Gas Engines Market Size, Share & Trends Analysis Report By Fuel Type (Natural Gas, Special Gas), By Power Output (5-1MW, 1-2 MW, 2-5 MW, 5-15 MW, Above 15 MW), By Applications (Power Generation, Cogeneration, Mechanical Drive), By End-User Industry (Utilities, Marine, Oil and Gas, Manufacturing) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global gas engines market size was valued at USD 5.01 billion in 2022. It is projected to reach USD 6.91 billion by 2031, registering a CAGR of 4.1% over the forecast period (2023-31). Gas engines have some advantages over other types of engines, such as lower emissions, higher efficiency, and lower maintenance costs. Increasing demand for clean and efficient power generation technology, increased use of distributed power generation systems, and stricter emission regulations drive the gas engine market.

Internal combustion engines run on gaseous fuels, such as natural gas, biogas, landfill gas, or hydrogen. They are used for various applications, such as power generation, transportation, and industrial processes. Gas engines have some advantages over other types of engines, such as lower emissions, higher efficiency, and lower maintenance costs. The increasing need for power production technology that is both clean and efficient has led to a growing demand for gas engines. This is mostly due to their comparatively lower emissions, higher efficiency, and reduced maintenance costs compared to alternative engine types.

Gas engines can provide reliable and flexible power supply to remote and off-grid areas, as they can run on various types of gaseous fuels, such as natural gas, biogas, landfill gas, or hydrogen. They can comply with the environmental standards and reduce the power sector's carbon footprint, as they have lower greenhouse gas and particulate emissions than other fossil fuel-based engines. They are generally more powerful by horsepower than diesel engines and have a better price ratio to power.

Market Dynamics

Global gas engines market drivers

Rising demand for clean and efficient power generation technology

Gas engines have lower emissions, higher efficiency, and lower maintenance costs than other types of engines, such as diesel or steam engines. Gas engines can run on gaseous fuels, such as natural gas, biogas, landfill gas, or hydrogen, which are cleaner and more abundant than liquid or solid fuels. Gas engines can also provide reliable and flexible power supply to remote and off-grid areas where grid connection is not feasible or economical.

The need for more sustainable and effective power production technologies that can lessen the power sector's carbon footprint and environmental impact is growing along with the world's population and energy consumption. Gas engines can meet this need by offering lower greenhouse gas and particulate emissions than other fossil fuel-based engines, higher thermal efficiency, and lower fuel consumption. Gas engines can also comply with the stricter emission regulations implemented in various regions and countries to combat climate change and air pollution. Such factors drive gas engines market growth.

Global gas engines market restraints

Competition from alternative power generation technologies

One factor restricting the market growth of gas engines is the competition from alternative power generation technologies, such as renewables, nuclear, and hybrid systems. These technologies offer advantages over gas engines, such as lower environmental impact, energy security, and operational costs. Nuclear power is considered reliable and efficient, as it can provide continuous and stable power output with low fuel consumption.

Nuclear power also has lower carbon emissions than fossil fuels, although it poses some safety, waste management, and proliferation challenges. Therefore, the competition from alternative power generation technologies is restricting the market growth of gas engines, as these technologies can provide various benefits and advantages over gas engines in terms of environmental performance, energy security, and cost-effectiveness.

Global gas engines market opportunities

Increased innovation in the development of efficient gas engines

The heightened level of innovation observed in the advancement of efficient gas engines presents a potential avenue for growth within the gas engines market. This is due to the potential for the emergence of novel and enhanced products and services that can effectively cater to customer demands and expectations. This trend can generate competitive advantages and open up new markets for manufacturers and suppliers operating within the gas engine industry. Creating new and improved technologies that can enhance gas engines' performance, reliability, and cost-effectiveness. Advanced combustion modes are new ways of burning the fuel-air mixture in the engine cylinder to achieve higher efficiency, lower emissions, and better fuel flexibility.

Regional Analysis

Based on region, the global gas engines market analysis is conducted across North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia pacific dominates the global market

Asia-Pacific is the most significant global market shareholder and is predicted to expand substantially during the forecast period. One of the primary driving forces behind the gas engine market in the Asia-Pacific region is the region's robust economic growth and rapid urbanization. Over the past few decades, nations like China and India have seen unheard-of economic boom. This growth has led to a substantial increase in disposable income and a rising middle class with a growing appetite for personal mobility. The Asia-Pacific region has significantly invested in building and expanding its transportation infrastructure, including road networks and fuel distribution systems. This infrastructure development has further bolstered the gas engine market. In addition, energy security is a major concern for many countries in the Asia-Pacific region, given their reliance on imported oil and natural gas. Gas engines, particularly those running on compressed natural gas (CNG) or liquefied petroleum gas (LPG), offer a viable alternative to mitigate this dependence.

Additionally, many regional governments have been actively promoting the use of CNG and LPG as alternative fuels to reduce their reliance on oil imports. This policy-driven approach has led to the growth of the gas engine market, as consumers are incentivized to adopt vehicles that run on these cleaner-burning fuels. The development of domestic natural gas reserves further supports the use of gas engines, as it enhances energy security by reducing reliance on volatile global oil markets. Moreover, gas engines are well-suited for various vehicle types, from compact cars to SUVs and trucks. This versatility ensures that consumers have diverse gas-powered vehicles that meet their needs and preferences. Automakers in the Asia-Pacific region have invested heavily in research and development to make gas engines more efficient and environmentally friendly.

North America is anticipated to expand substantially over the forecast period. One of the primary reasons for the proliferation of gas engines in North America is their cost-effectiveness. Natural gas, the primary fuel for these engines, has historically been abundant and relatively inexpensive in the region. This affordability has made gas engines attractive for various applications, from electricity generation to commercial transportation. Moreover, their environmental benefits drive the shift towards gas engines. Unlike traditional gasoline or diesel engines, gas engines produce fewer greenhouse gas emissions, particularly carbon dioxide (CO2). This aligns with North America's increasing focus on environmental sustainability and reducing its carbon footprint. As governments and industries seek cleaner energy alternatives, gas engines have emerged as a viable solution for decreasing air pollution and mitigating climate change.

Technological advancements have also played a pivotal role in the growth of gas engines. These engines have become increasingly efficient and reliable over the years thanks to design, materials, and control systems innovations. Developing combined heat and power (CHP) systems, which utilize gas engines to simultaneously generate electricity and capture waste heat for heating or cooling, has further improved their overall efficiency and economic viability. Similarly, the shale gas revolution in North America has significantly boosted the availability of natural gas. The discovery and extraction of vast shale gas reserves, particularly in the United States, have led to a surplus of this fuel. This surplus has driven down natural gas prices and made it even more attractive as a fuel source for gas engines. The shale gas boom has ensured a stable natural gas supply and reduced the region's dependence on foreign energy sources.

Segmental Analysis

The global gas engines market share is segmented based on fuel type, application, power output, and end-user.

Based on fuel type, the global gas engine market is segmented into natural gas and special gas.

The natural gas segment dominates the global market and is expected to expand substantially during the forecast period. It is a gaseous mixture of hydrocarbons, mostly methane, with no smell. Spark-ignited internal combustion engines power the gasoline-powered automobiles. The engine runs in the same manner as an engine powered by gasoline. Natural gas is in reserve in a fuel tank or cylinder, usually found in the car's rear. The gas engine market will be driven by the rise in power demand and the major players' investments in low-emission and low-cost power generation. Natural gas prices are highly variable in the short term due to the introduction of gas trading and technological and physical limitations.

In addition, the government's regulation regarding the 2050 zero-carbon targets has stimulated growth in the gas engine industry, which has expanded the gas engine market. These benefits are what will propel the market's expansion. Since natural gas burns the cleanest and emits the fewest carbon emissions compared to other fuels like Biogas, producer gas, and sewage gas, it accounts for a large portion of the market. Particulate matter is also absent from natural gas, which lessens engine wear and tear.

Special gases usually refer to gases other than conventional fuels like natural gas, diesel, or gasoline. These special gases are often used in specific applications or industries due to their unique properties. Biogas is a renewable energy source in gas engines for power generation, especially in waste treatment facilities and farms. Through anaerobic digestion, Biogas is produced from organic materials such as sewage, agricultural waste, and landfills. It contains methane and carbon dioxide, with methane being the primary component.

Based on application type, the global gas engine market is divided into power generation, cogeneration, and mechanical.

The mechanical drive segment owns the largest gas engines market share and is expected to expand substantially during the forecast period. Prime movers are gas engines that directly power mechanical devices, including pumps, compressors, blowers, chillers, and other rotating machinery. The manufacturing and oil and gas industries both employ these engines. Gas engines are primarily responsible for powering the compressor in the oil and gas industry during gas extraction, processing, and distribution, particularly in LNG plants.

Gas engines can also power an oil well's irrigation and water injection pumps. Lean burn engines used for electricity generation cannot handle varying loads like gas engines used for prime moving applications can. The need for prime movers will rise as the industrial sector expands, fueling the need for gas engines over the forecast period.

Based on power output, the global gas engines market share is fragmented into 0.5-1MW, 1-2 MW, 2-5 MW, 5-15 MW, and Above 15 MW.

The above 15 MW segment is the highest contributor to the market and is expected to grow substantially over the forecast period. Due to their dependability and relative cleanliness, these engines are crucial in assisting major international economies in developing a more sustainable energy system. When deployed in island-style setups, these engines can complement large power plants and prevent blackouts. The marine industry is also using these engines more and more for propulsion. Strict marine laws limiting sulfur and other pollution emissions drive the global shipping fleet's utilization of gas engines larger than 15 MW. All of these elements are anticipated to support the expansion of the above 15 MW segment during the projection period, together with the availability of fuel sources based on renewable gas and an enhanced gas distribution network.

Gas engines in the 0.5-1 MW power range serve as workhorses for small-scale applications. These engines are characterized by compact size, efficiency, and versatility, making them indispensable in various sectors. One of their primary applications is serving as backup generators for commercial buildings. In a power outage, these engines swiftly kick into action, providing essential electricity to keep businesses running smoothly. Moreover, smaller industrial facilities often rely on 0.5-1 MW gas engines to meet their energy needs. These engines offer a reliable and cost-effective power source for manufacturing processes, ensuring uninterrupted production. Their ability to start quickly and respond to load changes makes them ideal for applications where power demand can vary.

Based on end-users, the global gas engine market can be bifurcated into utilities, marine, oil and gas, manufacturing, and others.

The utilities segment owns the highest market share and is expected to grow substantially over the forecast period. Gas engines are instrumental in helping utility companies achieve this mission. One of their primary roles is power generation, where gas engines efficiently convert natural gas or other fuels into electricity. These engines are often deployed in power plants, both large and small, to produce electricity for distribution through the grid. Gas engines also serve as essential backup power sources. In grid failures or peak demand situations, they can rapidly provide electricity to prevent disruptions. These backup generators are strategically located at critical infrastructure points, such as hospitals, data centers, and emergency services facilities, ensuring that vital operations continue without interruption.

The marine industry relies on gas engines for propulsion and onboard power generation in various vessels, including ships, ferries, and offshore platforms. Gas-powered engines offer several advantages in the maritime sector, including lower emissions and reduced fuel consumption compared to traditional diesel engines. In addition, gas engines are utilized for propulsion to generate the requisite thrust for efficient propulsion of ships on water. They are favored for their environmental benefits, especially in regions with strict emissions regulations. Gas engines offer quieter operation, essential for passenger ships and luxury yachts.

Recent Developments

• June 2023- A novel turbogenerator designed especially for the advanced air mobility (AAM) market will soon undergo rig testing by Rolls-Royce. The engine is a clean-sheet compact gas turbine engine.