Power Generation Market Definition
The power generation market consists of sales of electric power by entities (organizations, sole traders and partnerships) that operate electric power generation facilities. These facilities generate electric power using various forms of energy, such as fossil fuels, nuclear, solar, wind and water. The establishments in this industry produce electrical energy and provide electricity to electric power transmission and distribution systems.
Power Generation Market Size
The global power generation market reached a value of nearly $1,341.6 billion in 2018, having grown at a compound annual growth rate (CAGR) of 2.4% since 2014, and is expected to grow at a CAGR of 3.5% to nearly $1,537.5 billion by 2022.
Growth in the historic period resulted from increased consumption of electricity in both developed and developing countries, government initiatives for energy infrastructure, economic growth in emerging economies, and improvements in power generation technologies. Factors that negatively affected growth in the historic period were high transmission and distribution losses, geopolitical tensions and stringent environmental regulations on power generation.
Going forward, increasing use of electricity in transportation and growing global economy will drive growth. Factors that could hinder the growth of the power generation market in the future include rising interest rates, aging power generation infrastructure and environmental regulations.
Power Generation Market Drivers
The key driver of the power generation market include:
Government Initiatives For Energy Infrastructure - During the historic period, governments in both developed and developing countries were focusing on building and maintaining a robust energy infrastructure. This drove the demand for power generation systems. According to the International Energy Agency (IEA), in 2017, the global electricity industry attracted capital investments of $700 billion. As of 2017, Asia-Pacific was the leading region with $1.67 trillion worth of investments in pipeline power generation construction projects, followed by the Middle East and Africa with $1.16 trillion each. Pipeline power generation projects in Europe and the Americas were valued at $921 billion and $931 billion, respectively. Government investments in the power generation projects drove the growth of the power generation market.
Power Generation Market Restraints
The key restraints on the power generation market include:
Land Scarcity For Solar generation - Installing solar power production panels on large areas of land has been the general trend for solar power generation. This can lead to utilizing farmland or disturbing a healthy ecosystem. In land-scarce countries, particularly Southeast Asian countries such as Singapore, the widespread use of solar power generation systems is hindered by space constraints and limited roof space. Densely populated countries such as Japan, China and Southeast Asian nations are facing land scarcity for solar panel installations, and so are adopting floating solar models. As more installations of solar power generation units are carried out, land scarcity is expected to be a major restraint on the industry.
Power Generation Market Trends
Major trends influencing the power generation market include:
Advanced Ultra-Supercritical (AUSC) Technology - Thermal power generation companies are investing in Advanced Ultra-Supercritical (AUSC) pulverized coal technology to increase plant operating efficiencies and reduce carbon emissions. AUSC operates with temperatures in the range of about 700-750°C. This technology also operates with efficiency greater than 50% and significantly reduces carbon emissions at the source. Many government-owned and private power producers are investing in these technologies to enhance power plants’ efficiencies and reduce carbon emissions. In June 2017, the Indian government introduced a national mission on advanced ultra-supercritical technologies for cleaner coal utilization. The estimated carbon dioxide emission rate from coal-based power plants was about 40%. With the implementation of the AUSC technology, the government has expected to reduce greenhouse gas emissions by thermal power plants by 20%. , Furthermore, prominent companies in the market are also working towards providing AUSC solutions. For example, in 2016, GE introduced a first-in-market ‘steamH’, a technology that combines steam plant technology operating at advanced ultra-supercritical conditions with digital power plant software.
Hybrid Wind-Hydro Power Generation Systems - Companies in the power generation industry are using hybrid wind-hydro power generation systems to improve the electricity generation outputs. Hybrid wind-hydro power generation systems generate electricity by combining wind turbines and pumped storage. Using these systems, electric power from wind energy is generated around the clock and electric power from water movement is generated when the water that flows down from the reservoirs. When there is surplus energy, the additional water is pumped up to the reservoirs, acting as a large-scale battery. Due to the simultaneous work of wind turbines and hydro turbines, there is a continuous supply of electricity from the plant. In 2017, Max Boegl Wind AG and GE Renewable Energy collaborated on the first wind farm with an integrated hydropower plant project, which became operational in 2018.
Opportunities And Recommendations In The Power Generation Market
Opportunities – The top opportunities in the global power generation market will arise in the fossil fuel electric power generation segment, which will gain $157.6 billion of global annual sales by 2022. The power generation market size will gain the most in China at $92.44 billion. Market-trend-based strategies for the power generation market include investing in lithium-ion batteries to store solar energy, adopting digital technologies to optimize electricity production, deploying solar tracking mounts to increase efficiencies of solar panels, and implementing carbon capture technologies in power generation operations. Player-adopted strategies in the power generation industry include expanding businesses through strategic partnerships, increasing market shares through investing in strategic acquisitions, and expanding renewable energy generation businesses through acquisitions and mergers.
Recommendations – To take advantage of these opportunities, The Business Research Company recommends the power generation companies to focus on installing modular turbines in power plants, focus on setting up solar power production and power plants in deserts and ocean spaces, and to educate people on smart use of electricity.
Power Generation Market Segmentation
The power generation market is segmented by type of energy source, by end-user and by geography.
By Type Of Energy Source -
The power generation market can be segmented by type of energy source into
- a)Fossil Fuel Electric Power Generation
- b)Hydroelectric Power Generation
- c)Wind Electric Power Generation
- d)Solar Electric Power Generation
- e)Nuclear Electric Power Generation
- f)Biomass Electric Power Generation
- g)Other Electric Power Generation
- h)Geothermal Electric Power Generation
Fossil fuel electric power generation was the largest segment of the power generation market by type of energy source in 2018 at 70.8%. The solar electric power generation market is expected to be the fastest-growing segment going forward at a CAGR of 9.5%.
By Type End-User -
The power generation market can be segmented by type of end-user into
- a)Industrial
- b)Commercial
- c)Residential
Growth has accelerated in all the segments of the global power generation market segmented by end-user.
By Geography - The power generation market is segmented into
- o North America
- o Western Europe
- UK
- Germany
- France
- Spain
- Italy
- Netherlands
- Switzerland
- Belgium
- Sweden
- Denmark
- Ireland
- Austria
- Norway
- Portugal
- Finland
- o Asia Pacific
- China
- Japan
- India
- Australia
- South Korea
- Indonesia
- Hong Kong
- Thailand
- Philippines
- Singapore
- Malaysia
- New Zealand
- Vietnam
- o Eastern Europe
- Russia
- Poland
- Romania
- Czech Republic
- o South America
- Brazil
- Argentina
- Colombia
- Chile
- Venezuela
- Peru
- o Middle East
- Turkey
- Saudi Arabia
- Israel
- UAE
- o Africa
- Nigeria
- South Africa
- Egypt
Asia-Pacific was the largest market for power generation, accounting for 49.7% of the global market in 2018. It was followed by Western Europe, North America and then the other regions. Going forward, the fastest-growing regions in the power generation market will be Asia-Pacific and the Middle East, where growth will be at CAGRs of 4.9% and 4.8% respectively. These will be followed by Africa and Eastern Europe, where the markets are expected to grow at CAGRs of 4.7% and 2.0% respectively.
Power Generation Competitive Landscape
Major Competitors are:
- • EDF Group
- • Enel SpA
- • Engie S.A.
- • E.ON SE
- • Uniper SE
Other Competitors Include:
- • NextEra Energy
- • Duke Energy
- • Southern Company
- • Dominion Resources
- • Exelon
- • American Electric
- • Public Service Enterprise Group
- • ENMAX Corporation
- • TransAlta Corporation
- • Comision Federal de Electricidad
- • EON
- • RWE
- • Scottish Power
- • Centrica
- • SSE
- • Drax Power Limited
- • International Power/GDF SUEZ SA
- • Intergen
- • Électricité de France SA
- • Vattenfall AB
- • Fortum Oyj
- • Fennovoima Ltd
- • Areva
- • Horizon Nuclear Power
- • Enel
- • Power Grid Corporation of India Limited
- • NTPC Limited
- • Tata Power
- • Adani Power
- • NHPC Limited
- • China Datang Corporation
- • China Guodian Corporation
- • China Huaneng Group
- • Hokkaido Electric Power Company
- • Tohoku Electric Power Co
- • AGL Energy
- • PJSC Inter RAO UES
- • PJSC Unipro (JSC EON Russia, OGK-4)
- • PJSC Territorial Generating Company Number One (TGK-1)
- • PJSC Mosenergo (TGK-3)
- • Limited Liability Company Gazprom Energoholding
- • Companhia Hidro Elétrica do São Francisco
- • Copel Geração e Transmissão SA
- • Eletrobras Eletronorte
- • Petroleo Brasileiro SA Petrobras
- • Enel Generación Chile
- • AES Gener
- • Colbún SA
- • Empresas Públicas de Medellín ESP
- • Saudi Electricity Company
- • Dubai Electricity & Water Authority
- • Saudi Consolidated Electricity Company
- • Abu Dhabi Water and Electricity Authority (ADWEA)
- • Abu Dhabi National Energy Company PJSC (TAQA)
- • Israel Electric Corporation
- • Nuclear Power Production & Development Company of Iran (NPPD)
- • Nawah Energy
- • Amu Power Company
- • Zimbabwe Power Company
- • BioTherm Energy
- • Kenya Electricity Generating Company
- • Globeleq Inc
