In the power industry, a gas turbine converts the kinetic energy of gas into mechanical energy, which is then converted into electrical energy. The gas turbine is the backbone of the power generation industry. Although the fundamental operation of a gas turbine is relatively simple, its components must withstand high temperatures and operate with extremely precise tolerances. The turbine components are manufactured with highly specialized materials and techniques and must be meticulously maintained to preserve their efficiency and dependability. Multiple rotating turbine components necessitate continuous maintenance services.
Shift to Natural Gas as a Primary Energy Source Drives the Global Market
Recently, countries have transitioned from coal to natural gas as their primary energy source, increasing the demand for natural gas to produce cleaner energy. Numerous nations, including the United States, China, and the United Kingdom, switched from coal to natural gas to reduce emissions.
Natural gas's enormous availability and environmental benefits have increased its demand in the power generation sector. The conversion of coal-based power facilities to natural gas-based power generation is increasing, resulting in the use of gas turbines for power generation. This indicates that natural gas is anticipated to play a pivotal role. As a result, experiencing a substantial increase in demand would lead to an increase in power generation, thereby increasing the demand for MRO services for gas turbines.
Growth in Global Industrialization and Urbanization Creates Tremendous Opportunities
The substantial increase in global energy demand over the past few years has led to a rise in gas turbine power facilities investment, which is crucial for the market's overall expansion. Companies and administrators of power plants perform routine maintenance services such as periodic inspections, replacement of parts, diagnosis, and renovations to enhance operational performance and ensure the facility's long-term and stable operation.
Diverse power utilities and independent power producers enter long-term contracts for plant-related services. This is expected to stimulate market expansion. In June 2021, Mitsubishi Power, a division of the Mitsubishi Heavy Industries (MHI) Group, inked a 16-year long-term service agreement (LTSA) for the MRO services of 6 M701F gas turbines at the El Atf Power Station, Sidi Krir Power Station, and Cairo North GTCC facilities in Egypt. This will likely generate profitable market opportunities soon.
Asia-Pacific is the most significant global gas turbine MRO market in the power sector shareholder and is expected to expand substantially during the forecast period. The number of new gas turbine installations has increased exponentially in recent years. The amount of power produced from natural gas rose by almost 20 TWh between 2018 - 2019. Japan was one of the main importers of natural gas in 2021. Natural gas generated 20% of the nation's electricity. In addition, Japan maintains many gas-fired power plants that are routinely maintained to prevent blackouts.
In March 2022, the Japanese government announced that three gas-fired power plants with a combined capacity of 1,900 MW would be shut down for two months for routine maintenance. In March, the average temperature in Tokyo ascended to 21 degrees Celsius, reducing the demand for electric heating services. Thus, the reduction in power generation capacity will have a minimal effect on the nation's power consumption pattern. All of these variables contribute to regional market expansion.
North America is one of the main MRO services markets for gas turbines, with the United States, Canada, and Mexico accounting for the majority of demand. Increasing investments in new large gas-fired combined cycle power generation due to the region's rising electricity demand is amongst the key forces propelling this market. North America remains the largest market for financing and commercializing innovative technologies and has attracted many energy-focused technology firms. In addition, the US market is driven by replacing an aging fleet of coal-based power plants with gas-based power plants to lower greenhouse gas emissions. It is anticipated that the construction of new natural gas power plants and incorporated heat and power plants will hasten the growth of the gas turbine MRO services market in the United States.
The key global gas turbine MRO market in the power sector players are General Electric Company, Mitsubishi Heavy Industries, Doosan Heavy Industries and Constructions, Siemens AG, Goltens Worldwide Management Corporation, and others.