Gas Turbine Market Size, Share & Trends Analysis Report By Capacity (≤200 MW, >200 MW), By Technology (Open, Combined Cycle), By End-use (Power & Utility, Industrial), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global gas turbine market size was valued at USD 20.38 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 6.8% from 2021 to 2028. A gas turbine is an engine, which heats a mixture of fuel and outside air at a very high temperature to generate mechanical energy through the spinning of the turbine blades. The mechanical energy further drives a generator, which produces electrical energy. These systems are primarily used for power generation. Operating a simple cycle turbine power plant for supplying electricity to the industry is much costlier than purchasing it from outside. Thus, mostly, combined cycle power plants are employed, which have better efficiency.

CHP plant is an example of a combined cycle power plant, which can be employed for electricity production as well as for obtaining mechanical drive. The market in the U.S. is anticipated to observe significant growth on account of rising government support for power generation technologies that aim to reduce carbon dioxide (CO2) emissions. According to the Energy Information Administration, natural gas was the largest source of electricity generation in the U.S. in 2019, occupying a 38% share in sources of the U.S. power generation. The major factors driving the shift from coal-based power generation to gas-based power generation are suitable economics & supporting policies for setting up gas-based power plants in the country. In addition, assured long-term fuel supply in the U.S. is also one of the factors supporting the market growth in the country. Gas turbines play an important role in reducing Greenhouse Gas (GHG) emissions. As compared to other combustion-based electricity generation applications, these are very proficient and also result in decreasing carbon emissions.

The execution of various climate change initiatives along with regulations to cut down GHG emissions is expected to lead to a surge in the demand for gas turbines over the forecast period. Lockdown impositions in major cities and economies have resulted in most of the industries around the world halting their production. This has further resulted in a reduction of oil & gas demand around the world. For instance, as per the U.S. Energy Information Administration, global petroleum and liquid fuels average consumption was reported 94.1 million barrels per day during the Q1 period of 2020, which was a decline by around 5.8 million barrels per day from the same period observed in 2019. In addition, power demand from industrial and commercial end-users has also seen a significant dip in recent times owing to the global pandemic.

Capacity Insights

The >200 MW capacity segment led the market in 2020 accounting for the highest revenue share of more than 67%. It is likely to be the fastest-growing segment as well over the forecast period. The product demand in this segment is primarily driven by the rising shift from coal to gas-based power plants in some of the major countries across the globe.

Moreover, the rise in power generation activities across the globe owing to the growing demand for electricity as a result of population growth and rapid urbanization is also boosting the product demand. Thus, the growth in the power generation sector along with an increased focus on generating electricity through sustainable energy resources is the major driver for gas turbines, especially for turbines with >200 MW capacity.

The smaller size of the turbine provides ease in maintenance and operation, which is a major driving factor for the ≤200 MW capacity segment. Smaller size results in the lower weight of the product, which makes it ideal for offshore locations where the power to weight ratio is an important parameter while deciding to establish a turbine unit. Small turbines are widely utilized by the oil & gas industry owing to their compatibility with operating and environmental conditions.

Technology Insights

The combined cycle technology segment accounted for the largest revenue share of over 78% in 2020 and is anticipated to retain its leading position growing at the fastest CAGR from 2021 to 2028. These products require lower fuel to produce the required energy output and also negate transmission & distribution losses. Combined cycle turbines are known to be highly efficient and facilitate system efficiencies in the range of 60 to 80%.

The conversion to combined cycle technology is being compelled by stricter regulations for coal plants, low gas prices, and the integration of renewable power. Combined Cycle Power Plant (CCPP) complements solar and wind power because they can start and stop quickly, and thus are proficient in offsetting the variations in renewable energy power.

Favorable government policies regarding the usage of clean fuels for electricity generation and the reduction of GHG emissions are expected to increase the demand for natural gas-based power plants. In addition, a decline in gas prices, as well as the discovery of shale gas reserves, is estimated to propel the market over the projected period.

End-use Insights

The power & utility segment accounted for the largest revenue share of over 85% in 2020 and will expand further at the fastest CAGR from 2021 to 2028. The rise in population and rapid urbanization across the globe are creating more demand for power generation, which, in turn, is driving the product application in the power & utility sector. The focus on developing an eco-friendly source of power generation is another major factor driving the segment growth.

The industrial segment includes heavy industries, specialty chemical manufacturing, glass & cement manufacturing, pharmaceutical, and sugar mills among others. Gas turbines are witnessing increased demand from the industrial sector owing to the presence of stringent emission norms and growth in industrial activities across the globe in the past few years. Low prices of natural gas also have a positive impact on the product demand in industrial applications.

Regional Insights

Asia Pacific emerged as the largest regional market and accounted for the maximum revenue share of over 31% in 2020. The regional market is led by China, Japan, Indonesia, Thailand, and India. Rapid urbanization along with rising population is driving the regional demand for electricity in the region. Moreover, the availability of low-cost raw materials and labor is attracting global players to expand their business operations in this region. These factors are projected to boost the regional market growth over the forecast period.

Led by the U.S., Mexico, and Canada, North America is projected to grow at a significant CAGR over the forecast period. The demand is primarily driven by the shale gas reserve and technological development in extraction and mining technology, which are consistently lowering the operational costs of gas extraction in the region. Furthermore, North America has witnessed large-scale commissioning of gas-based power.

Technological advancements in completion techniques, such as multistage hydraulic fracturing, and in drilling techniques, such as horizontal wellbores, have enabled oil & gas companies to produce shale gas on a commercial scale. Trends signify that the aforementioned technological developments and the production of shale gas on a commercial scale are projected to drive the regional gas turbine market in the forecast period.

Saudi Arabia is one of the major end users in the Middle East & Africa region due to a strong presence of gas turbine providers in the country, which are working on enhancing their market share in the country.

Key Companies & Market Share Insights

The market is consolidated due to the presence of a few major companies. Industry participants practice several strategic initiatives, such as joint ventures, mergers & acquisitions, partnerships, and new product offerings, to enhance their foothold in the global market. For instance, in June 2020, the consortium between Ansaldo Energia and Shanghai Electric Group signed a contract with Bangladesh Power Development Board Company named North-West Power Generation Company Ltd. Under this contract, the consortium is expected to design and construct a combined cycle power plant of 880 MW in Bangladesh, thereby enabling the companies to enhance their scale of operation. Some of the prominent players in the global gas turbine market include:

• General Electric

• Siemens Energy

• Mitsubishi Power, Ltd.

• Kawasaki Heavy Industries, Ltd.

• Ansaldo Energia

• Bharat Heavy Electricals Ltd.

• MAN Energy Solutions 

Gas Turbine Market Report Scope

Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global gas turbine market report on the basis of capacity, technology, end-use, and region:

• Capacity Outlook (Volume, MW; Revenue, USD Million, 2016 - 2028)

  • ≤200 MW

  • >200 MW

• Technology Outlook (Volume, MW; Revenue, USD Million, 2016 - 2028)

  • Open Cycle

  • Combined Cycle

• End-use Outlook (Volume, MW; Revenue, USD Million, 2016 - 2028)

  • Power & Utility

  • Industrial

• Regional Outlook (Volume, MW; Revenue, USD Million, 2016 - 2028)

  • North America

    • U.S.

  • Europe

    • Russia

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

  • Middle East & Africa

    • Saudi Arabia

    • Egypt