Industrial & Marine Turbine Analyst at Forecast International, a provider of market intelligence forecasting, proprietary research, and consulting services for the Aerospace, Defense and Power Systems industries.

Carter Palmer

The gas turbine market, in terms of producing electricity, is returning to its pre-Covid levels, and the market will remain stable for the near-to-mid-term future. These levels of production will be driven by gas turbine replacements and the implementation of new facilities to cover increasing power demands worldwide. Projected energy demand for natural gas usage and in turn gas turbines will be a key driver of production moving forward. Other forms of power production, such as coal, will lose ground to gas turbines and renewables. 

If there is one factor that has changed the technology of power generation more than any other it is the shift away from coal as a fuel source and the rise of natural gas. This shift is the result of three converging influences: The first is a general concern over pollution and the drive toward environmental responsibility. This has been given added impetus in recent years by concerns over CO

 emissions and their reported effects on climate. However, the turn against coal predates climate-change issues and owes much to the use of lignite as a power station fuel. Lignite—also known as brown coal or its German equivalent, 

—is laden with impurities and contaminated with materials that give rise to toxic byproducts, including the notorious “acid rain.”

Figure 1: Gas Turbine Electrical Power Generation - Value Statistics 2023-2032 Forecast

The polluting character of coal-fired power generation has led to a concerted drive to get rid of it. In Western Europe, and the United Kingdom in particular, coal-fired power plants are under sentence of death, and dates for their closure have been imposed. In the United Kingdom, coal-fired power has now been phased out from energy production. In contrast, combined-cycle gas turbines account for roughly 52%, and nuclear power 23%, of energy production. This pattern is being repeated across the rest of Europe and into North America. However, coal remains a favored choice for power generation in countries like China and much of Eastern Europe because of those countries’ huge coal reserves and less stringent environmental policies. Even lignite remains in use despite the environmental damage it causes.

Gas turbines are therefore here to stay but are not the only source of power. Although relatively clean when compared to fossil fuel-driven energy production, gas turbines are not as green as wind, solar, and other renewables. Renewable energy plants are notoriously fickle when it comes to output. A heavily clouded, sunless day can drastically reduce power output from solar panels, and a calm windless day can have the same effect on power from wind farms. In theory, at least, there is a marked need to provide additional conventional power-generating capacity to act as a gap filler. The introduction of hydrogen into gas turbines will make them cleaner; however, there are issues such as transportation of the gas and modification of turbomachinery that must be solved before hydrogen’s widespread use. Manufacturers are currently working with their gas turbine products to burn hydrogen; however, mixtures of natural gas and hydrogen will likely be the norm before gas turbines regularly burn 100% hydrogen.

Figure 2: Gas Turbine Electrical Power Generation - Unit Production 2023-2032 Forecast

GE Gas Power, Siemens Energy, Mitsubishi Power, and Ansaldo Energia are forecasted as the top four turbine manufacturers over the next 10 years. Due to the war in Ukraine, both the Russian UEC Perm and UEC Saturn and Ukraine’s Zorya Mashproekt will lose market share as production levels have likely been negatively affected. Recent analysis of UEC Saturn and UEC Perm’s websites suggest that Russia is currently prioritizing service over production. The capacity in Russia is there, so maintenance in their current situation makes more sense than replacing gas turbines for more efficient units. Ukraine is likely in a similar situation.

GE Gas Power, Siemens Energy, Mitsubishi Power, and Ansaldo Energia are forecasted as the top four turbine manufacturers over the next 10 years.

Forecast International is forecasting that the lion’s share of gas turbines sold over the next 10 years will be turbines in the 250-500 MW range for power generation. This conclusion is based on historical sales and the popularity of machines in this class. Turbines of higher output and lower MW still have their place depending on the needs of the end user. 

Microturbines also have their niche and are forecasted for slight growth over the next 10 years. Capstone will continue to dominate the market with FlexEnergy following.

The COVID-19 pandemic hurt the market, but with sales recovering, the 10-year forecast should experience minimal growth in terms of unit production and remain largely flat barring any unforeseen circumstances.

Figure 3. Microturbine Electrical Power Generation - Value Statistics 2023-2032 Forecast

Figure 4. Gas Turbine Electrical Power Generation - Additional Projected Installed Capacity % Market Share by Power Class (in Megawatts) 2023-2032

Carter Palmer is an Industrial & Marine Turbine Analyst at Forecast International, a provider of market intelligence forecasting, proprietary research, and consulting services for the aerospace, defense, and power systems industries. Forecast's Platinum 4.4 information and analysis service was used to compile this report. For more information, visit 

Articles

There is a positive sales projection for gas turbines over the next decade.

Worldwide Gas Turbine Forecast 2024

The gas turbine power generation market is on the way to some normalcy after a decline in the mid-2010s and the COVID-19 pandemic. With recovery in prospect, the shift to greener machines is underway with the major turbine players announcing increasing amounts of hydrogen to power their turbines. Siemens Energy, General Electric, and Mitsubishi, in particular, are developing burners to adapt to a natural gas and hydrogen mix or even pure hydrogen. With that said, gas turbines will be needed moving forward to augment renewables, especially in North America and Western Europe. Gas turbines will continue to see advances in efficiency and will remain attractive options for power production.


This Forecast International market analysis of gas turbine-powered electrical generation projects that sales over the period 2022-2031 will total $117.087 billion. This is indicative of a recovery in the gas turbine electrical power generation market. The recovery from the mid-2010s was somewhat thwarted in 2020 by the COVID-19 pandemic. As COVID-19 hampered all activity for a time, the pandemic should be seen as a blip in terms of turbine production and not a lasting effect.

Gas turbines are expected to generate about $10 billion in sales in 2022. This is forecast to climb gradually to more than $12 billion by 2031.

Hydrogen’s entry into the market should not be understated, and is becoming an attractive option as a fuel for gas turbines. Green, blue, or gray hydrogen can be used to power turbines. Green hydrogen especially can be produced in a carbon-neutral manner. When a turbine burns pure hydrogen, it emits no particulate or carbon monoxide emissions. This means the machine can be a renewable supplier of energy if the infrastructure is there to transport the gas.

Either electrolysis for onsite hydrogen or pipelines are needed to make hydrogen a reality in running gas turbines. According to some sources, a natural gas pipeline can transport a mix of up to 15% hydrogen with little modification. Higher mixtures would need adaptation. Over the mid and long-term, the industry will be dominated by large combined-cycle facilities in the industrialized nations, notably Japan and countries in Europe and Asia.

The number of gas turbines produced will increase steadily between 2022 and 2030. This is the first time in a great many years that the industry has been forecast to experience steady expansion.

The 250-500 MW and 500-750 MW turbine classes dominate the industry in terms of dollar value. If anything, this trend will strengthen as the decade progresses.

A major impact in the U.S. and Western Europe has been the emphasis on conserving energy and adopting energy efficient alternatives to existing equipment. For example, consumers have been urged to switch from the old-style incandescent lightbulbs to compact fluorescent lightbulbs (CFLs) and to LED bulbs. The cost savings are significant for the homeowner. In addition, it smooths out the spike in demand that takes place when people come home from work.

Changing user consumption profiles is a worldwide phenomenon, although the motivation may differ from region to region. In Europe and America, the primary driver is to reduce electricity demand and thus reduce pollution and eliminate potentially harmful emissions. In other areas, the economic benefits of new, power-efficient technologies are the leading driver, placing electrical equipment within the reach of people who otherwise could not afford to run it. This will work to increase popular demand for available and reliable power supplies. Thus, the same basic consumer trends that will depress demand for additional generating capacity in some regions will increase it in others.

GE Energy is predicted to remain top in terms of market share in overall gas turbine revenue over the next ten years. It represents 38% of the pie, followed by 25% for Siemens Energy, Mitsubishi Power with 18%, and Ansaldo Energia with 5%. Together, these 5 companies will account for more than 80% of gas turbine revenue between now and 2031.

Europe, Asia, and North America are now roughly equal in terms of their percentage of the value they represent in international gas turbine sales.

 The impact of improved distribution and control networks is continuing to blur the distinction between baseload capacity and the rest. Only nuclear-powered generation is unequivocally considered baseload due to its long run times at steady-state load. In contrast, fossil-fuel plants are experiencing a different pattern of operation that exhibits frequent starts, load-following, and shutdowns to meet seasonal demands. As quick-reacting gas turbines replace steam machines, this trend is likely to continue.

However, it is well understood that the majority of breakdowns happen when a plant is either started up or shut down. This evolving operational profile is likely to increase the frequency of outages and the cost of procuring replacement parts. In parallel, sales of G-,H-, and J-class machines are increasing as utilities place more importance on efficiency and vendors accumulate operational experience with new designs.

Germany, France, and other countries are moving away from nuclear and focusing on renewables. Existing natural gas capacity will likely not be augmented, but will probably not be shut down. There are currently plants sitting idle but some may be brought back online. However, Russia supplied a majority of Europe’s gas. With the ongoing war, supplies of natural gas cannot be taken for granted. Norway can pick up some of the slack and run at increased output until 2030. It remains to be seen how the natural gas situation develops in Europe.

Electricity generation is rising in Eastern Europe, including Romania, Poland, Slovenia, Bulgaria, and Czech Republic. Aging coal plants are being replaced with combined-cycle natural gas plants. Renewables are not as prevalent in comparison to Western Europe; however, combined cycle plants will likely lay groundwork for more renewables.

 Southeast Asia’s energy demand is projected to grow by 80% by 2040 as the regional economy triples in size and population rises by almost a quarter to 760 million. As a result, it is likely that oil demand will rise from 4.7 million barrels per day in 2024 to 6.8 million b/d in 2040. At the same time, natural gas use will grow by almost two-thirds to around 265 billion cubic meters. In sharp contrast to other regions, coal demand will greatly expand and overtake oil to become the largest fuel. Renewables will make inroads but should decline from 26% of the fuel mix to 21%. The share of fossil fuels will rise to 78% by 2040.

India and China are the two most populous countries in the world by a wide margin. Both are short on electrical power. The generation capacity is inefficient and a major cause of pollution, while grids are incomplete and lack proper coordination and administration. As in Eastern Europe, coal plants will be replaced by natural gas.

In summary, Forecast International predicts that the importance of gas turbines will not diminish over time. More efficient machines will continue to be produced and hydrogen will play more of a role, although how big of a role remains to be seen. ■

Carter Palmer is an Industrial & Marine Turbine Analyst at Forecast International, a provider of market intelligence forecasting, proprietary research, and consulting services for the Aerospace, Defense, and Power Systems industries. Forecast's Platinum 4.4 information and analysis service was used to compile this report. For more information, visit www.forecastinternational.com

POSITIVE SALES PROJECTION FOR THE NEXT DECADE

GAS TURBINE FORECAST 2023

This Forecast International market analysis of gas turbine-powered electrical generation projects that sales over the period 2021-2030 will total $107.705 billion. The prospect of recovery is convincing; however, 2021 might be stagnant with a similar outlook to 2020 due to the lingering COVID-19 pandemic. The dominant response has been to keep most workers home and severely restricted the movements of the rest. Depending on the geographical region, it remains to be seen if further lockdowns will be implemented. 

Yet despite COVID-19, it will be a short-term impact only and is already being quickly absorbed. Some countries will differ in their recovery. Therefore, production in Europe, Asia and the Americas might differ slightly. But a medium-term recovery is projected. 

In the power generation sector, the initial result was a significant decline, estimated at between 19 and 21% in energy demand as industrial facilities shut down. These developments have led the U.S. Energy Information Administration (EIA) to project that a total of 4.9 GW of previously planned capacity expansions will be delayed into at least 2021 or 2022. Natural gas consumption in the United States decreased in 2020 with some recovery likely in 2021.

Still, it is apparent from both the EIA analysis and our own data (which largely supports the EIA assessment) that the impact of COVID-19 on the power generation equipment industry is surprisingly limited at this time. It is mostly expressed as a delay of projects rather than a dramatic reduction in demand. It is a shallow, short-term dip in the recovery from the much more severe recession that has afflicted the industry since 2014. This situation may change if there are additional waves of the pandemic.

The extent of the market collapse over the last six years is remarkable. The estimated size of the market in this year’s market overview is just 48% of the figure recorded in 2014. When Larry Culp became CEO of GE in October 2018, he quoted a similar figure as part of the reason GE had suffered so severely during this period. Siemens’ assessment in 2018 estimated falling sales and industry production overcapacity to be in the same general ballpark.

This sharp fall is a direct result of the spreading crisis caused by overcapacity in the power generation equipment sector and the resulting softness of prices. In short, companies are selling significantly fewer power generation gas turbines than they had predicted and receiving a lower unit price for each sale. 

As a direct outcome, all three of the leading companies in the power generation equipment sector – GE, Siemens, and Mitsubishi Power – undertook restructurings to reduce costs and rationalize production. In an inevitable result, these companies announced redundancies. Yet these measures proved of only limited effect; a more fundamental reorganization of the sector appears to be taking place. 

General Electric has adopted a different strategy with its former Baker Hughes subsidiary. GE has divested itself from the oil & gas industry whereby Baker Hughes currently supplies gas turbines for compressor drive and power generation for that market. This is evident in that the relatively new LM9000 is marketed solely by Baker Hughes. 

The former Mitsubishi Hitachi Power Systems (MHPS) was subject to a different process. It was apparent for some years that the formation of the Mitsubishi-Hitachi joint venture had generated neither the business opportunities nor the technology benefits expected. In addition, the two companies were heading in different directions, with the opportunities for synergistic growth declining quickly. Representatives of Mitsubishi Heavy Industries (MHI) interviewed at trade shows made little effort to hide their disillusionment. In the early months of 2020, MHPS ceased to exist, to be renamed Mitsubishi Power. This has been consolidated further in 2021 into the fold of MHI.

Similarly, Siemens spun off all of gas turbines into Siemens Energy. However, GASTURBINES Like dollar value, unit production of gas turbines worldwide is beginning a slow recovery. But by 2024, sales will have jumped significantly from today’s level. This is projected to peak around 2027 and remain flat at a higher level for the remainder of the decade. unlike GE, the turbines offered seem to cover both the Power Generation and oil & gas industries as mechanical drive machines are still offered.

Often overlooked within the gas turbine market are the Eurasian countries of Ukraine and Russia. In regard to power generation, this is often attributed to a limited area of sale. Currently, Russia generally sells to Russia with Ukraine selling to slightly more customers. Licensed production usually takes the place of physically sending turbines to international operators. There is little information available from United Engine Corp. of Russia and Zorya-Mashproekt of Ukraine. But it seems that within both countries, maintaining machinery with some limited production in the power generation field is the current state of affairs. 

From a global perspective, the impact of reduced demand, overcapacity, and soft prices will slowly work itself out of the market. A recovery will take place. Natural gas and renewables will continue to gain ground over the next ten years thus securing the gas turbine’s place in the power market. COVID-19 means this recovery will be later than originally projected, but it will be slightly stronger as delayed projects finally get underway. Once the middle- and far-term periods are reached, the industry will be dominated by large combined-cycle facilities in the industrialized nations, notably Japan and countries in Europe and Asia.

The recovery of gas turbine sales from the current slump will begin slowly and could take another year or two to really become evident. But by 2024, a resurgence in the market will be clearly evident, continuing for the rest of the decade.

Like dollar value, unit production of gas turbines worldwide is beginning a slow recovery. But by 2024, sales will have jumped significantly from today’s level. This is projected to peak around 2027 and remain flat at a higher level for the remainder of the decade.

In the period 2021 to 2030, Forecast International is projecting a worldwide unit production of 8,446 microturbine electrical power generation units, a significant increase over earlier projections of about 3,800 units. Value of production is projected to be $779 million. 

Reference to 2017 is important, as that was a pivotal year in the microturbine market. The increase in unit production and the decrease in average unit price are attributable to new, very small microturbines currently coming to market. Although they do not add much to the 2021-2030 overall value estimates, their production numbers are significant. 

Microturbines have generally grown in power output over the years, and that still holds true. When they started to become a significant market factor in 1999, the average unit on sale had a power output of about 35 kW. Ten years later, this had increased to approximately 100 kW, and it is now approaching 150 kW. There is even a 400 kW stand-alone machine; however, it is not in mass production. There is no indication that the trend of power increases is slowing. There are, however, microturbines going in the other direction. 

A trend is developing in Europe toward very small turbine applications. There was a time when microturbines were too powerful for a private residence. But times are slowly changing. MTT’s EnerTwin produces 3.2 kW of electricity and 15.6 kW of thermal power. This puts the machine in a prime position to be utilized in smaller buildings. These new turbines change the forecast significantly. Between 2017’s projection and this current analysis, unit production increases significantly, average unit value decreases significantly, and the total value for the forecast period remains nearly the same.

These new small machines from the likes of MTT and Bladon might change the landscape somewhat, but previous trends still hold true: microturbines have become more powerful, more fuel options are becoming available, and Capstone is still the market leader in terms of value. 

Today, microturbines are primarily used for remote power applications in the oil and gas industry and for cooling, heating, and power (CHP) and combined CHP (CCHP) applications in the commercial, industrial, and residential high-rise markets. The success of Bladon’s 12 kW machine would add power in remote locations to the list. An increasing energy demand-supply gap, a rise in the adoption of low-emission power generation sources, and the need to generate power cost-efficiently are some of the factors that will hold microturbines’ place in the market globally. 

Microturbine revenue is relatively flat, but total units produced has been expanding.

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The gas turbine sales forecast for the coming decade. 