Coal and CCGT help support steam turbine market
The global trend towards the use of renewables is not denting the demand for older methods of power generation
Electricity supply industries worldwide are changing as concern over climate change increases and regulatory systems adapt to take account of climate concerns. However, the world market for power generation systems' hardiest equipment-large — scale steam turbines of over 120MW capacity — seems set to remain resilient over the medium term, industry officials and analysts say.
They attribute this strength to continued development of coal-fired generation in the Asia-Pacific region and to an expected rebound in orders for combined-cycle gas turbine (CCGT) power stations.
"Although there are drops in gas turbine orders, the market for steam turbines will remain significant, as turbines utilised exclusively in coal power plants account for a higher proportion of the total steam turbine market," say analysts at Global Data, a UK-based analytics firm. They forecast that steam turbines for coal-fired generation can be expected to account for 359.4GW of new installed capacity from 2019-25, only a 6pc drop from 382.3GW over the previous six years.
Within those totals, China and India are expected to account for much of the drop. In 2018, the two countries installed a total of 49.8GW of new steam turbine capacity, but that is expected to fall to a combined 35.1GW in 2022, according to Global Data. Larger typical sizes for steam turbines will reduce the actual number of turbines installed. In recent years, turbines of 660MW capacity and above have made up an increasing proportion of installations. In 2018, turbines accounted for 22pc of such installations globally, according to Forecast International, a US market research firm.
Despite many countries' steps to limit emissions by switching to renewable power generation or gas from solid fuels, "coal is not really as dead as everybody thought it was", says Stuart Slade, senior I&M gas turbines analyst at Forecast International. He points out that, while coal-fired generation capacity has been markedly reduced in Europe and the US, it has continued to increase in Asia, despite deep emissions concerns in the key Chinese and Indian markets.
This is partly because, unlike gas, coal is an abundant local resource and new coal plants can be brought online relatively quickly. In addition, steam-cycle plant, in which fuel is used to generate steam to power a turbine, is historically relatively simple to operate and very durable. The result is the concentration in Asia, where electricity demand is rising fast, of the steam turbine market for coal-fired plants. Global Data estimates that, worldwide, coal-fired power stations accounted for 78pc of the large steam turbine market during the 2012-18 period and will still account for 77pc of the market from 2019 through 2025.
Global steam turbine manufacturers will benefit from the continued development of coal-fired plants. Leading manufacturers General Electric (GE) from the US, Germany's Siemens and Japan's Mitsubishi Hitachi Power Systems dominate the market, but another dozen manufacturers compete with them, in particular in local projects with low or no international participation.
Coal demand remains
Market participants note that, in addition to coal's continued large market share in rapidly developing Asian markets, the steam turbines are an integral part of CCGT plants, in which the hot gas turbine exhaust gases are passed through a heat recovery steam generator (HRSG) to generate steam and additional power in a steam turbine. In a typical CCGT, the steam turbine accounts for around a third of the plant's generating capacity.
Power demand in leading gas-consuming countries, principally in Europe and the US, is largely being met by new, efficient CCGT capacity, whose carbon emissions are half that of coal. In Europe, this is the result of progressive shutdown of coal-fired facilities — and in Germany, nuclear plants — which has left markets increasingly penetrated by renewables, with a need for reliable baseload and quick-start generation.
According to Forecast International, Europe will account for 27.7pc of world CCGT-based steam turbine demand through to 2028, compared with the 22.25pc in the US, where continually increasing output of gas looking for a market is steadily driving older coal-fired facilities out of power generation. Asian markets, including Japan, account for only about 20.8pc of Forecast International's estimated CCGT-related demand.
In the CCGT sector, GE, Mitsubishi and Siemens dominate steam turbine supply, with a collective 79pc of the world market. GE alone has over 50pc, partly due to its 2015 acquisition of the power systems business Alstom. All three companies have suffered since 2014 as several factors combined to limit the market for new large-scale power generation.
Energy efficiency and the penetration of subsidised renewables on top of the long demand slump, following the financial crisis of 2008-09, "created a significant recession in the power industry in 2014" from which it has not yet recovered, says Forecast International's Slade. He adds that orders can be expected to pick up only after 2022. "Companies are now trying to make it through the bad times," he adds. GE and Siemens have made major reorganisations to their power divisions, while Mitsubishi merged its power unit with Hitachi's in 2014.
Conversions to CCGT
Many power producers have identified opportunities for steam turbine installations that lead to incremental improvements in single power stations' operations. Companies worldwide that in the 1980s and early 1990s had developed open-cycle gas turbine (OCGT) plants, which were seen as quick to develop in jurisdictions hungry for power, are now adding HRSGs and steam turbines to convert their stations to CCGT mode. In Cote D'Ivoire, for example, the Azito power station was converted to CCGT from OCGT configuration in 2015, thereby adding nearly 50pc of generation capacity to 400MW and increasing thermal efficiency.
22pc — turbines' global share in 2018
On a smaller scale, sellers of "aeroderivative" gas turbines often install them in single-cycle mode and then increase generation capacity by adding steam turbines as onsite power demand increases, before considering redevelopment as larger installations.
Away from traditional steam-cycle plants, some developers and analysts see a role for large steam turbines in integrated gasification combined-cycle (IGCC) developments. While seen as difficult to approve and implement by many, Forecast International's Slade says Asian power generators consider them as a means of limiting emissions from coal-fired power stations by converting coal into a low-calorific synthetic gas that can then be burned in a combined-cycle facility. Mitsubishi claims a 15pc reduction in CO2 emissions compared with a traditional steam-cycle plant for its IGCCs, as well as a 48pc energy efficiency, compared with roughly 35pc for a traditional coal plant.
In addition to the fossil-fuel sector, steam turbines are a key technology for the nuclear sector, where they have always been the key turbine technology. However, new nuclear facilities are expensive, and very slow to construct, particularly in OECD countries; and while many developing countries say they want to establish a nuclear sector, many proposed developments are more likely to be cancelled than ever realised.
While nearly all steam turbines installed to date are placed in fossil-fuelled plant, there are two growing niche applications in which they contribute to emissions-free energy facilities. The first is in concentrated solar power (CSP) facilities, in which solar power heats a transfer fluid to provide steam to power a turbine, generally of less than 100MW capacity. Such installations have been developed in southern Europe, north Africa, South Africa and the Middle East since the mid-2000s, and although the market is relatively limited it is growing.
The second is steam turbines' use in geothermal power plants, which are common in markets such as the US, Iceland, Italy and east Africa and which, unlike other renewable power generation units, can operate as a baseload plant. Global Data points out, however, that geothermal installations accounted for only 800MW in 2018, out of a total 92.5GW of steam turbine installations that year.