Siemens AG and Alstom SA, the world’s biggest coal-fired power plant maker, could struggle to increase power generation equipment orders in Europe where there is “massive overcapacity”, according to industry analysts.
The power generation sector in Europe could remain at more than 50% compared to 2008 levels for about five years, analysts quoted by Bloomberg have said.
A report on utilities by Exane BNP Paribas states that wholesale power markets could continue to experience overcapacity up to 2015.
Overcapacity will persist in the UK and Italy until 2015, in France, Germany, Belgium and the Netherlands until 2016 and in Spain until 2017, according to the BNP Paribas report.
The global power division of Alstom reported a 32% drop in power orders to €3bn ($4.3bn) in the first quarter of this financial year.
In the third quarter Siemens experienced a 17% hike in new global orders for its fossil power production division.