Analysis from research and consulting firm Frost & Sullivan shows that the steam and gas turbines market in Europe—which has seen an all-time low in the past two years—is expected to pick up in the medium-to-long term, even though the sector has been hard-hit by uncertainties concerning carbon trading, power industry legislation, and commodity price surges.
The market, which earned revenues of $473 million in 2010, is estimated grow more than four-fold to reach $2.138 billion in 2017. The firm said that manufacturers of steam and gas turbines saw difficult times over 2009 and 2010 but were sustained by orders placed during better market conditions between 2007 and 2008. “New orders are still low in number, but they are anticipated to increase from 2012,” it says in an analysis, “Western European Gas and Steam Turbines Market.”
The growth will come from both established and developing economies, and it will get a boost from the decommissioning of old conventional thermal power plants as well as nuclear power facilities. “High replacement needs across the UK, Germany, France, and Italy due to decommissioning capacity and the need to comply with legislation will fuel the demand for both gas and steam turbines in these regions,” Frost & Sullivan Industry Analyst Pritil Gunjan said.
The western European market for gas and steam turbines offers a positive outlook, as it will regain momentum between 2012 and 2014. The prospects for both gas and steam turbines are in line with developments within the power generation industry. “In addition, other forms of environment-friendly technologies such as co-generation are poised to develop further, contributing to the demand for steam turbines” Gunjan said.
The market will continue to see restraints in the short term, stemming from the recent economic uncertainty and global financial crisis, the firm warns, however. Lack of adequate access to credit finance and concerns regarding economic conditions may result in delays of projects coming live as planned.
“Given that Europe commands only 3 per cent of the world’s gas reserves, most of its demand is expected to be met by imports, thereby [raising] the import dependency of western European countries,” Gunjan said. “However, recent prospects of unconventional gas-fired plants in Europe and the United States are likely to reduce supply pressure for natural gas in the future.”
Increasing competition will spur geographical expansion and technological advances, and this will increase growth momentum among key equipment manufacturers, she said. Among the attractive growth opportunities are those in the emerging regions of the Middle East, Africa, and Southeast Asia. “Moreover, an emphasis on technological improvements such as increased efficiency, syngas, fuel flexibility and carbon capture will drive growth opportunities,” she said.
Sources: POWERnews, Frost & Sullivan