WELCOME
Weekly selected highlights in flow control,
treatment and combustion from the many McIlvaine
publications. |
Briefs
Webinar: Wednesday:
The webinar Wednesday will cover all aspects of the program to pursue the
municipal wastewater treatment market. A summary of projected revenues for
major components, services and software will be provided along with examples of
the use of edge computer software by component software. The program to
identify the purchases by individual prospects will include a 50 slide analysis
just of BEWG. Sometime will be spent viewing
62EI
North American Municipal Wastewater Treatment Facilities and People Database
and
Municipal Wastewater Decisions.
Click
here to register for the free webinar
Forecasts for Replace and Repair for all CFT products.
We point out below that the market for FGD replace and repair components is
bigger than the new market. We are justifying the same conclusion for the
municipal wastewater industry. Big new markets driven by regulations have
slowed down. They still exist in India, and some other developing countries but
the Chinese market is maturing while the markets in the OECD countries are
already mature. Even the shale or tight oil technology has leveled off but at a
very high level. The result will be a more modest swing in the market for
components such as pumps and valves. The shale market in the U.S. not only
reduces oil and gas prices but protects against arbitrary price manipulation by
OPEC. The large replacement market for production related components will offset
the swings in the extraction market. The big growth area will be IIoT and Remote
O&M. CFT product suppliers can expand from the SOM or Serviceable Obtainable
Market to WOM or Wisdom based Obtainable Market
Impact
of IIoW Empowered IIoT on the Combust, Flow and Treat Market.
China as a Technology Leader: Longking
is one of the world's largest air pollution control companies. It also spends
more on R&D than most rivals in the OECD. It is a leader in dry scrubbing
technology, hybrid ESP-filters, and other cutting-edge technologies. In the
webinar this week we will be covering BEWG and their program to improve aerator
efficiency at their 300 wastewater treatment plants in China. We will also cover
the plant they are completing in Singapore which is under tennis courts and a
park. The plant will provide reusable effluent and incorporates high
efficiency turbo blowers for aeration. In the last half of twentieth century the
environmental markets boomed, and market leaders were created in the countries
with the most stringent regulations. In terms of NOx reduction and
tough limits China now has the most stringent regulations. This includes limits
for automobiles as well as stationary sources. As a result, China over the
last two decades rose from a production rate of less than 5% of the stationary
SCR catalyst to more than 40% of the world total. The advice to CFT system
suppliers is to expect more international competition from Chinese based
companies. The advice to component suppliers is that there is a big
opportunity to work with companies such as BEWG and Longking.
Large Replacement Market for Municipal Wastewater Combust, Flow and Treat
Products
The market for combust, flow and treat (CFT) products for municipal wastewater
treatment plants is growing faster than GDP and is larger than represented in
many reports. Forecasts for purchases of each type of product by municipal
wastewater plants is made possible by detailed analysis of the treatment flow
rates and each specific variable impacting the market for a product.
The starting point to determine the market for CFT products is the installed
treatment capacities. The
difference in installed capacity from one year to the next equals new builds
less retirements. Pumps, valves, nozzles, blowers and similar components need to
be replaced every 10-15 year. So,
unless the new build growth rate is higher than 6%/yr for a component replaced
every 15 years or 10%/yr for components replaced every 10 years the replacement
market will be larger than the new market. In a high growth country such as
India the new build expenditure will be far greater than the replacement, but
the total investment will still be small compared to a country such as the U.S.
with 40,000 MGD of installed secondary treatment capacity.
It is possible to greatly improve the accuracy of market forecasts by obtaining
accurate flow forecasts and then relating the investment for each component as a
function of flow rate. The following segments need to be considered.
Incremental new systems, new systems which replace retired systems,
replacement components, repair and service of existing components.
Over the life of the average pump, blower or high-performance valve the cost of
repair will exceed the original cost. As a result, the largest markets for
component suppliers are at existing plants in countries with a large installed
base.
The movement to IIoT and Remote O&M adds the potential to expand the service and
advisory opportunity and to negotiate yearly contracts which can be fixed price
or on a partnership basis where the owner and supplier share the savings.
Since owners will be armed with total cost of ownership data due to IIoT and
data analytics, the supplier will want to spend the time to prepare a total cost
of ownership evaluation. If his is not the lowest then he will need to invest in
R&D and be able to submit the Lowest Total Cost of Ownership Validation (LTCOV).
Millions of Gallons in Place as
of 2018 |
||||||||
Population |
Wastewater Treatment |
|||||||
|
Served with WWTP |
Primary |
Secondary |
Secondary |
||||
Country |
Total |
Urban |
Urban |
|
Increase |
Capacity |
Treatment |
Capacity |
|
(x 1,000) |
(x 1,000) |
(%) |
(x 1,000) |
(x 1,000) |
(MGD) |
(%) |
(MGD) |
United States |
332,745 |
310,470 |
0.995 |
308,918 |
6,696 |
43,888.6 |
94.00 |
41,255 |
Canada |
36,551 |
32,300 |
0.970 |
31,331 |
594 |
3,381.8 |
79.00 |
2,672 |
Mexico |
116,435 |
104,049 |
0.860 |
89,482 |
2,078 |
3,144.5 |
54.00 |
1,698 |
Argentina |
43,508 |
43,508 |
0.480 |
20,884 |
187 |
1,029.3 |
31.00 |
319 |
Brazil |
207,280 |
207,280 |
0.480 |
99,495 |
739 |
1,890.4 |
66.00 |
1,248 |
Chile |
18,352 |
18,352 |
0.960 |
17,618 |
359 |
973.4 |
84.00 |
818 |
Colombia |
50,504 |
44,235 |
0.790 |
34,946 |
1,022 |
399.1 |
40.00 |
160 |
Ecuador |
15,471 |
12,570 |
0.610 |
7,668 |
244 |
108.8 |
23.00 |
25 |
Guatemala |
17,372 |
11,892 |
0.420 |
4,995 |
278 |
30.7 |
28.00 |
9 |
Peru |
32,244 |
26,049 |
0.690 |
17,974 |
491 |
300.7 |
43.00 |
129 |
Venezuela |
32,443 |
32,443 |
0.620 |
20,114 |
295 |
179.7 |
41.00 |
74 |
Other South & Central America |
94,736 |
71,810 |
0.480 |
34,469 |
1,057 |
1,121.7 |
41.00 |
460 |
It is highly desirable and possible to forecast the purchases for the few
hundred enterprises which buy or influence the majority of the component
purchases. BEWG operates more than 300 wastewater plants in China and other
countries. Suez operates half the
wastewater plants in Chile and remotely monitors plants around the world from a
remote center in France. Many
countries have privatized wastewater treatment plants.
This results in just a few hundred organizations with very large
purchases.
2018 Municipal Wastewater
Purchases
$ millions |
|||||||
World
|
U.S. |
Suez
|
Jacobs
CH2M
|
BEWG |
Los Angeles |
Chicago MSD |
|
Guide |
5280 |
1100 |
106 |
63 |
60 |
11 |
22 |
Control |
8640 |
1800 |
173 |
104 |
98 |
18 |
36 |
Measure |
4320 |
900 |
86 |
52 |
50 |
9 |
18 |
Valves |
4800 |
1000 |
96 |
58 |
52 |
10 |
20 |
Macrofiltration (belt presses,
sand filters) |
2400 |
500 |
48 |
29 |
28 |
5 |
10 |
Pumps |
9600 |
2000 |
192 |
115 |
105 |
20 |
40 |
Treatment Chemicals |
6720 |
1400 |
134 |
81 |
80 |
14 |
28 |
Sedimentation and Centrifugation
|
4320 |
900 |
86 |
52 |
80 |
9 |
18 |
Variable Speed Drives and Motors |
4800 |
1000 |
96 |
58 |
48 |
10 |
20 |
Turbines, Fans, and Compressors |
10560 |
2200 |
211 |
127 |
120 |
22 |
44 |
RO/UF/MF Cross Flow Membrane
Systems |
1200 |
250 |
24 |
14 |
45 |
3 |
6 |
Air Pollution Control |
960 |
200 |
19 |
12 |
10 |
2 |
4 |
Forecasts for each component are compiled in McIlvaine multi-client or custom
reports.
The Multi-client reports are shown under
MARKETS.
Profiles of the largest operators along with activity at specific plants are
included in
Municipal
Wastewater Treatment Plants and People.
The market for guide, control, measure and remote monitoring is included in
IIoT and
Remote O&M.
$30 billion/yr Aftermarket and $10 billion/yr Innovation Market for FGD
History:
There has been more than $300 billion invested in Flue Gas Desulfurization
Systems since the first system was installed at Union Electric in St Louis in
1968. This system was a result of a partnership between Environeering with the
scrubber knowledge and Combustion Engineering, the world's largest coal fired
boiler supplier.
In the early years it was a sellers' market with innovation, knowledge and risk
taking being the dominant attributes for success.
Since all components were purchased the return on investment (ROI) for
knowledge was huge. The only
problem was that with a volatile regulation driven market the negative ROI based
on risk eventually erased the profits based on knowledge.
Most of the European and U.S. FGD suppliers eventually faced either bankruptcy
or fire sales to more diversified companies.
Of the early participants only the Mitsubishi/Hitachi, Babcock and
Wilcox, and Chiyoda names are still relevant.
Research Cottrell, Joy, Deutche Babcock, Combustion Engineering, Saarberg
Holter, KRC, Steinmuller, Peabody and other original participants have
disappeared or been integrated.
The most convoluted is GE. The
sequence is Peabody and an Ontario Hydro spin off become part of GE (GE
Environmental Systems) which eventually become part of Marsulex.
Combustion Engineering was sold to ABB which then sold the division to
Alstom which was then sold to GE.
The order just received by GE for an FGD system for NTPC is a design originated
by Environeering/Combustion Engineering.
So over 30 years GE has divested itself of one FGD system company and now
owns one of its original competitors.
System Suppliers:
The leading FGD suppliers in recent years have been Longking, Wuhan Kaidi,
Guodian and other Chinese suppliers.
BHEL is suddenly looming as a major supplier based on its awards in
India. MHPS is one of the original
suppliers who still has a significant market share. This company is a result of
the merger between the Hitachi and Mitsubishi power divisions.
In general, the recent contracts are based on much less knowledge and risk than
the early ones. Suppliers have
failed to innovate. As a result,
the system offerings today vary little from the ones offered in the early days.
Any difference is in the components, consumables and chemistry.
The quality of limestone, treatment chemicals, bags, nozzles, linings, mist
eliminators, filter belts, agitators, gypsum oxidation compressors, pumps,
valves, instrumentation, drives, controls, fans, ball mills, cyclones and other
components has greatly improved.
The control of chemistry is vastly improved.
As a result, the modern FGD system has no more downtime than the rest of
the boiler system. These improved
components also result in SO2 removal above 98% compared to the 80%
target in the early days. In fact,
China presently has even more stringent limits.
Components and Consumables:
The annual cost of nozzles, valves, fans and compressors is approximately 15% of
the original cost. By 2023 there
will be 2 million MW of FGD systems in place, this means that components for
30,000 MW will be replaced each year.
Over the years the new system purchases have varied from 1000 to 90,000
MW. The average has been less than
30,000 MW. As a result, replacement
components represent a market larger than that for new components.
The market for consumables such as filter belts, seals, bags, limestone,
treatment chemicals, balls for ball mills and others has continued a slow but
steady rise over the years. The
reduction in the total installed FGD in the U.S. and Europe will be less than
100,000 MW over the next five years and will be offset by 200,000 MW of new
systems in Asean countries, India, and South Africa and a few others. The result
is a steadily increasing market for components and consumables.
Innovation:
The international system suppliers lost market share because they failed to
innovate. Large numbers of
companies entered the U.S. market in the 1970s. Japanese and German companies
entered the market in the 1980s.
There was not a large enough or sustainable market for them.
So, R&D and innovation was not fundable. The trend continues with many
Chinese suppliers and now Indian suppliers (mostly under license).
However, because of the big retrofit market the innovation potential is
greater than ever.
Here is an example: the successful MgO system at Philadelphia Electric
unintentionally created a rare earths feedstock.
With the knowledge we now have this system can be slightly modified to
produce rare earths, high quality flyash, hydrochloric acid and sulfuric acid or
a pure gypsum which can compete with precipitated calcium carbonate.
HCl Scrubbing and Rare Earth Recovery from
Coal-Fired Power Plants and Gasifiers are the Perfect Marriage
The relatively new catalytic filter combined with dry sorbent injection could
carve out a significant market.
Lime is a better reagent choice for wet scrubbers as well as dry scrubbers under
certain conditions. Under certain conditions there is a good market for ammonium
sulfate and certain other by-products.
More modest innovations such as improvement of scrubber internals and
selection of the natural oxidation and flyash/sulfate for landfills are also
attractive.
The biggest innovation potential is remote operation and maintenance support for
FGD systems around the world.
Europe and the U.S. have an excess of FGD experts. Asia has a big need.
With cloud-based systems an expert in Windsor, Connecticut can be making
judgements based on feed from a remote-control center in the Philippines and a
plant operating in Vietnam. MHPS already has the remote-control center in the
Philippines' but it is presently mostly monitoring rotating equipment.
With cloud-based software MHPS could extract the world's expertise for
each component and each consumable.
The potential for component and consumables suppliers is very high.
An international limestone supplier can work with local suppliers and
guide them. He can provide optimum
limestone quantities and qualities to plants all over the world.
The international nozzle supplier has the same opportunity.
Valve and pump suppliers have not only the FGD opportunities but those in
all the other plant processes. The compressor delivering oxygen for FGD gypsum
can be controlled based on local electricity costs, needed gypsum quality and
other parameters.
The McIlvaine Company is in the position of guiding suppliers based on a
combination of standard reports and "Forecasting".
In addition to the FGD report (N027
FGD Market and Strategies ), there are also reports on IIoT and
Remote O&M, valves, pumps, treatment chemicals, liquid filtration, fabric
filters and precipitators. Special
reports are also available for all other components. All the projects are
tracked in the Utility Tracking System
which also includes purchases by all the largest utility companies.
Details on the reports are available at
www.mcilvainecompany.com.
For more information on custom forecasting contact Bob McIlvaine at
rmcilvaine@mcilvainecompany.com