China to take Middle East gas turbine crown
Replacement of coal fired power plants will see country hit top spot.
China is expected to become the leading gas turbine region as the position of the Middle East declines gradually, according to new research.
The Far East country is aggressively promoting gas turbine plants in a bid to reduce dependence on coal plants and promote fuel diversification, Frost and Sullivan says.
The global gas turbine market has been on the upswing due to the replacement of ageing coal plants with modern gas-fired power stations as well as the growing availability and usage of natural gas in power generation, it adds.
New analysis from Frost & Sullivan, Global Gas and Steam Turbine Markets, finds that the market earned revenues of $32.51 bn in 2013 and estimates this to reach $43.49 bn in 2020.
"Although the current profitability of gas-fired generation is low in regions such as Europe, gas turbines will be the technology of choice for future capacity additions," said Frost & Sullivan Industry Director Harald Thaler.
"Gas turbines will also benefit from increasingly stringent emissions legislation and roll out of emissions trading schemes in emerging markets, as they curtail the growth of steam turbines."
The rapid expansion of renewable energy has created uncertainties regarding the future of carbon markets, which, in turn, has affected the outlook for conventional generation, the report says.
In this scenario, gas turbine manufacturers are focusing on the small- and medium-sized gas turbine output ranges to leverage the high demand for flexible generating units.
Likewise, small- and medium-sized steam turbine output ranges are forecast to outstrip the larger ranges due to a higher number of industrial applications, especially in the expanding oil and gas industry.
Smaller units are also expected to have better financing prospects.
"The steam turbine market is expected to experience significant consolidation over the decade because of the presence of a large number of manufacturers and the growing internationalisation of Chinese OEMs," says Thaler.
"Comparatively, the gas turbine market will see limited acquisition activity beyond the recent GE-Alstom merger."
With regards to steam turbines, while China's share of this market is forecast to decline over time--albeit remaining in a dominant position--India's share will expand upon resolving coal shortage issues.
Southeast Asia will also grow strongly as it looks to coal to reduce gas dependence.
The European market, on the other hand, will remain weak amid uncertainty over future power demand growth and financially troubled utilities.