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Global power generator industry transitioning to gas and renewables

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Energy Global,

The global power generator market, which was valued at US$9.6 billion in 2018, is forecasted to decline to US$8.7 billion in 2023 as the industry transitions from coal to gas and renewables, according to a report by IHS Markit Technology, now a part of Informa Tech.

"Renewable power sources are reducing the need for large and efficient high-power generators," said Wilmer Zhou, Senior Analyst, Manufacturing Technology, at IHS Markit Technology. "However, renewable power sources are not reliable for constant power generation. Because of this, they require flexible power sources with higher electricity output than peaking power plants to offset these fluctuations. This is spurring demand specifically for medium-power generators."

According to IHS Markit Technology, the reduction of coal-fired power capacity and the rising availability of renewable energy, natural gas is filling the gap. Gas is providing electrical grids with a combined heat and power (CHP) supply. It is also powering peaking units that are supplementing renewable development before energy storage becomes commercialised.

As a result, medium-power gas turbine generators are displacing baseload high-power generators. Medium-power devices are advantageous for such applications because they can start, stop and operate more efficiently at partial loads than high-power generators can. IHS Markit Technology estimates that the total market for medium power generators was worth more than US$3.3 million in 2018, with more than 52 000 units sold globally.

The report shows that medium-power generator market is expected to experience stable growth. Capital expenditures for these generators will remain on an upward trend until 2023, when investment is expected to shift back to oil and gas as well as to other industry sectors. Overall, the medium-power generator market revenue is forecasted to expand at a compound annual growth rate (CAGR) of 1.6% from 2018 to 2023.

In contrast, the global market for high-power generators totalled at around US$4.4 billion in 2018, with more than 710 units sold worldwide. The overall high-power generator market is forecast to decline from 2018 to 2023 at a CAGR of negative 7.6% in terms of revenues, decreasing to a value of US$3 billion by 2023. This decline is attributed to multiple factors, including the increase in distributed power and energy-storage systems, the prevalence of renewables, a reduction in demand for large coal-fired projects and new government legislation.

The global market for low-power generators is estimated to have been worth US$1.8 million in 2018 with nearly 987 million units shipped. Oversupply, lower capital expenditure investments and sluggish demand has led to a stagnant market. Nevertheless, IHS Markit Technology, states that the demand is forecasted to remain stable, driven by comprehensive downstream industries and applications.

The full IHS Markit Technology report can be accessed here.


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