Aeroderivative Gas Turbine Market Will Witness Traction Due to its Growing Demand from Mobility Segment: Technavio

LONDON–(BUSINESS WIRE)–According to the latest market study released by Technavio, the global aeroderivative gas turbine market is expected to grow at a CAGR of almost 5% during the forecast period.

Global aeroderivative gas turbine market is expected to grow at a CAGR of almost 5% during the period 2016-2020.

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This research report titled ‘Global Aeroderivative Gas Turbine Market 2016-2020’ provides an in-depth analysis of the market in terms of revenue and emerging market trends. This report also covers the present scenario and the growth prospects of the global aeroderivative gas turbine market.

Increasing demand for aeroderivative gas turbines from the aerospace and marine sectors as well as the replacement of coal-fired power plants by natural gas-based gas turbine power plants are contributing to the growth of the market. Heavy investments to continuously improve the efficiency and durability of gas turbines are also contributing to the market growth. Manufacturers are focusing on developing high-efficiency gas turbines by decreasing fuel costs. These costs account for a major portion of the overall operation cost, as well as the levelized cost of energy (LCOE) of gas turbines, to make the most on the growing trend of natural gas-based power generation.

Anju Ajaykumar, a lead analyst at Technavio, specializing in tools and components research, says, “Increase in demand for commercial aircraft, particularly from APAC, due to rising air passenger traffic will contribute to the upsurge in demand for aeroderivative gas turbines. The US and Europe-based commercial aircraft manufacturers, such as Boeingand Airbus, are expected to benefit from the increasing demand from APAC.”

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Based on end user, the report categorizes the global aeroderivative gas turbine market into the following segments:

• Mobility
• Power generation
• Oil and gas
• Others

Global aeroderivative gas turbine market by end-user 2015 (% share)

Source: Technavio

The top three end-user segments for the global aeroderivative gas turbine market are as follows:

Mobility sector

The mobility segment primarily consists of aeronautic and marine applications of gas turbines, and is considered to be the major end-user segment in the market. This development is attributed to the significant rise in demand for air travel, resulting in the addition of aviation fleets worldwide, corresponding to growth levels of about 5%.

The naval applications of aeroderivative gas turbines are expected to be dominated by GE’s LM2500 gas turbine, an aero derivative of the CF6 prominent for commercial transport aircraft, in terms of production value. During 2016-2029, it is projected that GE will build 267 LM2500s for naval ships. GE is expected to be followed by Rolls-Royce with a market share of approximately 46% during the forecast period. Rolls-Royce’s high efficiency MT30 gas turbine competes neck to neck against the LM2500 in power class. The turbine has been also evaluated by the U.S. Navy to power the DDG 51 Arleigh Burke class Destroyers.

Power generation

“With rising demand for global power and cleaner solutions, aeroderivative gas turbines are increasingly being used for power generation. APAC countries such as China and India should significantly contribute to the growth of the segment with a large number of ongoing power generation projects in these regions,” adds Anju.

One of the most important factors impacting the growth of this market is the cost of power generation across different regions. Fuel cost plays a vital role in determining generation cost. Natural gas is the primary fuel used in aeroderivative gas turbines. Another important factor impacting the segment is the CO₂ emission allowance price. The shift of power generation from coal-based power plants to natural gas-fired gas turbine power plants is highly viable with the CO₂ emission allowance priced at 28 pounds/ton CO₂.

Oil and gas sector

The oil and gas industry, including all segments of the value chain, such as the upstream, midstream, and downstream, uses gas turbines for power generation. The midstream and downstream segments are likely to drive the global gas turbine market in the coming years. In the upstream segment, gas turbines have been historically used in areas of high-volume gas production. Production facilities in the Middle East and North America, which usually have a basic gas processing plant, rely on gas turbine-driven captive power plants to power equipment.

The midstream segment has seen the most significant growth in the use of gas turbines in the oil and gas sector. The emergence of natural gas pipelines for the provision of energy security has ushered an era of cross-country and multi-country pipelines. The downstream segment has used gas turbines for decades and the association is projected to grow. Power requirements of refineries of any magnitude are extensive. The most critical aspect of this power demand is the necessity for reliable power, as refineries have critical hot oil and steam systems that require uninterruptible power.

The top vendors highlighted by Technavio’s research analysts in this report are:

• GE
• Mitsubishi Hitachi
• Siemens
• Vericor
• Zorya

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