The market for global power boilers and heat recovery steam generators (HRSGs) is expected to decline at a negative compound annual growth rate of -6.5% and -4.3% (reaching $10.7 billion and $2.7 billion) respectively, during the period 2018–2022, according to a report by GlobalData.
The drop in the market for thermal energy steam generators could be attributed to changes in energy policies at a national level, security risks of fuel supply and the immediate need to address climate change, the report by the data and analytics company found.
Push for steam generators
The push for steam generators is expected to come from markets such as China, India, Vietnam, Indonesia, Saudi Arabia and Russia; whose governments are seeking to diversify their power source mix and push for significant economic development.
The report reveals the market for global steam generators is projected to decline due to the growing influence of renewables and the lack of suitable infrastructure to support gas power generation.
The HRSGs market is expected to grow towards the end of the forecast period (2018–2022), as significant infrastructures are expected to be developed by nations across the world.
Demand for low emission sources
Further, gas is set to play an increasingly important role in the power sector, as the main source of generating low emission electricity and in providing backup flexibility for the intermittent power generation by renewables, the 216-page report found.
Concerns associated with the environmental impacts of coal used for power generation would significantly influence the growth of the power boilers market. With the need to address growing emissions, countries have moved towards phasing out inefficient coal plants and reducing the use of coal in favour of renewables and gas.
Other factors such as lack of domestic coal sources, supply risks and price volatility have pushed governments with a history of the great demand for coal, to favour the deployment of renewables and efficiency measures to satiate the growing demand for power.
Steam Generators for Thermal Power, Regions, Market Value ($ billion), 2017 and 2022
Source: GlobalData, 2018
GlobalData’s report found that in the forecast period, initiatives undertaken to address power sector emissions and reduce the exposure to market risks would significantly impact the power boilers market by the end of the forecast period.
Asia-Pacific in a leading position
The Asia-Pacific region is expected to drive the power boilers market in the forecast period, primarily in countries such as India, Vietnam and Indonesia, due to the establishment of development plans that would drive the need for new capacity to support the demand for electricity. The high-growth markets of India and Vietnam are expected to see a compound annual growth rate of 9.1% and 11.5% respectively over the forecast period.
China and India, a mixed picture
In 2017, China was the largest market for power boilers and accounted for 50.4% of the Asia-Pacific market, according to the report. The phasing out of coal plants and efforts to reduce coal consumption would see India become the largest market for power boilers by 2022. The shrinking Chinese market would result in the decline of the Asia-Pacific at a negative compound annual growth rate of -7% over the forecast period.
EMEA demand for power boilers in an upward trajectory
Comparatively, the modest Europe, the Middle East and Africa (EMEA) power boilers market with a 12.8% share of the global market value in 2017 is estimated to grow at a compound annual growth rate of 1.4% over the forecast period. Economic growth and recent diversification initiatives in Saudi Arabia, Egypt, Turkey and South Africa are expected to drive these markets, the report found.
The global HRSGs market was dominated by EMEA with a market value of $2.1 billion in 2017. The market was supported by large capacity additions in Egypt, Iraq, Russia and Saudi Arabia. Emerging markets within the region have made significant investments towards the development of low carbon power sectors, largely underpinned by gas.
The market is estimated to showcase the highest growth with a compound annual growth rate of 2.3% over the forecast period. However, the large market potential for gas power in the Asia-Pacific would propel the region, edging out EMEA to become the market leader for HRSGs in 2022.
Plans put in place by various countries supporting the increased use of gas to replace coal and reduce emissions from the power sector would result in the market registering the highest value of $1.07 billion in 2022, according to the GlobalData report.