Gas Turbine Market Trends

Growth Drivers

• Increasing Demand and Supply of Gas- There was a 4 % increase in inland demand of natural gas in the EU in 2021 compared with 2020. Additionally, the EU's dependency on natural gas imports reached 82% in 2021. As demand for gas increases, more gas turbines are needed to generate the necessary electricity. At the same time, an increased supply of gas makes it more affordable, leading to more people using gas turbines for their energy needs.

• Surging Natural Gas-Based Electricity Generation- According to the United States Energy Information Administration, natural gas was the source of 38.3% of utility-scale electricity in 2021. The increasing availability of natural gas, combined with its affordability, has encouraged many countries to switch to natural gas-based electricity generation. This has caused an increase in demand for gas turbines, which are used in natural gas-based power generation.

• Increasing Preference for Gas-Fired Power Plants Over Nuclear-Based Power Plants- Nuclear plants require a large upfront investment and have associated operational risks, such as the potential for a nuclear meltdown which can cause significant environmental damage. Additionally, nuclear plants generate a high amount of carbon emissions which has increased the demand for gas-fired power plants as an alternative. Approximately 36.3 billion tonnes of carbon dioxide were emitted in 2021 due to energy-related activities, up 6% from 2021.

• An Increase in The Number of Power Plants Worldwide - The number of power plants reported worldwide is approximately 30,000 as of 2021, spread across 164 countries. As demand for electricity is increasing, more and more power plants are being built to meet the demand. The result is an increase in the need for gas turbines, which are the main source of power for these plants.

• Growing Aviation Industry - According to estimates, as of 2022, 745 million Americans were traveling by air. A total of USD 204 billion was generated by US airlines during the first three quarters of 2022. There were 140 million more passengers flying in 2022 than in 2021, an increase of 123%. With the growing demand for air travel, airlines are looking for more efficient ways to power their aircrafts. Gas turbines are becoming increasingly popular as they are lightweight and fuel efficient, making them a cost-effective solution for the aviation industry.

Challenges

• Rising environmental concerns regarding gas turbine usage - Gas turbines are a major source of air pollution, and governments are increasingly taking steps to reduce emissions from gas turbines. This is giving rise to stricter regulations and higher costs, which limit the growth of the gas turbine market.
• High initial investments
• Short life of gas turbines