Hot Topic Webinar Yesterday (March 10) provided Analysis of the $40 Billion Gas Turbine Market

Debbie Fox and Bob McIlvaine were the presenters at the Gas Turbine Markets Hot Topic Hour yesterday. Each brought some historical perspective. Debbie is the editor of the McIlvaine gas turbine publications. At the time of the Kyoto protocol meetings in Japan she was present as an environmental attorney representing one of the oil companies. So she has watched the global warming initiative develop for several decades.

Bob McIlvaine founded the McIlvaine Company at the time of the oil crisis in 1974.  Soon after that he started a publication which was the predecessor of the current Gas Turbine E-Alert. At the time, the concept of a gas turbine to generate electricity in the U.S. instead of coal-fired power was inconceivable. The original name of the publication was Coal Gasification and Liquefaction.

As the oil crisis waned, and funds for coal conversion disappeared the scope was expanded and became “Advanced Fuels Technology.”  The coverage of gas turbines eventually became the sole focus.

Broad perspective is highly desirable when attempting to forecast the markets for gas turbines and components. IPP operators who built gas turbine power plants circa 2000 learned this lesson the hard way. The information on coal gasification has suddenly become very relevant to the gas turbine market.  China just started construction of a $20 billion pipeline to transport gasified coal from the North to all the major cities across the country. If the full program proceeds as planned there will be many new turbines utilizing this fuel source.

Marilyn McIlvaine heads up the renewable efforts for the company. There are shuttered gas turbine plants in the U.K. which may be restarted due to the low cost of gas and the high cost of offshore wind. Gas turbines complement wind and solar. Frequent cycling of the plants is now common. This creates lots of problems including Flow Accelerated Corrosion (FAC). The McIlvaine involvement with pumps and valves provides perspective on meeting some of the cycling challenges.

Most of the discussion yesterday was on the market size for systems and components.
 

The final power point covers the program which McIlvaine recommends to the suppliers. 

The value proposition is the first clue. Why will the product reduce the total cost of ownership more than the competitor’s product in each specific industry and process within that industry?  Muscle is a big promotional investment claiming superiority. Knowledge is creditable facts and research which is organized and available to those who can best use it.

The second clue is the specific market potential in each geography, industry and process.  Muscle is top down guesstimates based on a myriad of statistics and assumptions.  Knowledge is the bottoms up analysis of each industry and process

The third clue is the identification of projects and customers.  Large customers and large projects represent a major portion of the market.  They need to be identified long before the typical sales lead would be received.  Within the purchasing entity there are behind-the-scene decision makers who are very important. To increase market share it is important to reach these individuals.

The fourth clue is a coordination.  Management, engineering and sales should all be involved in creating value propositions for each product in each industry. Market forecasts should be in sufficient detail to create quotas or targets for each sales territory.