The world’s industrial gas turbine market should rise annually and reach $10.23 billion by 2026, according to the summary of a new report by Fortune Business Insights.

The gas turbine sector – led by companies such as Siemens, Mitsubishi Hitachi Power Systems (MHPS), Rolls-Royce, Ansaldo Energia and Kawasaki Heavy Industries, among others – is expected to grow at an annual rate of approximately 1.4 per cent over the next seven years, the summary indicates.

Increasing urbanisation, as well as the global environmental concerns over the environmental impacts and costs of coal-fired power, are believed to be the main drivers of the rising market growth of this sector.

Quoting a report by Unesco, Fortune Business Insights estimates by nearly two-thirds of the world’s 8.1 billion will be living in cities. Asia-Pacific and Latin America will have the highest number of megacities (or those having populations over 10 million).

“Rampant urbanisation is expected to put greater pressure on resources and emit more harmful gases through home appliances and coal-fired power plants in these regions,” the report summary reads. “This will significantly swell the global industrial gas turbine market size.”

Rising energy demand from manufacturing plants will drive the gas turbine market size

The current global industrial gas turbine market was estimated at more than $9 billion, in 2018. The sector is expected to also grow as a result of concerns of greenhouse gas emissions, with the International Energy Agency’s (IEA) report finding that coal-fired power plants are contributing nearly a third of global carbon dioxide emissions.

New gas-fired plants emit less than half of the CO2 that coal-fired power stations do, according to reports. Utilities such as New Orleans-based Entergy Corp. are replacing older plants with new gas-fired combined-cycle plants such as the St. Charles station which started operations this summer.

Some of the major companies participating in this market include MHPS, Siemens, GE, Ansaldo Energia, Solar Turbines and PW Power Systems. Another company which is reportedly entering the large gas turbine manufacturing space, is South Korea-based Doosan Heavy Industries.

MIDEAST: RISING GROWTH

Meanwhile, the Middle East gas turbine market was worth over $900 million in 2017 and is anticipated to exceed annual deployment of 4 GW by 2024.

“Strengthening government measures toward renewable energy integration along with restructuring of trade policies and investment flow will stimulate the Middle East gas turbine market growth,” said a new growth forecast report by Graphical Research.

Refurbishment and retrofitting across the key power markets in line with technological enhancements across the materials, combustion, cooling and aerodynamics industries will further drive the industry landscape, it added.

Rising energy demand from manufacturing plants coupled with paradigm shift toward the integration of effective energy mix will drive the gas turbine market size. The industry growth is further attributed to the implementation of effective energy utilisation policies toward the expansion of combined cycle power plants.

Ongoing installation of co-generation units to withstand energy consumption in commercial, small industrial and isolated transmission and distribution networks will propel the gas turbine market, the reports said. In addition, ongoing expansion of effective re-generation units to withstand minimal heat requirements will further boost the industry landscape.

Operational efficiency, lower overall operational cost, effective environmental proximity, and effective waste heat utilisation are the key factors justifying the product demand. In addition, growing industrial headway along with increasing demand for energy and stability in gas prices will further develop a positive scenario for the gas turbine market.

Increasing deployment of gas turbines across process industries by replacement of coal by gas in a host of small-scale industrial applications will further enhance the growth prospects of Middle East gas turbine market. In addition, government reforms to curtail emissions along with stalling of gas prices in the current industrial regime will further pose immense potential for gas turbine deployment, it said.

Middle East gas turbine market will witness robust growth on account of government funding and extensive research and development (R&D) reforms toward installation of efficient combined cycle generation units. For instance, in 2015, European Investment Bank granted a loan of $600 million to the Government of Egypt for the establishment of Damanhour Power Station of 1,800 MW capacity.

Shifting trends toward energy-efficient technologies coupled with increasing focus toward replacement of inefficient coal fired power plants will drive the Middle East gas turbine market. Increasing efforts for power capacity augmentation to meet the constantly increasing power demand will further provide a thrust to the industry dynamics.

As per Opec 2016, Saudi Arabia depends on oil exports for about 85 per cent of its annual revenues and is expected to replace oil power plants by gas fired generating stations in the country.

Notable participants across the gas turbine market in Middle East include Centrax, Siemens AG, Wartsila, General Electric, Mapna, Toshiba, Capstone Turbine, Solar Turbines, Score Group and Ansaldo Energia.