Market Trends of Industrial Gas Turbine Industry
The Power Segment is Expected to Dominate the Market
- Increased natural gas production has shifted the global focus on developing gas-fired power plants. Compared to coal-fired power plants, gas-fired power plants emit relatively lower greenhouse gases. Additionally, gas-based power generation could be the most efficient way to meet the rising worldwide need for peak power.
- Gas turbine power generation is more efficient than conventional power generation, giving this technology an advantage. In 2023, power generated from natural gas accounted for 22.5% of all electricity generated globally, while electricity generated from coal has steadily decreased in share.
- According to the Statistical Review of World Energy Data, in 2023, global primary energy consumption increased by 2% compared to the previous year. The demand for electricity increased more than the overall energy growth, resulting in more people accessing electricity.
- Furthermore, future electricity demand is expected to rise owing to the electrification of transportation. Many countries have set goals to gradually phase out the sale of passenger vehicles that use fossil fuels. Norway and Costa Rica were among the first to set goals, with 2021 and 2025 as their respective deadlines.
- Electricity generation from gas increased by 1.2% globally in 2023. In 2023, the electricity generation from gas was 6746.3 terawatt-hours compared to 2022, which was 6668.9 terawatt-hours. Further, in the future, the electricity demand is expected to increase continuously, which in turn is expected to surge the use of natural gas for power generation, thereby driving the use of gas turbines in the power sector.
- According to the International Energy Agency, global electricity demand is forecast to grow by around 4% in 2024, up from 2.5% in 2023. Also, as per the organization, global electricity consumption is set to continue into 2025, with growth of around 4% again.
- Therefore, factors such as increased access to electricity, an increase in the number of electric vehicles, and increased concerns over greenhouse gas emissions from coal-based power plants are expected to help drive the market during the forecast period.
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Asia-Pacific is Expected to Dominate the Market
- Asia-Pacific is expected to be the fastest-growing market during the forecast period due to an increase in energy demand and natural gas usage in the region. There has been a significant increase in the use of gas for power generation and transportation in the region, which aims to reduce greenhouse gas emissions.
- The demand for gas in China grew from around 377.6 billion m3 in 2022 to around 404.8 billion m3 in 2023, with much of the demand coming from the industrial and transportation sectors. China's gas consumption increased by 7.2% in 2023 and reached 10.1% of global gas consumption.
- With rising pollution concerns worldwide due to industrialization, especially in Asia-Pacific, the shift toward clean energy generation from gas turbines has gained considerable momentum. The region is also exploring the potential for clean and stable power generation from Ammonia gas.
- For instance, in March 2024, Mitsubishi Heavy Industries Asia Pacific Pte. Ltd, a subsidiary of Mitsubishi Heavy Industries, agreed with a Memorandum of Understanding with PTT Public Company Limited to explore and conduct a pre-feasibility study for using 100% ammonia for gas turbine power generation in Thailand.
- Further, in the future, the region is focusing on reducing dependency on coal-fired power plants to reduce greenhouse emissions. These priorities will pave the way for a substantial increase in natural gas use, thereby driving the demand for industrial gas turbines for power generation. According to the GECF Global Gas Outlook 2050, the region's gas demand is projected to grow by 78% from 2021 to 1,620 bcm by 2050.
- Therefore, the factors above are expected to drive the market during the forecast period, similar to the trend witnessed in recent years.
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