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The global heat recovery steam generator market size was at USD 0.88 billion in 2018 and is projected to reach USD 1.22 billion by 2026, exhibiting a CAGR of 4.2% during the forecast period.
A heat recovery steam generator (HRSG) recovers the waste heat from exhaust of gas turbines in the form of steam and uses it as the power source for another power-generating steam turbine. It is placed between a gas turbine and a steam turbine, boasting high thermal efficiency with minimal CO2 emissions. It is used in a combined cycle power plant where the efficiency reaches from 60% to 64% and in cogeneration plants where it helps to improve efficiency by up to 85% to 90%. Growing demand and significant investments for clean sources of energy will drive the HRSG demand. Additionally, increasing awareness and stringent regulation for greenhouse gas emissions and increasing adoption of combined cycle power plants (CCPP) will also fuel the demand in power plants during the projected period.
Continuous Efforts To Reduce Greenhouse Gas Emissions Will Lead To The Industry Growth
There is significant growth in demand for electricity, which has increased power production, leading to an increase in greenhouse emissions and global warming. Hence, stringent regulations, government initiatives, and huge investments have been taken to reduce emissions in the global scenario. Combined cycle power plants and cogeneration are the most efficient and reliable source of power to eradicate the greenhouse gas emissions. Heat recovery steam generator is an integral part of a combined cycle power plant that is used to recover heat from a hot gas stream. Hence, the application of a combined cycle power plant in reducing greenhouse gas emission is trending the demand at a greater pace.
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Growing Demand And Significant Investments For Clean Source Of Energy Will Boost The Market Demand
Clean sources of energy are gaining high momentum in the power industry. A clean energy source is highly efficient, reliable, and technologically advanced, having more flexibility in the power system. Power generation from a thermal plant has led to increased carbon emission levels and global warming, which drastically harms the environment. Hence, there has been significant growth in clean sources of energy, which enabled the adoption of combined cycle power plants and cogeneration for generating power. For instance, in January 2018, a greenfield project worth USD 530.66 million, consisting of a combined cycle gas power plant with a rated capacity of up to 240 MW in Croatia, Europe, had been initiated.
Rising investment in clean energy sources such as CCPP and cogeneration is attracting massive investments across the globe. For instance, in January 2020, Israel Electric Corporation (IEC) had given a contract to GE to provide gas turbines for the Orot Rabin modernization project with the aim to convert 2.59 GW coal-fired power stations into combined-cycle gas turbine plants, to deliver up to 1,260 MW power. Hence, increasing investments for a clean source of energy drives the demand in the global market.
Growing Adoption Of Combined Cycle Power Plants Will Augur The Market
The combined cycle power plant produces 50 percent more electricity, and the waste heat generated from the gas turbine is directed to the steam turbine, which generates extra power. In the process, the major component of extracting heat from the exhaust gases of a gas turbine is done by a heat recovery steam generator. Hence, the adoption of a combined cycle power plant becomes more efficient than a simple-cycle plant. For instance, in January 2016, Shandong Electric Power Construction Corporation III received an engineering, procurement, and construction contract (EPC) worth USD 490 million for a combined-cycle power plant, replacing the Hussein Thermal Power Station. Hence, increasing the adoption of a combined cycle power plant accelerates the demand and is expanding the heat recovery steam generator (HRSG) market size.
High Initial Investment and Maintenance Cost Is Likely To Restrict The Market Growth
A heat recovery steam generator comprises a series of heat exchangers, including economizers to heat water close up to saturation, superheaters to produce superheated steam, and evaporators to produce saturated steam. To extract maximum amount of energy from the gas turbine exhaust gas, there are one or two higher pressure circuits added to the system, which increases the extraction level. Each added pressure level increases power output from the steam turbine, which in turn increases the maintenance cost of the HRSG system. Hence, higher maintenance costs may hamper market growth during the projected period.
Horizontal Drum Segment to Gain Momentum during the Forecast Period
Based on the design, the market is segmented into the horizontal drum and vertical drum. The horizontal drum segment accounts for the maximum share in this market. The horizontal drum is generally made of carbon steel, clad steel, Cu-alloy, and titanium, which provides higher tensile strength. The flow of gas is horizontal, whereas the water is heated in vertically-arranged evaporator tubes, which produces a natural and cost-effective circulation effect. It provides higher efficiency and a zero-defect rate, which makes it more favorable for power generation, oil & gas, and refinery industries. Vertical drum HRSG is flexible in location, requiring less space. Hence, it is primarily deployed on sites where space is a primary concern. Therefore, the horizontal drum segment is gaining momentum during the forecast period.
Combined Cycle Application to Account for Maximum Share
By application, the market segments include cogeneration and combined cycle. The combined cycle segment is holding the largest market share in the market, owing to less capital investment compared to cogeneration. However, the cogeneration segment is also propelling the demand owing to higher efficiency and lower emissions in the environment. Hence, the broad deployment of a heat recovery steam generator in the combined cycle power plant as well as in the cogeneration plant drives the demand during the forecasted period.
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Above 100 MW Segment to Dominate the Market
By power rating, the market segments include up to 30 MW, 31 MW - 100 MW, and above 100 MW. The above 100 MW segment is holding the largest market share in the global market owing to the wide deployment in power plants and industrial applications having plant capacity above 100 MW. As per the Energy Information Administration (EIA) report, in February 2019, the installation of combined cycle units has reached more than 20,000 units in the U.S. 31 MW – 100 MW segment is also increasing in terms of share owing to the wide deployment of HRSGs by cogeneration plant capacity. Small power generation applications such as commercials and industries are deploying the HRSG up to 30 MW on a large scale. Hence, a broad scope across various plant capacities is driving heat recovery steam generator market trends during the projected period.
Deployment in the Utility Segment to Hold the Largest Market Share
By end-user, the market segments include utility, chemicals, refineries, pulp & paper, and others. The utility segment is holding the largest market share owing to the wide deployment of combined cycle plants by the utility sector. Chemical and refineries industries use HRSGs for capturing heat from the existing industrial processes such as petroleum refining for other heating applications. Paper and pulp industries also use HRSGs for industrial applications to extract heat. Hence, the broad usage of HRSG drives the demand during the projected period.
North America Heat Recovery Steam Generator Market Size, 2018 (USD Billion)
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The findings based on our research study indicate North America is expected to hold the largest HRSG market share during the forecast period. In North America, utilities in the U.S. are deploying a large number of HRSGs in the combined cycle plants and cogeneration plants. For instance, according to the U.S. Energy Information Administration’s new report, in 2018, the production from natural gas-fired combined-cycle plants surpassed the coal-fired plants by 21 GW in capacity.
Europe is expected to hold the second-largest position in the market during the forecast period. The region is expected to witness healthy growth in this market. Countries in Europe are focusing on clean sources of energy, which enables them to eliminate greenhouse gas emissions in the global scenario. For instance, In July 2018, Siemens had signed an agreement with German company STEAG GuD Herne (STEAG) in Herne, Germany, for constructing a turnkey project of combined cycle power plant, named Herne 6 combined-cycle power plant (CCPP), with a capacity of 600 MW. Hence, growing investment from European countries for combined cycle plants as clean sources of energy is fueling the growth of this market.
Asia-Pacific is also estimated to hold significant growth in the market share during the projected period. Growing demand and substantial investments for a clean source of energy and the adoption of a combined cycle power plant are the major factors attributed to the growth of the market in the region. Countries in Asia-Pacific, such as China, Japan, and India, are consistently focusing on generating clean sources of energy, and significant investments are being made to reduce emission levels. For instance, in May 2018, Mitsubishi Hitachi Power Systems, Ltd. had received a contract to provide two gas turbines for a gas turbine combined cycle (GTCC) power plant fired by natural gas. Hence, growing investments in clean sources of energy and the adoption of the combined cycle plant leverage the demand during the forecast period.
GE to Focus on Technological Advancements and Strengthening Its Distribution Network
In May 2016, GE, a pioneering technology leader in industrial products and automation and power grids, had acquired the heat recovery steam generator business of Doosan Engineering & Construction for USD 250 million. This acquisition had helped GE to meet the growing demand for its combined-cycle power plant solutions, which utilize HRSG technology and expand its product offerings.
Key companies are investing significantly in integrating advanced monitoring and optimizing technologies. Original equipment manufacturing experience, monitoring, and analyzing pressure in an HRSG have been gaining interest and support from investors. Further, investments in developing a clean source of energy by combined cycle plants are also propelling the demand for heat recovery steam generators.
At present, the global market is prominently dominated by the players mentioned above, holding nearly more than half of the share. The dominance of key players is dependent on their spending in research & development activities, incorporation of advanced features, operational efficiency, innovative strategic partnerships and acquisitions, and technological up-gradation.
The heat recovery steam generator manufacturers are primarily focused on developing technologies such as monitoring pressure, flue gas analyzers, and monitoring steam rate, which leverages the efficiency and reliability in operation. These are some of the essential features majorly provided by the key players in the global market.
Heat recovery steam generator is primarily used in a combined cycle power plant, which is one of the clean sources of energy. Countries are converting aged thermal power plants into combined cycle power plants to reduce emission levels, which leading to a rise in demand for heat recovery steam generators system. Hence, rising investment and government initiatives for converting thermal power plants into a combined cycle power plants also holds a promising opportunity for the heat recovery steam generator market growth.
The heat recovery steam generator market report offers qualitative and quantitative insights on this market and the detailed analysis of market size & growth rate for all possible segments in the market.
An Infographic Representation of Heat Recovery Steam Generator Market
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Along with this, the report provides an elaborative analysis of market dynamics, emerging trends, and competitive landscape. Key insights offered in the report are the advancement in technology by individual segments, recent industry developments such as partnerships, mergers & acquisitions, Porter’s five forces analysis, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.
Value (USD Billion)
By Power Rating
As per the Fortune Business Insights study, the market value was at USD 0.88 Billion in 2018.
The market is projected to grow at a CAGR of 4.2% in the forecasted period.
The North America market size stood at USD 0.24 billion in 2018.
The power industry, oil & gas industry, chemical, and paper and pulp industry are the prominent industries where heat recovery steam generators are deployed on a large scale.
In 2018, the global market was USD 0.88 billion, and it is anticipated to reach USD 1.22 billion by 2026 growing at a CAGR of 4.2% during the forecast period (2019 -2026).
Based on power rating, the above 100 MW segment is holding the largest share in the global market.
Growing demand and significant investments for a clean source of energy and increasing adoption of combined cycle power plants are the major factors fueling the demand for the market. However, high maintenance cost restraints market growth in the projected period.
The top players in the market are GE Power, Siemens, ABB, Babcock & Wilcox, Amec Foster Wheeler, Cleaver-Brooks, Nooter/Eriksen, Inc., Alstom, Mitsubishi Heavy Industries, Bharat Heavy Electricals Limited, Sofinter, Technology Transfer Services, and Coepro.
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