Over 100 GWe of reciprocating engines, gas turbines, and fuel cells are installed per year [average of 2013-2016] for stationary power applications (including both centralized and decentralized applications). Of this, research by Delta Energy & Environment’s Distributed Power team shows that the market for gas-based decentralized power generation could see significant growth to 2020, predominantly in engines. This is set against a backdrop of more widely available natural gas supplies due to the growth of unconventional natural gas production, as well as the expansion of land and seaborne gas networks.
Table 1: Global 50 kW-200 MW (stationary) power generation market
The table below does not include technology units <50kWe or >200MW, nor portable power generation units
* Note: Dual fuel systems can typically switch from gaseous to liquid fuels and vice versa [i.e., can run on natural gas, LPG, diesel, biofuel or fuel oil].
Based on Table 2 (below), we can see that reciprocating engines and gas turbines have similar annual installed capacity trends, 40-60 GWe per year, but reciprocating engines enjoy far greater numbers in terms of unit sales. The fuel cell market is still small in comparison, roughly around 100 MWe per year. For reciprocating engines, diesel is the dominant fuel, especially at the <5 MWe size bands, whereas for gas turbines, natural gas is already the dominant fuel. Despite forecast growth, it is very unlikely though that natural gas-based engines will overtake diesel-based engines by 2020 in terms of annual installed capacity.
Table 2: Global 50 kW-200 MW (stationary) power generation market
Below we highlight some of the key players in the power generation market (not an exhaustive list). It is clear to see that most major OEMs have a wide product portfolio (e.g., General Electric, GE, has a range of reciprocating engines and turbines which can operate on gaseous, solid, and liquid fuels). Some OEMs also take on CHP packaging (offering containerized units) and operations & maintenance (O&M) contracts (e.g., Cummins). Others leave distribution and CHP package provision to specialist CHP packagers. Capstone enjoys a monopoly of the microturbine market.
Kohler Co has just last week acquired Clarke Energy. In a press release, David Kohler, President and CEO of Kohler Co, said: ‘We’re excited about this acquisition because it adds the distribution of large gaseous generators – viewed as a clean power source – to our product portfolio. We believe Clarke Energy’s prime and continuous gaseous solutions are an ideal complement to our existing diesel generator offering for standby applications.’
Figure 1: Key market players offering power generation solutions
Note: Order of company logos are not indicative of market share. List of players are not exhaustive.
Delta-ee asked key market players why they thought a gas-based product portfolio was increasing in significance – and here’s what they said:
“In general, gas as a source for power generation fuel will increase due to its competitive pricing and for being less polluting compared to other fossil fuels like oil based liquids and especially coal. Flexible and high-efficiency gas engines will see demand growth due to increasing need for dynamic grid stability and peak load services to support intermittent renewable power generation.”
— Development Manager, Wärtsilä
“I expect the gas market to grow strongly globally and gas engines to overtake small gas turbines and take a large share of the market of medium size gas turbines if the application is mainly power generation. For example – we supply generators to steam, gas, hydro turbines, diesel, gas engines. The most active at the moment are  gas engines,  hydro (particular small),  steam turbines for waste to energy or biomass, and  diesel engines.
New industrial sized gas turbine projects are reduced to those projects where process steam is required on a temperature that a gas engine cannot deliver, i.e. in paper factories, tyre factories or other process industries. If we take a look at the second-hand market, the market for gas turbines has grown tremendously on the supply side but nobody is buying. Conversely, second hand engines are shipped and sold all over the world.”
— Managing Director, TD Power Systems Europe GmbH
Some players noted that “the growth in power demands across Asia, Africa and other key regions supports the need for affordable distributed generation, especially to curb power supply shortages” and that “this can be in the form of diesel or gas gensets.” But it’s not only traditional applications; smarter applications will also increase in frequency.
“Reciprocating engine-based power generation will play an increasing role in the future within integrated solutions. For example, CHP units with high overall efficiencies in virtual power plant mode to deliver control reserve for wind and solar-powered plants.”
— Director Business Development – Powergen, MTU Onsite Energy GmbH
There are few easily accessible or public domain data and statistics that cover international distributed generation markets. It is for this reason that, for more than a decade, Delta-ee has been investing strongly in building its knowledge and databases of global distributed power markets, and we will continue to do this while extending our coverage of new geographies and technologies. For example, what share of gas turbines go into the centralized or decentralized market? What share of the decentralized power market is power-only, cogeneration (CHP) or trigeneration (CCHP) applications? Where are growth markets for gas engines?
To find out more about Delta-ee’s ongoing Distributed Power research, please contact Dina at firstname.lastname@example.org. Dina Darshini is a market analyst at Delta Energy & Environment, a consultancy specializing in global heat and distributed energy markets.