Aeroderivative Gas Turbine Market Trends

Growth drivers

• Military and aviation revenue boosters: The military and aerospace fields are a growing opportunity for aeroderivative gas turbine companies. The versatility of aeroderivative gas turbines in these sectors, such as energy generation, propulsion, and auxiliary solutions, is contributing to the overall market growth. The increasing innovation and export activities in the aerospace and military space are increasing the installation of aeroderivative gas turbines. The International Trade Administration (ITA) states that the U.S. aerospace companies have a presence in over 200 global cities. The developments in new business partnerships and growing global presence are likely to offer growth opportunities for aeroderivative gas turbine manufacturers in the U.S.
• Greener fuels & chemical recycling innovation: The goal of the 2022 REPowerEU Strategy was to produce 10 million tons and import 10 million tons by 2030. About 10% of the EU's energy demands are expected to be met by renewable hydrogen by 2050, significantly lowering the carbon footprint of energy-intensive industrial operations and the transportation sector. The EU's energy transition, net-zero, and sustainable development strategies all heavily rely on hydrogen. These are the very innovations that comply with the EPA low-carbon fuel provisions and CO₂ limits. Low-emission fuel turbines, along with hydrogen co-firing, act as a real competitive advantage to be applied in wider industrial and grid-steering applications.
• Increasing applications in LNG plants: The rise in investments in the LNG infrastructure expansion is poised to open new avenues in the market for aeroderivative gas turbines. The clean energy trend is augmenting the consumption of natural gas and renewable fuels. This aspect is creating a profitable space for aeroderivative gas turbine manufacturers. For instance, the Institute for Energy Economics and Financial Analysis (IEEFA) projects that the global capacity for nameplate liquefaction may reach 666.5 MTPA by the end of 2028. According to the International Energy Agency's (IEA) stated policy scenario, the global LNG trade is expected to reach 482 MTPA in 2050. Asia Pacific and North America are anticipated to lead the LNG production and supply. According to IEEFA, 193 million metric tons per year (MTPA) of new supply capacity could be added by nameplate LNG liquefaction capacity from projects that have already started construction or that have been approved by financially viable backers between 2024 and 2028, representing a 40% increase in just five years.

1.Emerging LNG Supply Trade

Global LNG Supply Facilities in Operation,2020-2023

Source: IEEFA

2.Emerging Trade Dynamics of Aeroderivative Gas Turbine Market

Leading Exporters and Importers of Aeroderivative Gas Turbine Market in 2023

Source: OEC

Challenges

• High initial capital requirement: The upfront investment required for the production and installation of aeroderivative gas turbines is challenging their sales growth. The small scale and new companies often find it difficult to compete with leading giants due to limited budgets. This factor often limits the new product launches and hinders small players from accessing the latest opportunities. The high installation and maintenance costs also deter end users from investing in aeroderivative gas turbines. This competitive scenario is often observed in price-sensitive markets.
• Competition from decarbonization trend: The decreasing costs of renewables such as solar, wind, and battery storage are likely to challenge the sales of aeroderivative gas turbines. The decarbonization trend is estimated to register a clean energy shift globally. However, the innovations focused on the use of aeroderivative gas turbines in renewable sources are anticipated to increase the revenues of key market players. Also, the dominance of fossil fuels is projected to offer high revenue-earning opportunities to the manufacturers.