Market Definition
A gas turbine refers to the combustion engine that helps convert natural gas & other fuels to mechanical energy for producing electrical energy. These turbines are highly efficient and are replacing the oil & gas-fired power plants with a combined cycle power plant that utilizes such turbines. The services provided by the gas turbine are called gas turbine services. Moreover, they can work under high operating temperatures and mechanical stress, which further surges the need for turbine repair & maintenance services.
Gas turbines are used most commonly for distributed energy applications. The ever-increasing higher peak loads in utilities are driving the need to ensure the peak performance of gas turbines. Regular maintenance is one of the most highly preferred options for ensuring the highly effective performance of gas turbines.
Market insights
The Global Gas Turbine and Turbine Services Market is anticipated to grow at a CAGR of around 4% during the forecast period, i.e., 2021-26. The market growth attributes primarily to the increasing demand for highly efficient gas turbines, reduced prices of natural gas, and surging shale gas production. Gas turbine services help reduce operational costs and improve the safety & life of the equipment. However, the higher need for specialized & skilled human power to operate turbines makes turbine services an expensive process.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2016-19 |
| Base Year: 2020 | |
| Forecast Period: 2021-26 | |
| CAGR (2021-2026) | 4% |
| Regions Covered | North America: US, Canada, Mexico |
| Europe: Germany, UK, France | |
| Asia-Pacific: China, India, Japan, South Korea, Indonesia, Vietnam, Singapore, Malaysia | |
| South America: Brazil, Argentina | |
| Middle East & Africa: UAE, Saudi Arabia, South Africa, Iran, Iraq, Oman, Kuwait, Egypt, Qatar | |
| Key Companies Profiled | GE, Siemens, Westinghouse, Alstom and MH Power, etc. |
| Unit Denominations | USD Million/Billion |
Moreover, alarming environmental concerns due to the massive carbon emissions from coal-based power generation are propelling the adoption of natural gas-based turbines, which are responsible for low carbon emissions and driving the global market. Companies are providing multi-year service contracts to their end-users that include either Basic or Overall Maintenance. The basic maintenance only involves preventive measures and the overall maintenance includes repairing defective equipment. Since these multi-year agreements are quite economical, they are providing a lucrative growth opportunity for the market.
The demand for natural gas-powered turbines is increasing significantly, especially across Europe & North America. However, emerging economies like India & China are still using coal-based power generation owing to lower costs. This factor might act as a prominent restraint for sales & maintenance contracts of new gas turbines. Besides, limited natural gas reserves shall also hinder the market growth in the years to come.
Impact of Covid-19 on the Global Gas Turbine and Turbine Services Market
The imposition of lockdown due to the wake of the Covid-19 pandemic has impacted major economies worldwide. It halted production activities of most end-user industries and significantly reduced oil & gas demand. In addition, power requirements from commercial & industrial end-users witnessed a substantial decline amidst the pandemic, which directly impacted the demand for gas turbines.
The lockdown resulted in the scarcity of workforce and disruption in the supply chain that affected several power plant projects. Governments worldwide restricted cross-border trade, which impacted the installation of power generation machinery & equipment. Moreover, there were delays (more than usual) in the commercial operation schedules of the proposed electric generator projects, including natural gas combustion turbines.
Furthermore, the imposition of lockdown also led to the overcapacity in the power generation equipment and softness of prices, which means companies were selling lower power generation gas turbines and receiving fewer unit prices for each sale.
However, the impact of overcapacity, reduced demand, and soft prices are slowly recovering themselves. The demand for natural gas is projected to increase significantly in the coming years, which, in turn, would boost the gas turbine market. With the upliftment of lockdown, delayed projects have resumed and are helping the market recover from losses. Moreover, the reopening of industries has decently surged the demand for gas turbines & turbine services across different countries worldwide.
Market Segmentation
By Type:
Based on Type, Heavy Duty Turbines attain the largest share of the Global Gas Turbine and Turbine Services market, mainly due to their high-capacity operations, economic cost structure, & lower pressure ratios to yield high specific power, coupled with the surging number of manufacturing plants.
Moreover, smaller dimensions, low investment costs, & maximum cycle efficiency associated with heavy-duty turbines make them suitable for heat recovery power generating plants and the power & utility industry. Additionally, the rapid expansion of captive generating power stations owing to the growing electricity demand in the industrial sector shall further boost the market for heavy-duty turbines.
On the other hand, the demand for Aeroderivative turbines is expected to witness the fastest growth during the forecast period, owing to the mounting usage in various applications like utility generation, district heating, and marine propulsion. These turbines are lighter in weight, take up less space, & emit low emissions and enable renewables to operate when needed, which helps save fuel. Besides, they are designed for immediate removal & replacement that facilitate fast maintenance & greatly reduced downtimes. Hence, these aspects shall contribute to the increasing demand for Aeroderivative turbines in the years to come.
By Application:
Of all Applications, Power Generation holds the largest share in the Global Gas Turbines and Turbine Services market. The burgeoning demand for gas turbines for power generation is driven primarily due to the rising government focus on reducing the use of coal-based power plants to minimize carbon emissions. The establishment of nuclear-based power plants requires massive investments and includes operational risks. However, power generation through gas turbines is the safest & cost-effective option.
Furthermore, the increasing consumption of oil & gas worldwide is also surging the demand for gas turbines. In addition to this, stringent emission norms & low prices of natural gases would also escalate the usage of gas turbines in the oil & gas industry over the forecast years.
Key Trend in the Global Gas Turbine and Turbine Services Market
Regional Landscape:
Geographically, among all regions, North America dominates the Gas Turbine and Turbine Services Market. It is due to the extensive availability of gas-driven turbine plants and a surge in the shale gas exploration activities across the region. In 2020, the US Energy Information Administration (EIA) stated that about 40% of US electricity generation comes from natural gas. Coal was the third-largest energy source for US electricity generation, accounting for around 19%. As a result, the increasing use of natural gas in North America, especially across the US, has fueled the regional market growth.
On the other front, Asia-Pacific is projected to witness the fastest market growth during 2021-26 due to the increasing energy demand on account of rapid urbanization & industrialization. In addition, the shift from the coal-based for power production to clean energy sources owing to stringent government norms to reduce carbon emissions is another crucial aspect projected to boost the Asia-Pacific Gas Turbine and Turbine Services Market in the years to come.
Market Dynamics:
Key Driver: Burgeoning Electricity Requirements Worldwide
The electricity demand is astronomically increasing worldwide. It owes to rapid urbanization & industrialization, along with burgeoning infrastructural developments worldwide. Moreover, the construction of the various smart homes worldwide is also propelling the electricity demand. . In order to fulfill the growing electricity demand, public & private sectors are either installing new power plants or expanding the capacity of their existing plants, which, in turn, is surging the installation of gas turbines in these power plants since they are less harmful, thereby contributing to the growth of the Global Gas Turbine and Turbine Services Market.
Growth Challenge: Volatility in Prices of Natural Gas
Factors like geopolitical tensions and disruption in the supply of natural gas are leading to uncertainty in the demand & availability of gas, which, in turn, has increased the gas price volatility. Due to shale gas exploitation, the cost of gas in the US has declined dramatically. However, prices are relatively high in other parts of the world. Moreover, due to the Covid-19 pandemic, the significantly decreased demand for natural gas also negatively affected the growth of the Global Gas Turbine and Turbine Services Market.
Competitive Landscape
According to MarkNtel Advisors’, the key players with a considerable market share in the Global Gas Turbine and Turbine Services market include GE, Siemens, Westinghouse, Alstom and MH Power etc.
Key Questions Answered in the Market Research Report:
Market Outlook, Segmentation and Statistics:
Frequently Asked Questions
A. The Global Gas Turbine and Turbine Services Market is forecast to grow at a CAGR of around 4% during 2021-26.
A. Power Generation holds the largest share of Global Gas Turbine and Turbine Services Market, which would create profitable growth opportunities for the leading market players in the coming years.
A. Growing environmental concerns and increasing demand for highly efficient gas turbines are the key factors projected to drive the Global Gas Turbine and Turbine Services Market during 2021-26.
A. In the coming years, the Global Gas Turbine and Turbine Services Market is expecting significant growth opportunities owing to the resumption of projects & reopening of industries, i.e., fueling the energy consumption.
