1- 30 MWe gas turbines (especially in CHP mode) will likely continue to have the majority market share in mid-sized and large industrial sites with electricity and high temperature steam / heat needs. However, gas engines (100 kWe – 20 MWe) are increasingly stealing market share across a variety of other end-use sectors.
Figure 1: Gas engines vs. gas turbines in stationary power applications
The diagram below highlights the gradual shifts towards gas engines that are likely to happen by 2020-2025.
Below, Delta-ee discusses some of the key battle-grounds between gas engines and gas turbines that we are witnessing today, and how we expect this to unfold over the next 5 to 10 years.
Battle-Ground #1: District Heating with CHP (> 25 MWe)
- Traditionally, larger district heating (DH) projects which employ CHP have relied on gas turbines or coal. In many countries, this trend will inevitably continue (e.g. in Eastern Europe and some parts of Asia).
- However, there is growing evidence to suggest that DH schemes of the future will seek to utilise CHP plants which can operate flexibly in reaction to increasingly volatile electricity prices (while continuing to meet heat demands). This positions gas engines well to increase market share in this sector at the expense of gas turbines which are less able to ramp up/ramp down as quickly.
- Germany is leading the charge in this regard with the announcement of 100 MWe-scale CHP plants (190 MWe and 100 MWe) using gas engines to be installed within DH schemes in 2018.
- In future, we expect greater demand for flexible CHP projects in DH schemes. This will likely be most evident in West Europe and North America.
Battle-Ground #2: Large Commercial Buildings / Campuses
- This sector is one in which gas engines have made significant in-roads in the market share of gas turbines in recent years, and the trend will likely continue. With more gas engine products in the larger (>3 MWe) size range coming to the market, improved performance (i.e. greater electrical efficiencies) and a greater demand for flexible operation (perhaps the most significant development), gas turbine suppliers are increasingly coming under pressure from gas engines.
- 1-2 gas turbine packagers have effectively withdrawn from Europe as a result of low sales. While this was not purely down to competition from gas engines, Delta-ee understands this to be a significant contributory factor.
Battle-Ground #3: Peaking Power Plants
- By definition, peaking power plants need to have the ability to operate flexibly, often with fast ramp up/ramp down rates. Gas engines are well placed to meet these needs.
- The transition to gas engines is already well underway (although gas turbines will continue to be commonplace, especially within larger peaking plants, i.e. > 100 MWe in size).
- In Turkey (and other countries), Wartsila has recently been successful in winning orders for new gas-fired peaking power plants using gas engine technology, often with project requirements for quick delivery and to provide electric grid stability. We expect continuing – and increased – announcements of projects where gas engines have been chosen to provide peaking power plant solutions.
To have a discussion about our research on market sweet spots for each product or size range, feel free to contact Delta-ee’s Distributed Power and CHP team – [email protected].