Industrial Gas Turbine Market Size, Share & COVID-19 Impact Analysis, By Capacity (1-2MW, 2-5MW, 5-7.5MW, 7.5-10MW, 10-15MW, 15-20MW, 20-30MW, 30-40MW, 40-100MW, 100-150MW, 150-300MW, 300+MW), By Technology (Heavy Duty, Light Industrial, Aeroderivative), By Cycle (Simple Cycle, Combined Cycle), By Sector (Electric Power Utility, Oil & Gas, Manufacturing) and Regional Forecast, 2020-2027

The global industrial gas turbine market size was valued at USD 10.45 billion in 2019 and is projected to reach USD 10.70 billion by 2027, exhibiting a CAGR of 2.6% during the forecast period (2020-2027).

An industrial gas turbine is a combustion engine that is used to generate mechanical energy from various fuels such as natural gas or liquid fuels. This mechanical energy is used to drive an integrated generator that produces electrical energy. Traditional gas-fired and oil-fired steam power plants have been replaced by very efficient combined-cycle power plants using gas turbines for the combustion of gas or oil. Increasing demand for electricity across the globe, along with high demand for clean energy, are the major factors that are expected to propel the global market growth from 2019 to 2027.

COVID-19 Pandemic Affects Heavily On Power Projects

The coronavirus (Covid-19) was first identified in China’s Hubei province in December 2019 and has since become a global health threat, affecting more than 150 countries. The power sector is among the most widely affected domains and the lockdowns have added to the adverse effect of the pandemic. The lockdowns have caused delays in power projects due to supply chain disruptions, unavailability of human resources, and issues in project financing. Recently, the Myanmar power plant projects which initially scheduled for completion by this summer were delayed due to COVID-19. The Deputy Minister for Electricity and Energy (MOEE) said three imported liquefied natural gas (LNG) power projects and a gas power project are still not operational because of the COVID-19 pandemic. Due to travel restrictions and commercial flight bans, the power generation equipment, and the machinery, and experts required to install it were unable to reach Myanmar by the original deadlines.

The U.S. power plant operators continue to change procedures at their facilities, including pushing back scheduled maintenance due to lockdowns and quarantines associated with the coronavirus pandemic. The changes are affecting companies such as General Electric (GE) and Siemens, which are major manufacturers of the industrial gas turbine as well as service providers to power plants, at a time when these global companies already are taking a revenue hit due to COVID-19.

LATEST TRENDS

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Broader Scope in Emerging Economies

The rise in the industrial hubs, coupled with growing foreign direct investment (FDI) in all major manufacturing sectors across the emerging economies such as China, India, Brazil, and Southeast Asian countries are projected to create lucrative growth opportunities for the industrial gas turbine market during the forecast period. Emerging economies are being focused on by various foreign developers who intend to set up their businesses through FDI incentive schemes. This will indirectly boost the economy of the country and enhance industrialization.

According to the United Nations ESCAP, in 2018 Asia Pacific region attracted 45% of global FDI inflows and was responsible for 52 percent of global outflows. Moreover, these countries have evolved and restructured their manufacturing policies and procedures to attract investments and enable growth. Industrialization will certainly boost the automation process to ease operations and improve the overall efficiency of production. Hence, it can be concluded that the growth of the industrial sector, especially in the emerging economies, will create an opportunity for the global market.           

DRIVING FACTORS

Gas Turbine Technology Reduces Greenhouse Emissions

Conventional coal-fired power plants have been known to emit large amounts of toxic gases,  and contribute majorly to global warming. For example, the International Energy Agency’s Global Energy and CO2 Status Report of 2018 finds that coal-fired power generating plants were the largest contributor to emissions in 2018, increasing at a rate of 2.9% from 2017. Moreover, the report also states that 30% of global CO2 emissions in 2018 were as a result of coal-generated electricity. Thus, the urgency to develop cleaner techniques to generate electricity is expected to ramp up the demand for these gas turbines in the coming decade.

The primary fuel of gas turbines, natural gas, contains very little sulfur, meaning that virtually no sulfur dioxide is emitted. CO2 emission from gas turbines burning natural gas is also very low–0.37 kilograms of CO2 per kWh of electricity generated. This compares to 1.01 kg/kWh for lignite and 0.8 kg/kWh for hard coal.

Increasing Demand for Electricity will Create a Subsequent Demand for Gas Turbines

High population growth across the globe, flourishing industrial sector, and growth in infrastructure development activities are all leading to a huge rise in demand for electricity. As the demand for electricity increases, several countries across the world are increasing their electricity generation capacity by installing new plants or expanding the capacity of the existing one. Due to stringent government norms regarding greenhouse gas emissions, companies are more inclined towards the adoption of industrial gas turbine systems. These factors will augment the growth of the global market over the given industry forecast period.

RESTRAINING FACTORS

Volatility in Natural Gas Prices May Hinder Market Growth

Natural gas prices are affected by actions that can possibly disrupt the supply of natural gas. Geopolitical tensions are adisruptive factor that causes uncertainty about the supply or demand for natural gas. This can lead to higher volatility in the prices of gas. The cost of natural gas in the U.S. has fallen drastically as a result of shale gas exploitation, but elsewhere in the world, the cost remains relatively high. Most of the countries in the Middle East region account for a significant share of natural gas reserves. It is a highly unstable region due to political and cultural issues. Moreover, from the past few months, due to the COVID-19 pandemic, the demand for natural gas decreased significantly. Thus the prices of natural gas also dropped, which creates a negative impact on market growth.

SEGMENTATION

By Capacity Analysis

The 150-300 MW Segment Would Hold the Largest Market Share

Based on capacity, the 150-300 MW segment dominated the global industrial gas turbine market in 2019. These capacity turbines are primarily used in the power generation industry. As the trend of power generation has shifted to reduce emissions of GHGs, mainly considering the environmental factors, the 150-300 MW has gradually acquired a good percent of market share in the global market.

The small capacity industrial gas turbine segments of 1-2 MW, 2-5 MW, 5-7.5 MW, 7.5-10 MW, 10-15 MW, and 15-20 MW are proliferating due to the easy availability of gas. These small capacity gas turbines are modular and can operate on two fuels. These small capacity turbines are used for combined heat & power plants and co-generation plants.

By Technology Analysis

Heavy Duty Technology to Hold a Dominant Market Share

Based on technology, the heavy-duty segment held the major share of the global market in 2019. A growing number of manufacturing plants, coupled with the integration of large scale economic zones across developing nations, have set up a commendable business platform. Growth in the integration of captive generating power stations to serve the electricity demand across industrial establishments will expand the heavy-duty industrial gas turbine market.

Aeroderivative segments have gained significant market share in the global market due to the availability of highly flexible and mobile technologies. Furthermore, the segment finds a diverse application portfolio, including marine propulsion, utility generation, and district heating.

By Cycle Analysis

Combined Cycle Segment Hold Dominant Market Share

Based on cycle, the combined cycle segment lead the global market in 2019, majorly due to environmental proximity, effective waste heat utilization, and operational efficiency. The combined cycle requires more investment as compared to the simple cycle, and thus these plants are built in phases. First, the simple cycle plants are constructed and then are converted to combined cycle gradually.

By Sector Analysis

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Electric Power Utility Sector Held the Highest Market Share

Based on sector, the electric power utility segment dominated the global market in 2019. Growing focus toward the refurbishment of traditional steam and coal-fired power plants with natural gas or other renewable energy power generating stations will boost the global market. The high efficiency in power generation from gas turbines has given this technology an upper hand in comparison to the conventional power generation plants. Electricity generation from natural gas was acquired more than 20% share of the global electricity generation in 2018.

REGIONAL INSIGHTS

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Geographically, the global market has been analyzed across five key regions, including North America, Europe, Asia Pacific, the Middle East & Africa, and South America. North America region is anticipated to lead the market over the forecast period. The North America region has a large percentage of its industrial gas turbine plants operating on natural gas owing to the ongoing increased shale gas exploration activities taking place in the region. According to the U.S. Energy Information Administration (EIA), presently coal accounts for about more than 40% of the nation’s power versus around 25% from natural gas. By 2035, the agency expects natural gas will be the primary fuel for power generation.

Asia Pacific is expected to grow at the highest pace during the industry forecast period. The market growth in Asia Pacific can be attributed to several factors such as the rising demand for energy, rapid industrialization, and increasing demand for clean energy technologies. This region is majorly dependent on power production using coal. Coal combustion results in a significant amount of air pollution. Government initiatives to reduce carbon emissions have promoted the use of gas turbines in countries like Japan, China, Australia, South Korea, India, etc. As per the Government of China 12th Five-Year Plan, the country has set up a target of deploying 1,000 gas-fired distributed energy projects with 50GW capacity by 2020.

KEY INDUSTRY PLAYERS

Key Participants Are Concentrating On New Contracts

The industrial gas turbine market is highly fragmented with the presence several large scale players across the world. These include a group of 4-5 key companies with a wider geographic presence. Several companies are increasingly participating in organic & inorganic developments to solidify their market position globally. The companies are looking for new contracts to increase their market share. For instance, in December 2019, Doosan Heavy Industries & Construction (DHIC) announced that it had signed an agreement with Korea Western Power Company to supply a gas turbine to the Gimpo Combined Heat & Power (CHP) Plant. The construction of the power plant, which is to be located in Gimpo city of the Gyeonggi Province, is scheduled to commence in 2020 and will be completed by 2022.

List of Key Companies Profiled:

• GE (U.S.)


• Siemens (Germany)


• Mitsubishi Hitachi Power Systems, Ltd. (Japan)


• Ansaldo Energia (Italy)


• Solar Turbines (U.S.)


• Kawasaki Heavy Industries, Ltd. (Japan)


• Doosan Heavy Industries & Construction (South Korea)


• Bharat Heavy Electrical Limited (India)


• OPRA Turbines (The Netherlands)


• Rolls-Royce (U.K)


• Vericor Power Systems LLC (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• August 2019 – General Electric (GE) has received two orders for 6F.03 gas turbines from Guangdong Lee & Man Paper Manufacturing and China Huadian (CHD) Xiangyang in China. The 6F turbines are claimed to be capable of operating on a wide range of natural gas, distillate, and synthetic fuels and generates up to 87MW of power in a simple cycle.


• July 2018 – Siemens introduced a new SGT-800 performance enhancement that is applicable to all existing SGT-800 units with 43-47.5-MW ratings. For turbines in simple-cycle mode, the upgrade offers up to 3.5% efficiency increase and an additional 10 MW output, which boosts the installed capacity of a 47.5 MW unit to up to 53 MW.

REPORT COVERAGE

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The market research report for industrial gas turbine provides a detailed analysis of the market and focuses on key aspects such as leading companies, capacity, technology, cycle, competitive landscape, and leading sector of the product. Besides this, the report offers insights into the market trends and highlights key global industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

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