Gas Turbine Market Size, Share & Trends Analysis Report By Capacity (≤200 MW, >200 MW), By Technology (Open Cycle, Combined Cycle), By Application (Power Generation, Industrial, Aviation), And Segment Forecasts, 2018 - 2025

Industry Insights

The global gas turbine market size was valued at USD 19.81 billion in 2016 and is expected to register a CAGR of 4.8% over the forecast period. Increasing pressure from international agencies to reduce carbon footprint, along with low shale prices, is driving market growth. Regional governments offering incentives for natural gas-based electricity generation is a key trend benefitting the market.

Global electricity demand in the coming years is expected to increase by nearly one-third of the current demand. Major gas producing regions such as Middle East, U.S., and Russia are witnessing a major revamp in their electricity generation infrastructure to aggressively pursue gas-based power generation. Significant installations are also seen in Southeast Asia, Latin America, and Africa.

Turbines play an important role in reducing carbon emissions. In comparison with other combustion-based power generation applications, they exhibit lower emissions. With the implementation of various climate change initiatives as well as regulations to cut down GHG emissions, their potential is expected to increase in the upcoming years.

Asia Pacific is still a nascent market, but aggressive infrastructure development undertaken by governments is expected to give the market a significant boost. India is also increasing its focus on use of cleaner resources. China’s reliance on coal is expected to decrease over the coming years, along with its energy mix primarily favoring clean energy resources. This will further support regional market growth.

Capacity Insights

Gas turbines are primarily used for power generation and direct mechanical drive for production units and feed pumps. Operating a simple cycle turbine power plant for supplying electricity to industries is costlier than purchasing it from outside. Thus, combined cycle power plants are preferred as they are more efficient. A combined heat and power (CHP) plant is an example of combined cycle power plant, which can be employed for electricity production as well as to obtain mechanical drive.

After the financial crisis of 2008-2009, the industrial gas turbine market has bounced back strongly. On-site power generation facilities are projected to account for a majority of the demand in the coming years. Rising demand for these turbines is majorly driven by favorable policies in emerging countries, such as the combined heat and power support scheme implemented in Germany.

Although the use of gas turbines is encouraged owing to presence of pro-environmental policies, decentralized renewable sources are expected to pose a significant challenge for on-site applications. With high level of awareness regarding the advantages of these turbines, the market can be termed as a mature one, which is an indication that industry participants will probably focus on upgrading their product offerings based on efficiency.

The power generation segment was valued at USD 10.91 billion in 2016 and is expected to witness the highest growth during the forecast period. The industrial segment includes chemical, fertilizers, pulp and paper, oil and gas, metal, mining, and sugar industries, where weight and size are expected to be important factors.

Technology Insights

In 2016, combined cycle turbines contributed to over 50.0% of the industry revenue. In the forthcoming years, this technology segment is likely to witness the highest growth, at an estimated CAGR of 5.0%. These highly efficient turbines require marginal consumption of fuel to produce the desired output and significantly reduce distribution and transmission losses.

The global installed gas-fired generation capacity is predicted to rise from 1,285 GW in 2010 to 2,026 GW in 2030, with electricity generation rising from 4,444 TWh to 7,187 TWh over the same period. Natural gas prices have been showing a steady decline over the past two years following the global economic turndown and because of oversupply of LNG and unconventional gases.

Application Insights

For upstream oil operations, making use of locally available fuels to generate power is a key requirement as facilities are often situated in remote locations. Associated gas is mostly used as fuel for power generation; however, in some heavy oil fields, there is insufficient availability to fuel power plants

Heavy industries also generate significant demand. Gas turbines prove to be a cost-effective and efficient form of power distribution in plants. Installation in heavy industries is anticipated to reduce operational costs by over 35.0%. Demand in the power generation sector is anticipated to progress at a CAGR of 4.4% over the forecast period. However, key competitors are still skeptical regarding increasing demand in this segment.

Deregulation has altered the mix of the wider aviation industry; however, this is not the case within the commercial aircraft market. The industry is still heavily concentrated on three main companies: GE Aviation, Pratt & Whitney, and Rolls-Royce, coupled with a few joint venture partnerships that deal with specific engine programs.

Gas turbines are witnessing increased demand in the industrial sector with emission norms being strengthened by several nations. No recession is predicted in the next decade, thereby indicating rapid industrialization across the globe. Low natural gas prices also have a positive impact on demand in industrial applications.

Regional Insights

North America and Europe account for the largest share of power stations being decommissioned. This is because a majority of the power plants are in the second phase of their life cycle. In Europe, air pollution equipment of numerous plants that have not been upgraded were to be closed by 2015. Aging capacities and legislative initiatives created a potential replacement market.

MEA is expected to emerge as the second largest market in terms of orders and capacity additions. This region was valued at more than USD 5,000 million in 2016. Increasing demand can be attributed to rising preference toward gas-fired combined cycle plants in the regional oil and gas industry.

Central and South America is also a lucrative market for clean energy. Since 1990, Brazil has been actively encouraging cogeneration, which has resulted in over 1,200 MW of on-site gas-fired volume. Brazil, Peru, Chile, and Uruguay are the most prominent markets in the region.

Developments in clean energy projects within this region are creating strong growth potential for gas and steam turbines. Along with rising demand for electric power through clean energy sources, many countries in this region have vowed to decrease GHG emissions. These factors are expected to positively impact the market.

Gas Turbine Market Share Insights

According to CHP Association, industrial and manufacturing sectors in U.S. account for the largest share in terms of current installed CHP capacity and exhibit great potential for growth. They are used in several process industries such as petroleum refining, pulp and paper, and chemicals, where these systems operate with installed electricity capacities greater than 25 MW and steam generation rates measured in hundreds of thousands of pounds of steam per hour.

CHP is an ideal method for generating power and mechanical drive. It is also cost-effective and offers immense scope for growth of industrial steam as well as gas turbines. It also helps reduce carbon emissions by 30.0% as compared to any other conventional power generation method, such as boilers and power stations.

In January 2017, Siemens and Marubeni announced plans to build a 1,200 MW combined cycle power plant in Thailand. In 2015, the company sold approximately 18 models of SGT-800 industrial gas turbines to Thailand. Six of these turbines had a capacity of 53 MW each, while the capacity of the remaining twelve units was 50.5 MW each. The units were intended to be installed in nine combined cycle cogeneration power plants with a total installed electrical capacity of 1100 MW.

SGT-800 gas turbines are used in electronics and frozen food industries. As of 2016, Siemens accounted for approximately 65.0% of the total installed turbine capacity in Thailand. The company also received an order for four SGT-800 gas turbines and associated generators for the Shanxi Guoxin Baode and Xiyang decentralized energy projects in central China.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of latest industry trends in each of the sub-segments from 2014 to 2024. For the purpose of this study, Grand View Research has segmented the global gas turbine market report on the basis of capacity, technology, application, and region:

• Capacity Outlook (Volume, MW; Revenue, USD Million, 2014 - 2025)

  • ≤200 MW

  • >200 MW 

• Technology Outlook (Volume, MW; Revenue, USD Million, 2014 - 2025)

  • Open Cycle

  • Combined Cycle

• Application Outlook (Volume, MW; Revenue, USD Million, 2014 - 2025)

  • Power Generation

  • Industrial

  • Aviation

• Regional Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)

  • North America

    • U.S.

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Saudi Arabia