The gas turbine in thermal power market is expected to grow at a CAGR of more than 3% during the forecast period. The global electricity demand has been increasing, doubling itself within the last two decades and is expected to grow at twice the pace of energy demand as a whole, in the next 25 years. Moreover, the advancement in technology leading to the increase in shale gas production clubbed with the plans of various countries to phase out coal-based power generation and replace them with the gas-fired power plant is likely to act as a driver for the market. However, the increase in renewable energy deployment due to the enhanced efficiency of renewable-based power generation coupled with supportive government policies and initiatives is expected to restrain the growth of the market.
- Generally, the turbine with a capacity above 120 MW is used for power generation. And with the demand for electricity expected to increase further, the turbines with a capacity of more than 120 MW is likely to dominate the market during the forecast period.
- Moreover, the threat associated with the nuclear power plant is likely to promulgate the government's decision to prefer gas-based power generation over the nuclear power plant, which, in turn, is expected provide an opportunity for the market growth in the coming years.
- Asia-Pacific was the dominant region for the market in 2018, owing to the increasing reliance on gas-based power generation and an increase in oil & gas activities.
Key Market Trends
Increasing Demand for Turbine with Capacity Above 120 MW for Power Generation.
- The 250-500 MW class is the backbone of the power generation industry and is likely to dominate the market for at least the next decade.
- After a few years of constant carbon emissions, the emission rose again in 2018, raising concern about the use of coal-based power plants across the globe. Various governments across the globe have now started to put in efforts to reduce the share of coal-based power plants, which has a potential to render opportunity for the increase in demand of gas turbine with a capacity of more than 120 MW for power generation over the forecast period.
- In 2018, Final Investment Decisions (FDIs) for the gas-based power generation in China grew by 70%, and for the first time, more gas-fired power capacity was sanctioned than that of coal. This is likely to provide a impetus to the growth of large capacity turbine segment over the forecast period.
- Moreover, the gas-based power generation is cheaper to install than the nuclear power plant; on the other hand, the gas-based power generation is a more reliable source as compared to renewables. These benefits clubbed with the urgency to reduce the carbon emission have fostered the increase in demand for high capacity gas turbines across the globe.
- The EU policymakers consider gas turbines as little more than a bridging technology to achieve the 2030 targets until other technologies mature. This is likely to drive the demand for gas turbines during the forecast period.
Asia-Pacific Region Dominated the Market
- Asia-Pacific region dominated the gas turbine market with gas-based power generation increasing by 3.04% in 2018 as compared to that in 2017, and gas consumption over the same period increased by 7.41% in Asia-Pacific. The Asia-Pacific market is driven by several factors, such as the rising demand for energy, low environmental impact, and increasing flexibility and efficiency.
- Due to technological advancement and the decreasing cost of shale gas production, natural gas production globally increased by 18.75% during 2011-2018. Rapid industrialization and urbanization are driving a huge and ever-growing power demand in this region, which necessitates the development of numerous power generation projects. This, in turn, is driving the demand for gas turbines in China.
- India's power sector is dominated by coal-based generation, accounting for 54.7% of the total installed capacity in December 2018. The country has identified the potential of renewable energy and gas-based generation for decarbonizing the economy and meeting the targets as per the Paris Agreement. With the increasing share of gas-based generation, demand for gas turbines is expected to increase.
- Countries like Japan, with a growing social consensus against nuclear power, are considered as prospective markets in this regard, especially as the country is also one of the world's largest power consumers.
The global gas turbine in thermal power market is moderately fragmented. Some of the key companies in market under consideration are General Electric Company, Siemens AG, Mitsubishi Heavy Industries Ltd, Kawasaki Heavy Industries Ltd., and Bharat Heavy Electricals Limited
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