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Weekly selected highlights in flow control, treatment and combustion from the many McIlvaine publications.

• Gas Turbine Webinar to Cover Markets and IIoT on May 23^rd
• $180 billion Market for Combust, Flow and Treat for Gas Turbines
• Accurate Forecasting of the Combust, Flow and Treat Markets Would Cost $2 billion
• Power Plant Cross Flow Membrane Revenue Opportunity to Exceed $1.2 billion by 2025

Gas Turbine Webinar to Cover Markets and IIoT on May 23^rd

A McIlvaine Webinar on May 23^rd will cover the market factors shaping the gas turbine market (see article below). Some examples of current projects will be discussed along with the trends toward remote O&M and third-party operation.  Here are the headlines in our recent Alert

GAS TURBINE & RECIPROCATING ENGINE

MARKET ALERT APRIL 2018 

 GAS TURBINES - U.S.

·         FLORIDA: Duke Energy Florida nears Completion of State-of-the-Art Natural Gas Plant

·         OKLAHOMA: OG&E completes Mustang Energy Center

·         SOUTH CAROLINA: Cleaner, High-Tech Natural Gas Plant in South Carolina now benefiting 2.5 million Duke Energy Customers

 GAS TURBINES - WORLD

·         AFGANISTAN: Bayat Power Sign Agreement Approving Bayat-1 Power Project

·         ITALY: GE and Edison/EDF Group Sign Milestone Agreement to Optimize Power Plant Fleet Infrastructure at Italy's Candela Power Plant

·         MALAYSIA: GE Signs Service Agreement for GE 9HA.02 Technology at 1,440-Megawatt Combined-Cycle Power Plant in Malaysia

·         PAKISTAN: Haveli Bahadur Shah Power Plant Nears Completion as SEPCOIII and GE Power Successfully Conclude Reliability Run Test
SENEGAL: Wärtsilä 130 MW Flexicycle Power Plant will help Senegal Lower Energy Costs and Integrate More Renewable Energy

 RECIPROCATING ENGINES - WORLD

·         PERU: MAN Diesel & Turbo and Telemenia supply the "Island in the Jungle" with Energy

·         RUSSIA: GE Signed a Large Supply Agreement for Jenbacher Gas Engines in Russia

BUSINESS

·         MHPS Americas Launches New Power & Energy Solutions Business

·         MHPS and PWPS Join Forces to Form Turbomachinery Powerhouse

·         GE's Advanced Gas Path Upgrades Generate $775 Million in Total Customer Value Annually

To register for the May 23 webinar click on Free Market Webinars

$180 billion Market for Combust, Flow and Treat for Gas Turbines

Operators of simple cycle and combined cycle gas turbine plants will spend $180 billion per year for hardware, consumables, instrumentation and services on an annual basis over the next 10 years.

The industry capacity worldwide will only be growing at 3 percent per year. However, there will be upgrades to improve efficiency and meet environmental regulations plus replacement of valves, pumps and other hardware which bring yearly expenditures for outside services and hardware to $180 billion /yr.

Some of the key findings in the McIlvaine research for several services is

·       Gas turbine capacity will grow faster than coal capacity but installed coal capacity will continue to exceed that of gas.

·       Solar and wind capacity will grow at a faster rate than gas but will still account for a minority share of world generation capacity.

·       New materials and components can be acquired to improve plant efficiency and reduce costs even in a frequent cycling environment where flow accelerated corrosion and other challenges are encountered.

·       A number of simple cycle plants will be upgraded with a steam cycle.

·       Zero liquid discharge wastewater systems are being employed where water is scarce and or discharge emission limits are stringent.

·       Municipal wastewater will be increasingly used as a water source.

·       The valve and pump opportunity at existing plants when including both replacements and repairs will be six times greater than the new plant opportunity.

·       Problems such as encountered with desuperheaters will require substantial investment.

·       Costs of new SCR and replacement catalyst will be significant.

·       Third party O&M of gas turbine power plants will accelerate based on low cost of sensors, wireless transmitters and improving value of data analytics.

·       The largest power plant owners and third-party operators will account for most of the purchases.

Details on the future markets and identification of existing plants and tracking of new projects is included[RM1] [RM1] in  59EI Gas Turbine and Reciprocating Engine Supplier Program

A decision program for feedwater and wastewater treatment for gas turbine plants is included in 59D Gas Turbine and Reciprocating Engine Decisions

The opportunity for remote O&M and advisory services  is analyzed in N031 Industrial IOT and Remote O&M

For information on custom reports contact Bob McIlvaine at rmcilvaine@mcilvainecompany.com 847-784-0012 ext. 112

Accurate Forecasting of the Combust, Flow and Treat Markets Would Cost $2 billion

Detailed and accurate forecasting of the Combust Flow and Treat (CFT) market is very expensive.  A big investment cannot be justified just to ascertain whether a market could be promising. The casual inquirer can benefit from relatively inexpensive reports to indicate whether detailed study is desirable.  However, a supplier who should be basing his business plan around accurate forecasting can afford and should invest in the appropriate research.

A company with a superior dissolved oxygen monitor paid McIlvaine Company $100,000 just for a study relating to that device.  For just $4500 they could have purchased the McIlvaine IIoT and Remote O&M report with forecasts for control, guide and measure including a segment on liquid measure with 10,000 forecasts.  Rather than use the report to guesstimate the DO opportunity the company realized the value in the greatly improved accuracy of a focused report.  When you consider that this is just one of 20,000 or more niches in the CFT industry the cost for accurate forecasting of all segments would be more than $2 billion.

The McIlvaine Company has many published market reports on various aspects of the market for CFT hardware, consumables, and instrumentation.  These standard reports range from $3000 to $5000/yr and are continually updated. Some have been continually updated and revised for 40 years.  How accurate are they compared to alternatives?  The best evaluation tool is to chart the inaccuracy level   Actual/ estimate for both the total forecast and for a 1 percent segment for the various alternatives.

Over the last few years there has been a large increase in the number of reports available on CFT subjects.  Some are just extractions of investor presentations by CFT companies and they mix apples and oranges by combining forecasts for products which would seem to be part of one market (home furnace electrostatic precipitators vs industrial) but when lumped together are not valuable to purchasers.  These reports are therefore subject to a 400 percent inaccuracy level for the total numbers and infinitely large inaccuracies for a 1 percent segment.

Another category would be highly respected reports published every year or two and widely quoted by CFT companies in their investor presentations.  These reports are top down analyses with reliance on industry and government statistics plus interviews which give a consensus perspective.  One of the problems with consensus is that it can be wrong or inapplicable.   History books report that 20 million Chinese were killed by the Japanese in the early occupation years.  The truth is that this number was just fabricated as part of a publicity release to gain sympathy for the Chinese resistance.

One highly respected publisher of a CFT report was acquired by another.  The first revised report by the new company showed a Chinese market much higher than the previous report.  This is one of the risks of top down forecasting.  There may have been only a 20 percent difference in the world numbers but a 100% difference in the Chinese numbers. Nevertheless, these reports have an accuracy level high enough to make them valuable for the casual inquirer or for the advocate who is looking for a source to confirm the attractiveness of his plan.

Many firms commission management consultants to provide very detailed analyses of CFT subjects. These consultants can charge hundreds of thousands of dollars for one report.  The problem is that the most capable general consultants do not have the knowledge to execute bottom up analyses.  No matter how many interviews are conducted the results are not going to be as reliable as can be accomplished with bottom up forecasting.

The McIlvaine reports benefit from liberal inclusion of bottom up forecasting but still include substantial top down forecasting to maintain a competitive price.  The question the would-be purchaser should ask is whether a 10 percent inaccuracy in the total numbers and a 100 percent or higher inaccuracy on a 1 percent segment is the right balance between cost and value.

Most suppliers have a Serviceable Obtainable Market (SOM) which is only a portion of the Serviceable Available Market (SAM).  Furthermore, many of their investment and management decisions will be built on their understanding of some of the 1 percent segments and not just the whole. These are the typical McIlvaine clients for custom research.  Projects are often based on a McIlvaine multi-client report as a foundation and then detailed investigation of selected narrow market segments to provide the actionable information needed.

The McIlvaine goal is to bring down the cost of bottom up forecasting.  The Advanced Forecasting initiative is to determine all the bottom level intelligence in a manner which can be used for all detailed forecasting.  This means evaluating each process in each industry and determining the present and future use of each combust, flow and treat product. This has been accomplished for all CFT products in coal fired boiler markets based on determining the capacity in megawatts (MW) of each plant around the world. Then factors relating to the market per MW are created for new, replace and repair sub segments.   A similar effort has been made for gas turbines.

McIlvaine has made great progress in other industries where the variation from plant to plant is minor. This includes semiconductors, pulp and paper, steel making and refining.  It is a greater challenge in mining, but it can be done by just segmenting by ore type.  The food and pharmaceutical industries are more challenging.

The bottom up understanding is most difficult to obtain in the chemical industry where there are large numbers of processes to create a wide variety of end products. McIlvaine is approaching this segment by segment and has recently analyzed the processes and operators in chlorine, isocyanates, urea, nitric acid and fertilizers. The bottom level output is the projected capital and installed investment in each major plant in each industry segment. So, a company such as BASF has to be dissected based on its production of TDI as well as other major chemical products.

For more information on the multi-client market reports click on http://home.mcilvainecompany.com/index.php/markets

For more information on Advanced Forecasting and a 5-step business program click on www.mcilvainecompany.com

For questions about custom consulting contact Bob McIlvaine at rmcilvaine@mcilvainecompany.com 847 784 0012 ext. 112

Power Plant Cross Flow Membrane Revenue Opportunity to Exceed $1.2 billion by 2025

Power plants around the world are increasingly turning to contaminated water and seawater as a water source.  They are also widely adopting zero liquid discharge designs to recirculate rather than discharge wastewater.  Cross flow membranes are used extensively for both water and wastewater treatment in power plants. By 2025 this opportunity will exceed $1 billion segmented as follows.

The following factors will shape the market

·       Many of the new power plants will be in Asian countries without large fresh water resources.

·       Desalination for drinking water is being combined with water for power plants.

·       Zero liquid discharge retrofits are being implemented in China, the U.S. and other countries where water discharge emission limits have become more stringent.

·       Most power plants are within 100 miles of a major municipal wastewater plant.

·       Treated municipal wastewater use in power plants is frequently the lowest cost option.

·       Large power plants in the Middle East are being built with reverse osmosis seawater desalination for both power and drinking purposes.

·       The cost of cross flow membrane technology is shrinking.

·       All power plants use a combination of RO, UF, and MF to treat boiler feedwater.

·       The power generated from coal, natural gas and nuclear will continue to increase.

·       The opportunity for remote monitoring and advisory services will be substantial.

·       There will be a $300 million market for balance of system components such as pumps, energy recovery, valves, piping and engineering.

·       15 major power plant operators will purchase 55% of all the cross-flow membrane products.

Details on the world markets for cross-flow equipment and consumables are found at N020 RO, UF, MF World Market

Details on existing and proposed coal fired plants and nuclear plants are included in 42EI Utility Tracking System

Details on gas turbines and combined cycle plants are found at 59EI Gas Turbine and Reciprocating Engine Supplier Program

A  decision program for feedwater and wastewater treatment for coal fired plants is included in 44I Coal Fired Power Plant Decisions

The opportunity for remote O&M and advisory services for membrane systems is analyzed in N031 Industrial IOT and Remote O&M

For information on custom reports contact Bob McIlvaine at rmcilvaine@mcilvainecompany.com  847-784-0012 ext. 112

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