Global Gas and Steam Turbine Markets Conventional Thermal Power Expansion Driven by Emerging Markets and Rising Natural Gas Availability

Transcription

1 Global Gas and Steam Turbine Markets Conventional Thermal Power Expansion Driven by Emerging Markets and Rising Natural Gas Availability June 2014

2 Executive Summary Return to contents 4

3 Key Findings Global gas turbine market revenue is expected to increase from $18.00 billion in 2013 to reach $26.07 billion by 2020, corresponding to a compound annual growth rate (CAGR) of 5.4% over this period. The market is driven by the replacement of aging coal plants with modern gasfired power stations, the growing availability and usage of natural gas in power generation, strong expansion of the global oil and gas industry, and the rising need for more flexible generating assets linked to the growth of intermittent power generation based on renewable energy sources. Strong growth is anticipated for the years beyond 2016, as the prospects for new gas plants start to improve in the weak European region and growth accelerates in China and India. Total global orders for gas turbines are forecast to rise from 58,364 megawatts (MW) in 2013 to 81,530 MW in The market will expand significantly, with order levels rising in excess of 5% annually from 2015 onwards, before growth trails off towards the end of the forecast period as emerging markets become more mature and renewable energy becomes a more attractive proposition for large-scale generation. A total of 556 gigawatts (GW) of gas turbines are forecast to be ordered over the 2013 to 2020 period. Image Source: Frost & Sullivan Image Resource Bank. Source: Frost & Sullivan 5

4 Key Findings (continued) The small- and medium-sized gas turbine output ranges are expected to grow faster than larger units. This is largely driven by on-going market uncertainty in the utilities sector, mainly across developed markets, over the future of carbon markets and the development of renewable energy, affecting the outlook for conventional generation. Smaller ranges will benefit from the greater need for flexible generating units and the growth of the oil and gas industry. Power utilities and independent power producers (IPPs) represent the bulk of gas turbine orders in the market, accounting for over two-thirds of orders in the market. Going forward, both the mechanical drive and industrial segments will expand more rapidly than the utility/ipp segment. Gas turbine prices have fallen from their peak by approximately 20% as a result of reduced demand in power generation equipment in the aftermath of the economic crisis but have remained relatively stable since Frost & Sullivan expects global prices to start picking up from 2014 as demand for gas turbines rises and manufacturers spare production capacities are reduced with significant regional variations. The latest generation of gas turbines were initially conceived with greater efficiency as the key goal, but greater operating flexibility has emerged as the key battleground between original equipment manufacturers (OEMs). Image Source: Frost & Sullivan Image Resource Bank. Source: Frost & Sullivan 6

5 Key Findings (continued) China is expected to become the leading gas turbine region as the position of the Middle East, hitherto the undisputed leader, declines gradually. China is aggressively promoting gas turbine plants in a bid to reduce dependence on coal plants and promote fuel diversification. The global steam turbine market is expected to increase from $14.51 billion in 2013 to reach $17.42 billion by 2020, corresponding to a CAGR of 2.6% over this period. The market is driven by large coal-fired capacity additions in emerging markets such as China and India, growth in combined-cycle gas turbines (CCGT) plants requiring steam turbines, the expansion of nuclear power, and the trend towards upgrading outdated coal plants with supercritical and ultra-supercritical technology. Global orders for steam turbines will remain broadly stable over the forecast period, rising marginally, from 100,143 MW in 2013 to 102,340 MW in Recovering order levels in some developed regions will be offset by weakening order levels in the world s largest steam turbine market, China. Small- and medium-sized steam turbine output ranges are forecast to rise somewhat faster compared to the average growth as a result of better financing prospects for smaller plants as well as industrial applications, including those in the expanding oil and gas industry. Image Source: Frost & Sullivan Image Resource Bank. Source: Frost & Sullivan 7

6 Key Findings (continued) Unlike gas turbines, steam turbines are highly customised so prices vary substantially depending on the specific location, application, technology (subcritical versus supercritical or ultra-supercritical), and the customer s buying power. Frost & Sullivan expects steam turbine prices to remain fairly stable over the next few years, reflecting the highly competitive nature of the market and Chinese OEMs increasingly making inroads into other markets. Ultra-supercritical (USC) steam turbines can achieve efficiencies of up to 47%, compared with an average of 39% for sub-critical units. USC units have started to replace older plants at an accelerating pace, as China has increasingly installed USC machines. Major OEMs and institutions in Europe, the United States, Japan, China, and India are working on breaking through the 50% efficiency barrier, focusing on raising the temperature and pressure of steam turbine operating conditions. While China s share of the steam turbine market is forecast to decline over time albeit remaining in a dominant position India s share will expand upon resolving its coal shortage issues. Southeast Asia will also grow strongly as it looks to coal to reduce gas dependence. The European market will remain weak amid uncertainty over future power demand growth and financially troubled utilities. Image Source: Frost & Sullivan Image Resource Bank. Source: Frost & Sullivan 8

7 Gas Turbine Market Engineering Measurements Market Overview Gas Turbine Market: Market Engineering Measurements, Global, 2013 Market Stage Market Size in Revenue Market Size in Market Revenue at End of Forecast Period Orders at End of Forecast Period (MW) Growth $18.00 B 58,364 MW $26.07 B 81,530 MW (2020) (2020) Base Year Market Revenue Growth Rate Compound Annual Revenue Base Year Market Compound Annual 3.3% 5.4% 2.9% 4.9% (CAGR, ) (CAGR, ) Decreasing Stable Increasing For a tabular version, click here. Note: All figures are rounded. The base year is Source: Frost & Sullivan 9

8 Gas Turbine Market Engineering Measurements (continued) Market Overview Competitor Overview Degree of Technical Change Customer Price Sensitivity Replacement Rate Market Concentration Competitors Years 78.8% (scale:1 [low] to 10 [high]) (scale:1 [low] to 10 [high]) (average period of unit replacement) (% of market share held by top 3 companies) (active market competitors in base year) Competitor Overview Industry Advancement Companies that Entered* Companies that Exited* Average Plant Set up time Marketing Spend as a % of Market Revenue Years 5% Decreasing Stable Increasing *Note: Companies with revenue of more than $50 M Note: All figures are rounded. The base year is Source: Frost & Sullivan 10

9 Steam Turbine Market Engineering Measurements Market Overview Market Stage Steam Turbine Market: Market Engineering Measurements, Global, 2013 Market Size in Revenue Market Size in Market Revenue at End of Forecast Period Orders at End of Forecast Period (MW) Mature $14.51 B 100,143 MW $17.42 B 102,340 MW (2020) (2020) Base Year Market Revenue Growth Rate Compound Annual Revenues Base Year Market Compound Annual 1.0% 2.6% 4.2% 0.3% (CAGR, ) (CAGR, ) Decreasing Stable Increasing For a tabular version, click here. Note: All figures are rounded. The base year is Source: Frost & Sullivan 11

10 Steam Turbine Market Engineering Measurements (continued) Market Overview Competitor Overview Degree of Technical Change Customer Price Sensitivity Replacement Rate Market Concentration Competitors Years 46.5% (scale:1 [low] to 10 [high]) (scale:1 [low] to 10 [high]) (average period of unit replacement) (% of market share held by top 3 companies) (active market competitors in base year) Competitor Overview Industry Advancement Companies that Entered* Companies that Exited* Average Plant Set up time Marketing Spend as a % of Market Revenue Years 5% Decreasing Stable Increasing *Note: Companies with revenue of more than $50 M Note: All figures are rounded. The base year is Source: Frost & Sullivan 12

11 CEO s Perspective 1 2 Gas turbine market growth will outpace that of steam turbines as natural gas availability rises globally. There is a trend towards smaller plants that are faster to build and easier to finance. 3 Oil and gas industry growth will boost both gas and steam turbine orders. 4 5 Brand, price, technical performance, and local servicing capabilities are key competitive factors. Chinese steam turbine OEMs are growing outside China on the back of expanding EPC track records. Key: EPC = Engineering, Procurement, and Construction Source: Frost & Sullivan 13