The global gas turbine MRO market in the power sector was valued at USD 26.79 billion in 2022. It is estimated to reach USD 35.4 billion by 2031, growing at a CAGR of 3.27% during the forecast period (2023–2031). The need for maintenance service of gas turbine MRO in the power sector's aging fleet of gas turbines is anticipated to be the primary factor driving the global gas turbine MRO market in the power sector. In addition, the increasing consumption of natural gas in the power sector, the shift from coal to gas-based power generation, and the increasing number of gas-fired power plant infrastructure are expected to drive market growth over the forecast period.
In the power sector, a gas turbine transforms the kinetic energy of gas into mechanical energy, which is ultimately converted into electrical power. The backbone of the power generation sector is the gas turbine. Although the fundamental operation of a gas turbine is quite straightforward, the components involved must withstand high temperatures and operate with extremely tight tolerances.
The turbine's components are made with highly specialized parts and manufacturing techniques, and they must be carefully maintained to maintain efficiency and dependability. Due to the turbine's multiple rotating components, it requires continuous maintenance services. Turbine blades are also prone to micro pitting, foreign object debris (FOD) damage, abrasive wear, surface corrosion, and fretting corrosion since they are constantly exposed to steam or gas. This necessitates periodic gas turbine maintenance, repair, and overhaul to efficiently operate turbines and power facilities.
|Market Size||USD 35.4 billion by 2031|
|Fastest Growing Market||Europe|
|Largest Market||Asia Pacific|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
In recent years, countries have shifted from coal to natural gas as their fundamental energy source, increasing the demand for natural gas for power generation to produce cleaner energy. Numerous nations, including the United States, China, and the United Kingdom, shifted from coal to natural gas to reduce emissions.
Natural gas's vast availability and environmental benefits have raised its demand in the power generation industry. The conversion of coal-based power facilities to natural gas-based power generation is on the rise, leading to an increase in the use of gas turbines in power generation. All of this indicates that natural gas is anticipated to play a pivotal role in the future and is consequently anticipated to experience a significant increase in demand, resulting in increased power generation, thereby boosting the demand for MRO services for gas turbines.
The International Energy Agency (IEA) reports that numerous gas-fired power stations today have been in business for at least twenty to fifty years. They require routine maintenance and repairs to keep these existing power plants in good running condition. An outdated gas turbine with 15-20 years of use and well over 100,000 to 200,000 run-hours offers the choice of upgrading the infrastructure immediately or making only basic maintenance investments that eventually lead to retirement.
Although gas turbines and plants are not commonly seen, plant owners should contemplate utilizing Maintenance, Repair, and Overhaul (MRO) services post-retirement. California, which imposed rolling blackouts amid an oppressive heatwave, will have kept its four aged natural gas facilities open for another ten years by the end of 2020. Hence, there is anticipated to be a significant increase in demand for gas turbine MRO services over the projection period due to the aging gas turbine fleet in the long-running operational gas power plants worldwide.
Globally, the renewable energy sector has grown rapidly over the years due to strong policy support and severe cost reductions. Governments in numerous nations are transitioning toward cleaner energy sources to lower the emission levels of conventional fuels. Energy-intensive industries have benefited from rapidly substituting conventional fuels for renewable energy sources. In addition, the economics of energy generation from renewable sources is anticipated to be comparable to conventional fuel-based energy generation. This phenomenon encourages users of turbomachinery to choose alternative energy. This is anticipated to reduce the number of turbomachinery installations that impede the market growth during the forecast period.
A rise in global industrialization and urbanization is anticipated to provide significant growth opportunities for energy gas turbine MRO market participants. The significant increase in global energy demand over the past few years has increased investment in gas turbine power facilities, which is important in the market's overall growth. Companies and power plant administrators perform routine maintenance services such as periodic inspections, replacement of parts, diagnosis, and renovations to improve operational performance and ensure the facility's long-term and stable operation.
Additionally, diverse power utilities and independent power producers engage in long-term agreement agreements for various plant-related services. This is anticipated to fuel market expansion. For instance, in June 2021, Mitsubishi Power, a subsidiary 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 El Atf Power Station, Sidi Krir Power Station, and Cairo North GTCC facilities in Egypt. This will likely generate lucrative market opportunities soon.
Based on region, the global gas turbine MRO market in the power sector is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
Asia-Pacific is the most significant global market in the power sector shareholder and is expected to expand substantially during the forecast period. The rapid expansion of the Asia-Pacific region is fueling the demand for electricity throughout the region. Consequently, the number of new gas turbine installations has increased exponentially in recent years. From 2018 to 2019, the electricity generation from natural gas increased by approximately 20 TWh. In 2021, Japan was one of the largest natural gas importers; 20% of the nation's electricity was generated by natural gas. Japan also operates numerous gas-fired power plants, routinely maintained to reduce the likelihood of blackouts. For instance, in March 2022, the Japanese government announced that three gas-fired power facilities with a combined power generation capacity of 1,900 MW would be shut down for two months for routine maintenance. In March, the average temperature in Tokyo rose to 21 degrees Celsius, reducing the demand for electric heating services, so the decrease in power generation capacity will have a limited impact on the country's power consumption pattern. All such factors contribute to regional market growth.
North America is one of the largest gas turbine MRO services markets, with the United States, Canada, and Mexico contributing most of the demand. Growing investments in new large gas-fired combined cycle power generation due to the region's rising electricity demand is one of the essential factors driving this market. In addition, North America remains the largest market for funding and commercializing innovative technologies and has already attracted many energy-focused technology companies. The US market is driven by the outdated fleet of coal-based power plants being replaced with gas-based power plants to cut greenhouse gas emissions. The expansion of the gas turbine MRO services market in the United States is projected to be accelerated by building new natural gas power plants and combined heat and power plants.
Additionally, as per the Energy Information Administration (EIA), approximately 59 GW of the presently operational coal-fired capacity in the United States will be retired by 2035. Increased cessation of coal-based power plants has paved the way for increased investments in gas-based power plants requiring extensive MRO services.
In Europe, the most significant transition in the electricity system over the past few years has been from coal-fired to natural gas-fired generation. Austria, Denmark, France, the United Kingdom, and five other countries in the region have announced or passed legislation to replace coal in their energy mix. However, the Balkans, Turkey, and the majority of Eastern European nations continue to invest in coal-fired power facilities. These developments fuel the demand for gas turbine MRO services in power plants. Even though renewables are among the least expensive energy sources by 2020, 13 European nations are still planning to construct new coal-fired power facilities. Turkey (37,569 MW), Poland (9,590 MW), and Bosnia-Herzegovina are the countries with the greatest proposed coal capacity additions (4,080 MW). The emphasis of these nations on coal-fired power plants is likely to inhibit market expansion.
The South American region is expected to see significant development following the inauguration of the new gas-powered power plants. This is mainly because Argentina and Venezuela have huge natural gas resources. This is anticipated to create opportunities for maintenance, repair, and overhaul services for gas turbines in the region soon. As of 2020, Argentina has more than ten operational gas-fired power facilities, with additional projects in various stages of installation and construction. For instance, in July 2021, Wartsila Oyj Abp announced that commercial operations had begun at Argentina's Central Térmica Manantiales Behr facility. Wartsila Oyj Abp was also awarded a 10-year long-term service contract to provide maintenance and operational services for the gas-fired power facility.
The global gas turbine MRO market in the power sector is segmented by service type and provider type.
Based on service type, the global market is bifurcated into maintenance, repair, and overhaul.
The maintenance segment dominates the global market over the forecast period. Companies and power plant operators must perform regular maintenance services, including periodic inspections, parts replacement, diagnosis, and renovations, to ensure that power equipment works in good condition. This improves operational performance and ensures the long-term and stable operation of the facility. The maintenance cycle starts with the pre-outage planning, continues through the outage, and ends with the post-outage assessment.
In addition, a large number of power utilities and independent power producers enter into long-term service agreements (LTSA) to meet their plant needs across a range of services, which include all aspects of support, such as fleet management, inventory management, maintenance, repair, and overhaul, and the provision of day-to-day technical support of gas-turbines. Such agreements help reduce the overall costs, thereby enhancing the capacity of gas turbines through higher-performance parts. This is expected to increase the demand for maintenance services.
A major overhaul service for each gas turbine will be performed for 48,000 firing hours. A major gas turbine overhaul service includes gas turbine disassembly, rotor removal, clearance measurements, initial positions, blade inspection and replacement, initial position and clearance measurements, an inspection of the main gearbox, inspection and cleaning of oil pumps, cleaning of fan motor set, and inspection and cleaning of the main gearbox and lube oil cooler. Further, according to the Energy Information Administration, the global capacity of natural gas-fired power plants is expected to increase from 1,839 GW in 2020 to around 2,414 GW in 2050. It will directly aid the gas turbine overhaul services market as the number of gas turbines increases due to the demand for clean energy through natural gas and aging power systems, which would require overhaul services.
Based on provider type, the global market is divided into OEMs, independent service providers, and in-house.
The independent service providers segment owns the highest market share. Independent service providers (ISPs) are key in keeping a gas turbine in top condition. Unlike the maintenance and operation services an original equipment manufacturer (OEM) provides, an ISP works across various models and brands, providing maintenance, service, and overhaul support for various gas turbines used in the power generation sector. Although OEMs always have a place in maintaining gas turbines, ISPs can help reduce costs and benefit plant operators where gas turbines are installed.
Furthermore, independent service providers offer field services for borescope inspections, planned and unplanned maintenance, unit troubleshooting, and generator support in the gas turbines. Independent service providers ensure that owners and operators of gas turbines receive high-quality, innovative, and cost-effective solutions tailored to their individual operational goals.
In-house gas turbine services refer to the MRO services performed within the power plant instead of relying on OEMs or Independent Service operators. The power plant operator uses its employees and time to perform services, like borescope inspections, planned and unplanned maintenance, unit troubleshooting, and generator support in the gas turbines. Thus offering gas turbine owners and operators more choice and flexibility to organize post-warranty operations and maintenance of gas turbines. The in-house service providers also offer much flexibility over the MRO services of a gas turbine, as the in-house service team ensures its 24/7 availability along with instant maintenance and overhaul services without lost time and workforce.