Global gas turbine market set to decline over the next four years

23 October 2018

The global gas turbines market value is estimated to be $6.84bn in 2022, declining with a negative compound annual growth rate (CAGR) of 7.7% between 2018 and 2022, according to GlobalData, the data and analytics company. When comparing the total market value for the 5 year period 2013 to 2017 of $52.39bn and the estimate for 2018 to 2022 of $37.97bn, the CAGR decline is 0.7%. 

The company¹s latest report: “Gas Turbines for Thermal Power, Update 2018 - Global Market Size, Competitive Landscape, Key Country Analysis, and Forecasts to 2022” reveals that the slowdown in the market is mainly attributed to the growing influence of renewable energy technologies and volatility in gas spot price markets. However, the growing influence of developing economies in the global energy market is expected to propel the Asia-Pacific (APAC) region, to overtake EMEA as a market leader in 2022. The market in APAC is projected to grow with a CAGR of 3.95%, between 2018 and 2022.

Nirushan Rajasekaram, Power Analyst at GlobalData, commented: “The need to meet the short term increasing demand for electricity faces significant technical, monetary and supply challenges that are influencing governments’ agendas to generate cheap electricity, utilising indigenous resources and existing power generation infrastructure. The existing infrastructures in most nations are heavily tilted towards coal and a potential shift towards abruptly increasing gas would require substantial investments.”

Cost plays a significant role in assessing potential power generation technologies. Governments will prefer to capitalise on the declining prices of renewables as well as distributed energy technologies and cheaper coal to generate electricity to meet the immediate demand for electricity. Moreover, initiatives to reduce demand through various efficiency measures, would limit the need for new generation capacities, which are capital intensive development projects.

However, the demand for gas turbines is primarily driven by climate change commitments, the ongoing development of suitable gas infrastructure, and evolving technologies which enhance generation efficiency.  

Gas power generation offers the backup capabilities of coal based generation, with the added benefit of lower emissions, allowing governments to achieve their environmental commitments without destabilising the growth in their industrial development. China, the dominant state within the region, has prioritised cleaner technologies such as gas and renewables to support its economic growth. Southeast Asia, a region with a high population and economic growth is also expected to drive the demand for gas turbines.    

Rajasekaram concludes: “In the long run, gas turbines are expected to be a relevant source of power generation. The transition towards low carbon economies, the phasing out of coal, restricted use of nuclear technology, stringent emission norms, the establishment of robust infrastructure and ramping up support for renewables will all help to drive the gas turbines market.”

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