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In the last few years, the global steam turbines market weakened due to a steep fall in fossil fuel based power generation, which declined from 69% in 2009 to 43% in 2019 and also due to stringent environmental regulations.

Nevertheless, the thermal renewables-based (biomass, waste-to-energy, geothermal, and solar CHP, etc.) power generation increased from 3% in 2009 to 17% in 2019, which is expected to propel the steam turbine market growth.

A steam turbine is a mechanical equipment that extracts thermal energy from pressurized steam and transforms it into mechanical work. The hot gaseous steam flows past the turbine, which expands and cools, giving off most of the energy it contains to spin the turbine blades. The turbine is then used to run a generator, producing electricity.

Steam Turbine Market Drivers 

Increasing Demand for Power by End-Use Sector

The global electricity demand is expected to grow at the rate of 5% in 2021 and 4% in 2022 owing to the global economic recovery, after falling by about 1% in 2020 due to pandemic.

Coal consumption in South-East Asia has more than doubled in the past decade, with the most significant growth in Indonesia and Vietnam, followed by Malaysia and the Philippines. Vietnams coal use increased by 4% in 2020, making it only country after China to register coal use increase in 2020.

The introduction of new technologies demanding high power, e.g., cryptocurrency, which is expected to boom in the future. The University of Cambridge’s bitcoin electricity consumption Index states that bitcoin miners are expected to consume roughly 130 Terawatt-hours of energy, roughly 0.6% of global electricity consumption. 

The introduction of 5G technology also demands high power for its operation. As the adoption of 5G surges, the investment in 5G related infrastructure is expected to rise by Telecos and Tower companies; This, in turn, is set to boost power demand significantly. 

The advent of electric vehicles is also bound to increase energy consumption. An average EV requires 30 kilowatts-hours to travel 100 miles- the same amount of electricity an average American home uses each day. According to the US Department of Energy, increased electrification across all sectors of the economy could raise national consumption by as much as 38% by 2050, largely because of electric vehicles.

The global household electricity consumption has increased by 40% as the citizens are forced to work from home. The growing adoption of electrical home appliances due to the rise in consumer disposable income and high living standards encourages consumers to buy different electrical appliances, which is further expected to increase the electricity demand.

Some of the Other Drivers

• Growing demand for energy-efficient systems such as Combined Heat and Power (CHP) systems
• Increasing deployment of Combined Cycle power plants

Restraints

Declining Coal Fired Thermal Power Plants due to Rising Environmental Concerns and High Levelized Cost of Electricity (LCOE)

The International Energy Agency (IEA) calculates that coal alone has been responsible for one-third of all global warming in modern times. In the global steam turbines market, fossil fuel-based power generation declined from 69% in 2009 to 43% in 2019, whereas thermal renewable-based power generation increased from 3% in 2009 to 17% in 2019. 

The amount of coal-based capacity closed down last year was almost equivalent to China’s capacity growth, which meant the growth of coal capacity slowed to the lowest on record, the fourth straight year of decline. 

The US-led the way, shutting down or switching to another fuel of 95 GW of capacity. India and China both plan large-scale closedowns in the coming years. Over half of the EU members committed to phasing out coal by 2030. In the UK, coal provides just 5% of capacity, down from two-fifths six years ago.

More than 40 countries across the globe agreed to phase out use of coal-fired power, the dirtiest fuel source, in a deal to “keep 1.5 C alive” from the CoP 26 climate summit. According to climate think tank TransitionZero, the world needs to shut down nearly 3000 coal-fired power plants before 2030 to have a chance of keeping temperature rises within 1.5 Celsius.

Increasing emphasis on renewable energy, owing to environmental concerns. Many countries are opting for renewable energy generation technologies and imposing emission reduction norms on operating coal-based power plants, which is anticipated to hinder the growth of the steam turbine market.

Some of the Other Restraints

• Accelerating competitiveness of renewable energy sources such as solar and wind over coal.

Opportunities

Growing geothermal energy utilization in viable regions such as Indonesia, Turkey, and Kenya which aim to scale up their geothermal energy production is considered to be emerging markets for steam turbines.

Steam Turbine Market in India

The majority of the demand for steam turbines in 2020 was from the captive power generation and energy-intensive segments like steel besides co-generation segments like cement, paper and pulp, chemicals, and fertilizers, followed by independent power generation.

The International Energy Agency (IEA) estimates also indicate that India will add between 600 GW to 1200 GW of power generation capacity before 2050.

With the increasing focus on the manufacturing sector, driven by ‘Make in India’ initiatives, rising input costs (energy), electricity prices coupled with stringent government regulations, and pressing need for uninterrupted power supply are expected to increase investments in establishing captive power plants. 

According to the Ministry of Power, the installed captive power generation capacity (above 1 MW capacity) associated with industry-owned plants is estimated to be 80 GW as of March 2021, compared to 78 GW as of March 2020. The installed captive power generation capacity in India is estimated to grow at the rate of 5-6% annually over the next 2 years, till March 2023.

In India, the MNRE has set a target of 175 GW of renewable power capacity by FY 22. According to the 2030 blueprint, India aims to have between 275 and 350 GW of electricity from renewable energy by FY 27. To align with the target, the government of India has been consistently promoting Biomass power and Bagasse Co-generation.

According to MNRE, India has achieved the 10 GW target of biomass power by 2022 with the present   total installed capacity of 10.17 GW in Biomass Power and Co-generation sector, as of August 2021.

The waste heat that is recovered from other industrial sources/ processes is commonly found to generate steam and electricity in Cement processing, Iron and Steel processing, Petroleum Refining and Chemical processing, etc. The total estimated energy generation potential from waste heat in India across various industrial sectors is around 5.0 to 7.5 GW, according to MNRE.

According to industry sources, the waste heat recovery potential in the Indian cement industry alone is close to 0.75 to 1.0 GW, indicating a huge opportunity for the adoption of the Waste Heat Recovery (WHR) system.

Residual waste is another source of input from the disposal of Municipal Solid Waste (MSW) and is treated with various Waste-to-Energy (WtE) technologies (such as incineration and gasification) for electricity generation. India has a total cumulative capacity of 291.34 MW of Waste-to-energy. During 2020-21, India added three waste-to-energy plants with a total capacity of 22.20 MW.

Regional Analysis

The countries Turkey and Indonesia in the Asia-Pacific region have a huge untapped potential for geothermal energy and are aggressively exploring geothermal resources. Turkey has raised its geothermal power generation to 3.1% with capacity additions of 37 MW in the first half of 2021.

In Northern America, the natural gas fired combined cycle (NGCC) power generation has grown steadily over the years. In 2018, NGCC surpassed the coal fired plants as the technology with the most electricity generating capacity. As of 2021, the installed capacity of NGCC power generation reached 269.8 GW.

In the European Union (EU), overall energy production from all waste (industrial waste, renewable and non-renewable municipal solid waste (MSW), non-renewable waste) represented about 2.4% of the total energy supply. With the EU Waste Shipment Regulation being amended, it is widely expected that the waste exports outside the EU will be hampered, boosting the raw material supply to the waste-to-energy plants.

Impact of geopolitics on Steam Turbine Market

Trade wars hit industries and businesses globally and the steam turbine industry is no exception.

According to the IMF World Economic Outlook published in April 2021, the global growth is projected at 6% in 2021, moderating to 4% in 2022. The projections for 2021 and 2022 are much stronger than October 2020 World Economic Outlook. The growth indicates the additional financial support in a few large economies, anticipated vaccine-powered recovery, and continued adaptation of economic activity to sombre mobility.

High uncertainty looms over this outlook, due to the probable third wave and evolution of financial conditions. The impact of the COVID-19 pandemic on the energy, automobile industries has already been profound.

Depending upon the path of the pandemic, capital availability, and financial conditions, utilities might postpone some of their generation investments, in turn affecting the steam turbines' market demand.

Recent Developments

• On 17 December 2021, The World Bank approved two loans worth USD 300 million for geothermal energy development in Turkey.
• In July 2021, Switzerland-based energy company MET Group has acquired a 100% stake in the COGEN Energia Espana, a major player in Spain's CHP industry. 
• In March 2021, GE Steam Power reported the successful testing of the first low-pressure rotor equipped with the largest ever made last stage blade with the length of 75 inches, to be deployed in the Hinkley Point C nuclear power plant under construction in the UK. The new design is expected to pave way for the manufacturing of more efficient turbines.
• On Feb 6th 2021, Oil and Natural Gas Corporation (ONGC) signed an MoU with the Ladakh union territory administration to build India’s first geothermal power plant.

Blackridge Research's Global Steam Turbine Market report provides insights into the current global and regional market demand scenario and its outlook. The study offers a detailed analysis of various factors instrumental in affecting the growth of the global steam turbine market. Also, the study comprehensively analyzes the steam turbine market by segmenting it based on geography, and by power rating range (less than 30 MW, 30 MW to 100 MW, and above 100 MW).

The report also addresses present and future market opportunities, market trends, developments, important commercial developments, regions, and segments poised for the fastest-growth, competitive landscape. Further, steam turbines market size, and demand forecast, growth rates, trade (imports and exports) will also be provided in the report.