$14 Trillion to Be Spent On Power Plant Equipment and Repairs in the Next 25 Years

Electricity production will be up 100 percent by 2040.  This will require an investment of $14 trillion in new hardware and repair parts for existing equipment and systems.  Coal-fired generation will grow by 10 percent.  One would, therefore, expect that investment in coal-fired power generation would be less than in other technologies. However, when you take into account repair and upgrades, coal-fired power will require more in investment than any of the alternatives.

World coal powered generation capacity is 2.2 million MW today and is slated to rise by only 10 percent or only 200,000 MW during the next 25 years. The investment needed to keep an old power plant running from age 50 to age 75 and to be upgraded to the likely emission limits, will be nearly equal to the $2 million/MW cost of a new power plant over a 25 year period.  This means that $4.4 trillion will need to be invested in coal-fired power. Much of that will be in Asia where many new power plants will be built. Net capacity will drop in Europe and the U.S. This does not mean that the two areas will not be spending money on coal-fired power plants.  The U.S. moratorium on new coal-fired power plants and the necessity to maintain 200,000 MW of coal-fired capacity means that the U.S. will have to spend $400 billion just to keep the old power plants running and meet increasingly stringent environmental standards.

Nuclear capacity is slated to increase from 392 GW in 2013 to more than 620 GW in 2040.  But its share of global power generation will rise just one percentage point to 12 percent, because almost 200 reactors of the 434 operational at the end of 2013 will be retired, they will need to be offset by new power plants.  Total investment will exceed $2 trillion over the next 25 years.

The gas turbine combined cycle power generation market will grow by more than 300 GW to over 2 million GW by 2040.  Replacements, upgrades and retirements all result in a net capital investment of $2.2 trillion.

Biomass capacity will be 300 GW in 2040.  Wind capacity will be 1300 GW and solar 1000 GW.

By 2040 Chinese energy production will be twice that of the U.S. but per capital consumption will still be only half that of the U.S. The gas turbine market in China will be bolstered by the Chinese coal-to-gas program which will deliver gasified coal to turbine generators throughout the country.

India today is home to one-sixth of the world’s population and is its third-largest economy, but accounts for only 6 percent of global energy. Demand for coal in power generation and industry will surge increasing the share of coal to almost half of the energy mix and making India the largest source of growth in global coal use.  By 2040, Asia is projected to account for 80 percent of coal consumed globally. Coal will remain the backbone of the power system in many countries. 

Many components of coal and gas turbine generating plants need to be replaced frequently. Catalyst for a coal-fired power plant is replaced every 3-5 years and every 10 years for a gas turbine power plant.  Boiler feedwater valves will be replaced more frequently in a gas turbine power plant due to the constant cycling and phenomena such as Flow Accelerated Corrosion (FAC).  Slurry pumps, ball mills, fans and air pre-heaters in coal-fired power plants are in periodic need of replacement parts. Both coal and gas turbine operators are now more likely to use zero liquid discharge (ZLD) systems which are high maintenance systems.

Coal-fired power plants are switching from electrostatic precipitators to fabric filters.  This results in bi annual purchases of new bags. Gas turbine plants now favor high efficiency inlet filters which are more expensive and need more frequent replacement than the low efficiency alternative.

The power plant generation market will be reviewed in a McIlvaine Hot Topic Hour at 10:00 a.m. CST on April 7.  Click Here to Register

McIlvaine publishes market reports with detailed forecasts of the power market. They include:

59EI Gas Turbine and Combined Cycle Supplier Program

N043 Fossil and Nuclear Power Generation: World Analysis and Forecast 

42EI Utility Tracking System

International Strategy is Critical for Survival in the Flow Control and Treatment Industries

Whether you sell pumps, valves, filters, fans, compressors, treatment chemicals, scrubbers or centrifuges you cannot focus on just the U.S., China, or EU market.   Here are some examples of major opportunities elsewhere:

The U.S. has placed a moratorium on new coal-fired power plants but China will build far more than the EU or that the U.S. will retire.  Vietnam, Indonesia and Myanmar are building power plants with a combined capacity of 150,000 MW.

China is the largest fish farming country, but Indonesia is also large.  The industry is moving to sophisticated recirculating systems with a big investment in flow control and treatment equipment.

Australia, a leader in iron ore and coal mining, has become a recent player in LNG with successful conversion of coal bed methane.

Individual projects can measurably impact the market in a given year. There are nine large Canadian potash projects underway with a combined capital investment of over $30 billion.  The largest project will require a $4 billion investment. Algeria’s state-owned Sonatrach has let a series of contracts to Amec Foster Wheeler to provide front-end engineering and design (FEED) for three grassroots refineries that will add a total of 15 million tons/year in refining capacity in the country.  So these few projects represent a significant percentage of the yearly flow control and treatment revenues for the worldwide industry.

Coal-fired projects in Indonesia could result in an investment of over $100 billion.  Vietnam is vacillating on plans which would require a coal-fired power plant investment of over $200 billion.  Delay or cancellation of large projects can materially affect the revenues of the flow control and treatment suppliers.

Flow control and treatment companies need to pursue the world market.  There are 196 countries with more than 50 major industries who purchase flow control and treatment equipment.  Many of these countries are quite small.  McIlvaine forecasts divide the world into 80 purchasing entities which include 72 separate countries and 8 country groups.  The pump forecast example below shows pump sales in Pakistan will be $216 million in 2021, but sales will only be $22 million in a group of countries labeled “Other Western Europe.”

The countries aggregated in the Other Western Europe category are Andorra, Faroe Islands, Gibraltar, Greenland, Guernsey, Iceland, Isle of Man, Jersey, Lichtenstein, Luxembourg, Malta, Monaco, San Marino and Vatican.

The average for the 80 entities in a $60 billion annual market is 0.75 percent. While, as individual countries, many in the “other” category are insignificant, as a group they are relevant.  This is particularly true for the Other Africa group which accounts for 0.75 percent of the total market and the Other Middle East group which in the aggregate is bigger than the average.

McIlvaine has created a program to help international flow control and treatment suppliers maximize the global opportunity.  It is described at: Detailed Forecasting of Markets, Prospects and Projects

Bob McIlvaine is available to answer your questions and can be reached at 847-784-0012 ext. 112  rmcilvaine@mcilvainecompany.com.

$70 Billion Filter Market in 2016

Filter revenues for mobile, medical, residential/commercial and industrial applications will exceed $70 billion in 2016.  No one company has more than 5 percent of the total market.  These are the conclusions reached by the McIlvaine Company by aggregating data in a number of its reports.

Revenues are displayed in segments representing $ millions: 0 – 250,  250 – 700,  700  – 1400,  1400 and above

The largest market segment is stationary industrial liquid cartridges with a 2016 market of $17 billion. This is followed by the mobile liquid cartridge market.  Mobile air filters, hydraulic and compressed air filters, cross-flow filtration, liquid macrofiltration, dust collection, HVAC filters, and coalescing filters are the remaining product segments.

A small but rapidly growing market is filtration of diesel exhaust fluid (DEF).  Urea/water injected into engines freezes at relatively high temperatures.  So filters are needed to prevent frozen particles from reaching the engine.

Not a single company is in the top five in each category.  Those in the residential segment tend not to be in mobile.  Most of the companies are U.S. based.

Donaldson is a major player in mobile and industrial air filtration. Their sales of liquid filtration products primarily for diesel engines have grown recently at double-digit rates. The diesel liquid filter sales are presently $500 million.  The company is not involved with commercial/residential filtration in a significant way.

Clarcor sales of engine and other mobile filters are $600 million per year.  Process liquid filter sales are $350 million per year. while industrial air filter sales are $475 million.  It is not a player in medical and residential applications.

Mann & Hummel has made both industrial and mobile acquisitions but its purchase of Wix with $900 million of revenue in the mobile sector was the largest purchase.

Daikin sales in 2015 were ¥2 trillion.  With the acquisition of Flanders filter sales are ¥100 billion or $890 million.

Twenty-two percent of Parker Hannifin sales of $11 billion are in filtration and engineered materials. Its strengths are mobile and industrial.

More details on the filter market are found at:

N064 Air/Gas/Water/Fluid Treatment and Control: World Market

N021 World Fabric Filter and Element Market     

N006 Liquid Filtration and Media World Markets

N024 Cartridge Filters: World Market  

N020 RO, UF, MF World Market  

McIlvaine also provides custom research and complete programs: Detailed Forecasting of Markets, Prospects and Projects

Utility E-Alert Tracks Billions of Dollars of New Coal-fired Power Plants on a Weekly Basis

Here are some headlines from the Utility E-Alert.

UTILITY E-ALERT

#1265 – March 25, 2016

Table of Contents

COAL – US

• Emissions Control upgrade finished at Oklahoma Coal-fired Power Plant

COAL – WORLD

• Tanjung Bin Energy Ultra-Supercritical Coal-fired Power Plant has entered Commercial Operation on Schedule
• Conserving Water at the Medupi Air-cooled Coal-fired Power Plant
• Proposed 1,000 MW Coal-fired Power Plant for Venezuela
• Gensa, Sochagota SA plans Feasibility Study for 150 MW Unit V for the Termopaipa Power Station
• Expansion Plans announced for 36 MW Choibalsan (Dornod) Power Station by 100 MW in Mongolia
• Shivee-Ovoo Power Station proposed near Coal Mine in Mongolia
• Chizhou Jiuhua Power Station plans 1,000 MW expansion for Units 3 & 4 in Anhui Province, China
• Plant achieves 3 mg/Nm³ Dust Emissions, 95 Percent DeNOx, and over 97 Percent SO₂ removal

The 41F Utility E-Alert is issued weekly and covers the coal-fired projects, regulations and other information important to the suppliers. It is $950/yr. but is included in the $3020 42EI Utility Tracking System which has data on every plant and project plus networking directories and many other features.

 McIlvaine Hot Topic Hours (HTH) and Recordings

     Explanation          Applicable Services         Schedule & Registration       Sponsored Webinars 

McIlvaine conducts periodic webinars which are in a discussion format and are free of charge to all participants. The displayed material and recordings are free to purchasers of the products and services and by subscription to others.

Format:  50-90 minute recorded discussion using McIlvaine display material. The session will be free of charge to all participants but registration is required.

Approach: There are two types of webinars. One is focused on Markets and directed to suppliers. The other is focused on aiding purchasers make the best Decisions relative to purchases of flow control and treatment equipment and services.

Markets HTH
The general overviews of the market including size and major variables will be discussed with heavy emphasis on technology and regulatory drivers.  The presentation will be based on the latest information appearing in McIlvaine multi-client reports. Questions and views from both subscribers and non-subscribers are encouraged.

Decisions HTH
McIlvaine has been publishing information systems on pollution control since 1974.  Each subject is organized by the pollutant control technology e.g. fabric filter, scrubber, etc. There are search capabilities to retrieve information on any application.  The newest addition has been slide deck systems displaying the issues and options relative to a specific applications.  Coal-fired power, cement, steel and waste combustion decision slide decks are continually updated.

The continually updated slide decks are displayed on the applicable decision system.  It is recommended that participants view the slide deck in advance of the session and be prepared with questions and views.

Value to purchasers and specifiers:  Your questions and interests will be prioritized in the discussion. You will get a monthly newsletter and have continuing access to the system and multiple ways to interface in the future along with a networking directory of suppliers.

Value to Suppliers:  You have the opportunity to provide data to be considered at no charge. If you are also a subscriber you will see the summaries in advance and be able to shed light on issues and options not properly covered in the slide deck.  If you are a subscriber you will receive the monthly newsletter and continuing yearly access to the system including networking directories.

44I Power Plant Air Quality Decisions  includes 1ABC, 3ABC, 4ABC, 9ABC decision services but not 2ABC. So those with multiple technologies and at least partial focus on power will find this combination most cost effective.

HOT TOPIC HOUR (HTH) SCHEDULE

Dates for the next 6 meetings are firm; the others will be held in sequence at approximately two week intervals.  Unforeseen developments could dictate the insertion of new subjects.

Click here to Register for the Webinars

You can register for our free McIlvaine Newsletters at: http://home.mcilvainecompany.com/index.php?option=com_rsform&formId=5.

Bob McIlvaine
President
847-784-0012 ext. 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com