energy Agency reported that 26 of its 28 member countries had policies in place to phase out incandescent bulbs as of 2011, except in New Zealand and Turkey. The European Union (19 EU countries are IEA members) last year phased out all non-directional, clear incandescent light bulbs usually used in household illumination.
The US banned 100-watt incandescent light bulbs from October last year, followed by 75-watt bulbs this month and with 60-watt bulbs to follow.
Among emerging economies, China said it would ban 100-watt incandescents from October last year, with other varieties following through 2016.
Incandescent light bulbs produce light when an electric current runs through a wire inside the bulb’s glass globe, causing the wire to heat up and glow. Halogen lamps are similar but add a gas which extends the product lifespan and allows them to operate at higher temperatures.
LEDs generate light when electricity flows through an electronic component called a diode.
CFLs and fluorescent tubes emit light when electricity excites a mix of gases inside the bulb, creating invisible ultraviolet light that is absorbed by the bulb’s fluorescent coating and transformed into visible light.
LEDs are an old technology but will now become the dominant technology in the wake of the incandescent ban.
Britain’s H. J. Round is credited with being the first person to publish the light emitting diode effect, in 1907.
Modern LEDs are superior to CFLs in terms of total environmental impact including the energy and natural resources needed to manufacture, transport, operate and dispose of light bulbs, concluded a report published in September by the US Department of Energy’s Pacific Northwest National Laboratory (PNNL) and UK-based N14 Energy Limited.
It compared the most typical and widely available light bulb in each technology class: LEDs, CFLs and incandescents.
With regards to operating efficiency, LEDs and CFLs were neck and neck: the bulbs each created about the same amount of light (800-900 lumens) but the incandescent bulb consumed 60 watts of electricity, followed by the CFL’s 15 watts and LED’s 12.5 watts.
But LEDs beat CFLs on overall environmental performance, including the energy and resources needed to make them.
LEDs cost more but have a longer life span: the PNNL report assumed its standard LED bulbs to last 25,000 hours for 2012 models, compared with 8,500 for CFLs and 1,000 for incandescents.
McKinsey forecasts a less than two-year payback by 2016 in the residential market and around three years in offices, from around 10 years now.
Environmental buyers are already converted, such as investors Climate Change Capital whose Tim Mockett reported on Wednesday a rapid 18-24-month payback on a recent LED lighting retrofit, replacing conventional fluorescent strip lighting.
A bigger test of demand will be adoption in large-scale public procurement programs including street lighting projects which are gathering steam.
— The author is a Reuters market analyst. The views expressed are his own.
LEDs set to dominate lighting technology
LEDs set to dominate lighting technology
Six vital sectors drawing US investors to Saudi Arabia
RIYADH: Six vital sectors are drawing US investors, including entrepreneurs and small businesses, to Saudi markets as the Kingdom continues to develop its regulatory framework and foster innovation, Deborah Lehr, interim CEO of the Meridian International Center, said in an interview with Al-Eqtisadiah.
Lehr, who is heading a trade and investment delegation to Saudi Arabia in her capacity as an economic advisor affiliated with the White House, stated that the six sectors include hospitality, luxury goods, and tourism, as well as culture, technology, and others.
She noted that Saudi Arabia has significantly eased the process for foreign companies to establish a presence, a critical factor for small and medium-sized enterprises that may not yet have the scale to expand, making the Kingdom an attractive market for both large and innovative small companies.
Following the success of the Saudi Crown Prince’s recent visit to Washington, she said, Meridian organized a US trade delegation to explore tangible and growing opportunities for US businesses in Saudi Arabia.
Translating Vision 2030 priorities into real partnerships
The delegation, which included representatives from Delta, Intel, Pernod Ricard, and Basilinna, among others, met a wide range of government officials, private-sector leaders, and entrepreneurs to explore how US companies can participate in Saudi market growth.
According to Lehr, discussions were practical and forward-looking, focusing on translating Vision 2030 priorities into real business partnerships.
She highlighted that most of the companies in the delegation were large enterprises operating across various sectors, underscoring the diversity of businesses active in Saudi Arabia.
She pointed out that these companies joined the mission because they see the potential to scale their operations in Saudi Arabia — whether by increasing flight routes, enhancing airport security, offering advisory services to firms entering the Saudi or US markets, or exploring opportunities in the beverage sector.
Relationship increasingly taking economic dimension
Lehr hinted to the Saudi minister of investment that the US-Saudi relationship is also increasingly taking on an economic dimension.
She noted that bilateral trade stands at around $40 billion, compared with Saudi-China trade of approximately $110 billion, highlighting untapped growth potential between the two countries, especially as diplomatic and political ties continue to strengthen.
She said the reforms present valuable opportunities for US companies across multiple sectors, including advanced manufacturing, technology and logistics, as well as aviation, tourism and culture, alongside a wide range of services.
With the regulatory environment being modernized and business stability increasing, the scope of US investment is set to expand further. More importantly, she added, the greater the engagement of companies, the stronger and more resilient the bilateral relationship will become in the years ahead.
She emphasized that Saudi Arabia has undergone deep social and economic transformations, including increased female participation in the workforce and entrepreneurship, while emerging as a cultural hub with a thriving arts scene and new platforms for creative expression.
Lehr further said that the world will witness growing global interest from companies and institutions eager to be part of Saudi Arabia’s remarkable transformation, amid increasing openness and a willingness to share its history, culture, and ambitions with the world.
Saudi agenda offers tangible opportunities
Lehr highlighted that during her visit, she focused on three key economic priorities. The first is Saudi Arabia’s strategic shift of capital from the oil and gas sector toward technology and innovation, a move that signifies not only economic diversification but also the Kingdom’s emergence as a globally competitive player.
Second, the Kingdom’s reform agenda has provided tangible opportunities for foreign companies, reflecting real changes that facilitate international participation in Saudi growth.
The third point she focused on was that the strong geopolitical and economic ties between the US and Saudi Arabia have bolstered investor confidence. As the Kingdom strengthens its global role and deepens relationships with partners such as the US, its attractiveness for long-term foreign direct investment continues to grow.
She noted that sectors such as artificial intelligence, gaming and entertainment, advanced manufacturing, and the technology ecosystem are areas in which the US has strong competitive advantages, at a time when US firms are seeking new markets that offer stability and long-term potential.
Giga-projects in Saudi Arabia, including AlUla and NEOM, have attracted global attention and highlighted emerging opportunities across the country.
These projects demonstrate the Kingdom’s ambitious vision and its creation of entirely new sectors rather than merely expanding existing ones.
