October 2015 - Water Market Insights 169

§ Huaneng Bayanbaolige 1,320 MW proposed Coal-fired Power Plant in Inner Mongolia Autonomous Region, China

§ Seventeen Power Plant Owners have Purchased 56 Percent of all the World’s FGD Systems

§ Carbonxt and United Conveyor Corporation launch Joint Air Quality Control Offering

§ Precipitators can compete with Fabric Filters – Hot Topic Hour Thursday October 22, 2015

The 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 Utility Tracking System which has data on every plant and project plus networking directories and many other features.

Power plant valve purchases will remain at a high level thanks to continued construction of new coal-fired power plants in China, Vietnam, Indonesia and Japan. Despite the fact that Japan was the host of the original greenhouse gas reduction convention (Kyoto Protocol), the country is planning 40 new coal-fired power plants. Old coal-fired power plants will be retired, so CO₂ emissions will not be increased. The EU also is building new coal-fired power plants to replace higher emitting old power plants. In Asia, the need for new electricity and the lack of natural gas are the big drivers.

Next year nearly 50 percent of the $8 billion power plant valve expenditures will be by East Asian power generators. NAFTA will be the second largest region thanks to construction of new gas turbine combined cycle power plants. These forecasts are provided in Industrial Valves: World Market.

Coal-fired power plants are at the top of the list with regard to valve opportunities. The reasons are twofold. First, more coal-fired power plants will be built than thermal power plants. Second, coal-fired power requires water management in both the liquid and steam phases, as well as various slurries for flyash, bottom ash, and limestone for flue gas treatment. Additionally, there are valves required for the many chemical systems to treat boiler feedwater and plant wastewater. Valve types include pressure relief valves, as well as globe, gate, ball, butterfly, plug and check valves. It is estimated that a typical utility-scale coal-fired power plant includes more than 5,000 valves.

Nuclear power is second on the list, with a slightly smaller number of valves per plant because there is no requirement for flue gas treatment or flyash and bottom ash handling. Nevertheless, the redundant systems in nuclear power plants ensure a large number of valves on par with coal-fired power. There are currently 60 nuclear reactors under construction in 13 countries.

Gas-fired power plants hold significant potential for valve sales both in terms of numbers of new plants, and in terms of plant complexity. Most gas-fired power plants currently being built reflect a combined cycle design that includes a gas turbine, as well as a Heat Recovery Steam Generator (HRSG) with the attendant valves for boiler feedwater, condensate, cooling water, and water treatment chemicals. These plants operate with efficiencies of greater than 60 percent, and are now sized 400 MW and larger for baseload power generation as well as for backup power for intermittent renewable energy.

More Than 50 Percent Of The World’s Ultrapure Water Products Will Be Purchased By Just 50 Companies

Power plants, electronics manufacturers and pharmaceutical producers will spend $4.6 billion in 2015 on products and services to purify water to such an exceptional degree that there is a whole classification called “ultrapure” water. This purity is obtained with a combination of chemicals and physical process steps such as reverse osmosis (RO) and ion exchange.

The purchases will be concentrated among relatively few companies. The top 20 companies will purchase 37 percent of the total products and the top 50 companies will average more than 1 percent each ($23 million).

The top 8 semiconductor companies will account for purchases of $795 million. The top 10 power generator purchases will total $625 million. The top 4 flat panel and other electronics manufacturers will spend $284 million.

#	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

Pfizer is the top pharmaceutical purchaser but is only ranked #23 on the list of the 40 largest purchasers.

The large ultrapure water product purchasers are moving toward global sourcing for several reasons. One is the importance of the products to the plant operations. A single small particle can cause rejection of a $300 chip. Contaminated drugs are one of the biggest concerns of pharmaceutical companies. The ultra supercritical power plants which are now under construction require water purity levels far greater than the sub critical power plants which they are replacing.

The second reason for global sourcing is to facilitate evaluations on total cost of ownership. The high cost of these evaluations is spread out among a number of purchases. The benefits of buying the best rather than lowest price products far outweigh the costs.

The combination of concentration of buying power and emphasis on highest quality products creates a new and major opportunity for ultrapure water system, product and service providers. McIlvaine has created a new route to market to take advantage of this opportunity. It combines N029 Ultrapure Water: World Market with other McIlvaine services to provide detailed forecasting of Markets, Prospects and Projects.

State by State Forecasts Needed by Suppliers of Flow Control and Treatment Products and Services

The market for flow control and treatment (N064 Air/Gas/Water/Fluid Treatment and Control: World Market) will be over $350 billion this year. The market has been segmented into 80 countries and sub regions. Some of the smaller countries account for less than 0.1 percent of the total. By contrast, California accounts for 2 percent of the total. So international suppliers need to segment the U.S. by region and, in many cases, by State. This is accomplished in a supplemental report, Analysis & Forecast by Industry & State.

The food segment provides an example. The U.S. flow control and treatment in the food industry represents more than 22 percent of the world total. Expensive pumps and valves are needed to meet the sanitary requirements of food processors. Cross-flow membranes not only provide high purity water and clean wastewater but are concentrating liquids such as juices and corn syrups. Fabric filters are used not only for air pollution control but to capture product in hot gas streams e.g. coffee spray driers.

The U.S. will purchase two hundred and twenty times more food flow control and treatment products and services than Guatemala this year.

FOOD INDUSTRY(%s) BASE YEAR 2014
	2014	2015	2016	2017	2018	2019	2020	2021
United States	21.80	22.30	22.82	23.36	23.92	24.50	25.09	25.69
Canada	1.95	1.98	2.02	2.06	2.09	2.13	2.18	2.22
Mexico	2.39	2.49	2.61	2.73	2.87	3.01	3.17	3.35
Argentina	0.98	1.01	1.04	1.07	1.10	1.13	1.17	1.20
Brazil	3.11	3.17	3.23	3.30	3.36	3.43	3.51	3.59
Chile	0.44	0.45	0.47	0.48	0.50	0.52	0.54	0.56
Colombia	0.69	0.72	0.76	0.79	0.83	0.86	0.90	0.94
Ecuador	0.21	0.22	0.23	0.23	0.24	0.26	0.27	0.28
Guatemala	0.11	0.11	0.11	0.12	0.12	0.13	0.13	0.14

The state analysis segments each industry by state and aggregates it into nine regions. California represents 10 percent of the U.S. food industry flow control and treatment market while the Pacific states account for more than 14 percent.

FIGURE I-2B: U.S. Food Industry - Percent of U.S. 2014 Total
STATE	2014	2015	2016	2017	2018	2019	2029	2021
Alaska	0.32	0.33	0.35	0.36	0.37	0.39	0.40	0.42
California	10.26	10.67	11.10	11.54	12.00	12.48	12.98	13.50
Hawaii	0.22	0.23	0.24	0.25	0.26	0.27	0.28	0.29
Oregon	1.21	1.26	1.31	1.36	1.42	1.47	1.53	1.59
Washington	2.08	2.16	2.25	2.34	2.43	2.53	2.63	2.74
TOTAL Pacific States	14.09	14.65	15.24	15.85	16.48	17.14	17.83	18.54

McIlvaine continues to adjust forecasts based on a number of its own reports plus U.S. census data such as the number of employees in each facility in each industry.

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NAICS	Alabama Food manufacturing facilities--- # of employees	25	50	200	300	500
3111	Animal Food Manufacturing	39	20	16	3	0
3112	Grain and Oilseed Milling	8	2	4	2	0
3113	Sugar and Confectionery Product Manufacturing	14	13	1	0	0
3114	Fruit and Vegetable Preserving and Specialty Food Manufacturing	8	6	1	0	1
3115	Dairy Product Manufacturing	8	4	1	3	0
3116	Animal Slaughtering and Processing	79	34	9	16	20
3117	Seafood Product Preparation and Packaging	22	9	9	4	0
3118	Bakeries and Tortilla Manufacturing	74	61	9	4	0
3119	Other Food Manufacturing	26	11	8	6	1
3121	Beverage Manufacturing	43	37	2	4	0