Asia will become the number one market for gas turbines in the next five years, according to new research.
The study from analysts at GlobalData found that the Asia-Pacific region will overtake the EMEA as market leader in 2022.
However, the overall value of the global gas turbine market will decline in the next five years compared to the previous half-decade, says the report. It forecasts that the market value between now and 2022 will be $37.97bn – it was $52.39bn between was 2013 and 2017.
The global slowdown is mainly attributed, unsurprisingly, to the growth of renewable technologies and volatility in gas spot price markets.
GlobalData power analyst Nirushan Rajasekaram said: “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; utilizing 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.”
Rajasekaram said that cost plays a significant role in assessing potential power generation technologies. “Nations will prefer to capitalize 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, he added that 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 offers the backup capabilities of coal-based generation, with the added benefit of low emissions, allowing nations to achieve their environmental commitments without destabilizing their burgeoning development growth. China, the dominant nation within the region has prioritized 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 added: “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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