December 2015 - Water-Wastewater Treatment Chemicals Insights 58

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Worldwide installations of new gas turbines will average 74,000 MW per year over the next five years. The system sales revenue will be $75 billion per year. GE, Siemens and the other turbine vendors will generate revenues of $20 billion/yr. just for the turbine equipment. This is the latest projection in 59EI Gas Turbine and Combined Cycle Supplier Program published by the McIlvaine Company.

The worldwide installed gas turbine capacity is 1.5 million MW. Purchases of repair parts consumables and upgrades at existing power plants will average $30 billion/yr. Part of this investment will be a result of greenhouse gas initiatives. The least expensive way to reduce the carbon footprint is to make the existing gas turbine more efficient. Adding the steam cycle makes the biggest difference but there are other options as well. Inlet filter replacement for existing units will be more than $500 million. Another $460 million will be spent for SCR systems and catalyst per year. The market for replacement parts for pumps and valves will be significant.

The gas turbine equipment suppliers purchase most of the components they furnish as part of turbine packages. Complete turnkey systems, including the gas turbine, steam turbine, cooling towers, HRSG, SCR, etc. are sold by a number of companies who do not manufacture turbines. Despite the fact that the purchaser could be an end user, a system supplier or an EPC, the number of companies purchasing filters, treatment chemicals, instrumentation, pumps and valves is very limited.

Those suppliers selling hardware for new power plants need to contact the operators, the system suppliers and the engineering companies. Those selling consumables have a more limited target.

In terms of end users, there are less than 100 power plant operators who will buy most of the equipment and consumables. E.ON has 23,000 MW of gas turbines in operation while Calpine has 26,000 MW. Together they have over 3 percent of the world’s installed capacity. The number of system suppliers and engineering companies is also limited. Black & Veatch, Burns & McDonnell, Sargent & Lundy, Bechtel, Kiewit and a few other U.S. based architect engineers do a lion’s share of the engineering work.

The number of equipment vendors is even more limited. GE had 49 percent of the global gas turbine market last year, followed by Siemens with 23 percent, Mitsubishi Hitachi with 17 percent and Alstom with 2 percent. With the purchase of Alstom, the GE share will rise above 50 percent. In addition, GE has made a huge investment in a new more efficient design which may boost their share well above 50 percent.

GE’s new flagship, HA Turbines, will be the largest and most efficient in their class. The first delivery was to EDF’s Bouchain combined cycle power plant in France in August and is now being installed. The first U.S. order is from Exelon. Four 7HA turbines intended for expansions at the Wolf Hollow and Colorado Bend plants in Texas are expected to come online in 2017.

The 50-hertz 9HA and 60-hertz 7HA both come in two different models. The 9HA.01 is rated at 397 MW in simple cycle mode and 592 MW in 1 x 1 combined cycle mode, while the 9HA.02 is rated at 510 MW in simple cycle and 755 MW in combined cycle. The 7HA.01 and 7HA.02, meanwhile, are rated at 275 MW and 405 MW and 337 MW and 468 MW, respectively.

Both designs can achieve better than 41 percent efficiency in simple cycle and more than 61 percent in combined cycle. GE says the 9HA.01—the model slated for Bouchain—can reach full power in 30 minutes and ramp at 60 MW per minute.

GE already has $1 billion in firm orders for 7HA and 9HA turbines—16 units so far—and 53 potential projects around the world have opted for the turbines. GE hopes to sell up to 500 of the new design by 2030, which could represent up to half of its gas turbine sales.

For hardware purchased directly by gas turbine suppliers, one company represents more than 50 percent of the potential and three companies combine for 90 percent.

Most suppliers have a direct sales force for large customers and a network of sales representatives or distributors for the balance of sales. Since 70 percent of the sales will be to less than 100 large operators, equipment suppliers and engineering companies, it is important to focus on the direct sales effort.

Despite the movement away from coal in developed countries, the heavy investment in new coal-fired power generation by developing countries is creating an annual $170 billion market with some peaks of close to $200 billion over the next five years. India, Vietnam and Indonesia will be the leading purchasers. However, there will be some investment in the developed countries who are reducing the total CO₂ footprint from coal. The route they are taking is to build new highly efficient coal-fired power plants to replace the high CO₂ emitting existing power plants. Japan is a prime example. Dozens of new coal-fired power plants are underway in Japan.

China is slowing down its investment in new coal-fired power plants but will continue to be a leading purchaser. Coal-fired power is the key to the smog reduction program. The electric power provided by these power plants is used in commercial and residential buildings as a substitute for solid fuels burned on site which are presently creating much of the smog. The large coal-fired power plants built recently in China are more efficient than the average U.S. coal-fired power plant and have all the pollution control equipment.

Most of the new coal-fired boilers will be of the ultra supercritical design. This requires high temperatures and pressures. International suppliers of pumps, valves, piping and treatment chemicals benefit from the performance demands and the need to rely on experienced suppliers. These boiler systems will be furnished by suppliers from China, Japan and the U.S. as well as some of the Eastern European countries. Due to the new World Bank limits on funding coal-fired power plants, the international plant suppliers will be a more important funding source.

Highly efficient particulate control equipment will be utilized on all the new systems. Many will also have SO₂ and NO_x removal devices. The requirements for mercury reduction have spread beyond the U.S. borders. China also has set emission standards for mercury. Its Near Zero Emissions (NZE) policy is as stringent as any policy around the world.

Pulverized coal firing will be most common with circulating fluid bed combustors being used for some fuels where size reduction is challenging. Ball mills and other size reduction equipment is typically furnished by the boiler system supplier.

There are some promising technologies such as oxy-combustion which could achieve relatively low cost CO₂ sequestration. In fact, a boiler firing 20 percent biomass and 80 percent coal with CO₂ sequestration would be greener than wind or solar. Because there are not any emission to the air and the biomass is renewable, there would be a net decrease in greenhouse gases for every MW produced.

Due to the lack of water in many developing countries, dry cooling will be considered as an alternative to wet or hybrid cooling. However, in warmer climates, dry cooling is not efficient. Wastewater reuse is also a high priority not only in arid areas but in all countries. The reason is the increasing concern about water pollution. With zero liquid discharge and use of municipal wastewater as a water source, a power plant is reducing water pollution with every megawatt produced,

Weekly tracking of activities at each coal-fired power plant around the world except China is found at: 42EI Utility Tracking System.

The Top 200 Purchasers buy more than 50 Percent of the World’s Water Treatment Chemicals

The largest users of water treatment chemicals are also the industries which are most concentrated. A few oil and gas companies produce most of the oil and gas. Large power companies produce most of the electricity. A few large electronics companies produce most of the semiconductors and flat panel displays. In fact, Samsung is a leader in both products.

Due to the government ownership of wastewater plants in many countries and the growth of third party operators such as Veolia and Suez, the water and wastewater industry is also relatively concentrated in terms of decision makers.

Water treatment chemical producers sell directly to some large users and sell through distributors to others. The percentage purchased by the large users is rising and calls for more focus on this segment by the producers. This is the conclusion reached by McIlvaine Company in N026 Water and Wastewater Treatment Chemicals: World Market.

The 2015 treatment chemical sales will exceed $26 billion. Sales of chemicals to provide ultrapure water (UPW) will be $1.1 billion.

The electronics and power companies dominate the market for ion-exchange resins and other chemicals primarily used with ultrapure water. The UPW chemicals market includes $500 million of purchases by electronics and pharmaceutical manufacturers and $600 million by power plants. However, a few companies dominate the electronics business and they are among the largest UPW treatment chemicals purchasers.

#	Company	Semi	Other Electronic	Power
1	Samsung	x	x
2	Intel	x
3	TSMC	x
4	EDF			x
5	LGE		x
6	Sony	x	x
7	SK Hynix	x
8	Micron	x
9	China Datang			x
10	China Guodian			x

Samsung is the largest UPW treatment chemicals purchaser followed by Intel and TSMC. The largest power purchaser is EDF who ranks fourth.

For polymers and other chemicals used in UPW systems but also used elsewhere, the power plants rank above the semiconductor companies. The power companies are also large purchasers of corrosion inhibitors and anti scalants. Total treatment chemical purchases by power plants in 2015 will be $5 billion of which $3 billion will be spent by the coal-fired power generators.

There is subset of this group which also operates flue gas desulfurization (FGD) systems. This process expands the treatment chemical needs. This group is highly concentrated with just seven companies accounting for 44 percent of the treatment purchases.

Water and Wastewater Treatment Chemical Purchases by Coal-fired Power Companies with FGD
# of Corp	FGD capacity for each MW x 1000	Total MW 1000	% of Total Coal-fired Installed Base	WWTC Purchases $ millions	% of total $26 billion	Examples
7	Over 50	575	44	1,320	5	Big 5 Chinese Corp
10	10-50	150	12	360	1.4	AEP, TVA, Duke, Enel, EON
15	5-10	105	8	240	0.9	NRG, Xcel, Tokyo Electric, Chubu Electric
20	3-5	80	6	180	0.7	AES, EPDC, RWE, CEZ
52	Sub total	910	70	2,100	7
350	0-3	390	30	900	3	U.S., Europe, China
404	Total	1,300	100	3,000	10

These seven companies will spend $1.3 billion for treatment chemicals this year. This represents 5 percent of all treatment chemical purchases. The average per company is 0.8 percent of total purchases. Other industries are also concentrated. The largest 200 companies across the various purchasing industries average more than 0.25 percent of the purchases. So in total they account for more than 50 percent of the market.

The McIlvaine Company has created a program for suppliers to maximize sales to the largest purchasers. It combines the treatment chemicals report with tracking of prospects and projects. Detailed Forecasting of Markets, Prospects and Projects.