The breakneck economic and infrastructure growth in developing countries is tipping the scales in the power equipment and construction market in their favour. Power generators in these countries prefer domestic equipment makers due to their compliance with local regulations, low costs, and local manufacturing base.
New analysis from Frost & Sullivan, A Changing Global Landscape for the Power Equipment and Construction Market (frost.com/mb11), finds that emerging countries are set to claim a bigger share of the manufacturing pie with installed capacity set to exceed 4.6 terawatt (TW) by 2030. The study tracks the coal, hydro, and gas power plant markets in key regions, and explains the changing power equipment, construction, and regulatory landscapes.
Government support in the form of investments in the power sector has gone a long way in powering the domestic power equipment market in emerging markets such as China, India and South Korea. China, in particular, has been financing overseas power projects in resource-rich nations, driving emerging players’ goods and services to newer geographies such as Africa and South America.
Incumbents originating in the US, Europe, Russia and Japan - that have been ruling the power plant engineering, procurement and construction (EPC) contracting and critical equipment manufacturing segment - are recognizing the power shift from the West to the East.
“Acknowledging the long-term benefits of quality equipment and the importance of having local service facilities, the governments of emerging nations have begun to make technology transfers and local facilities a must for market participation,” observed Frost & Sullivan Energy & Environmental Research Analyst Manoj Shankar. “Traditional players are intensifying focus on partnerships, mergers and acquisitions to access the booming emerging markets while such joint ventures are allowing local manufacturers and service providers to cater to global markets.”
The gas market is dominated by traditional participants. Emerging countries’ higher output of coal and hydro power over the last decade has helped their players gain experience in building coal and hydro power plants. The focus in these two areas, however, has lowered gas power installations and restrained activity in gas turbine technology in the East. Conversely, greater gas power installations in the West and superior technology have helped traditional equipment makers gain larger market shares in the segment.
Going forward, as most utilities are struggling with shrinking budgets and fewer avenues for financing projects, tie-ups with local banks will help in winning projects in developing countries.
A Changing Global Landscape for the Power Equipment and Construction Market is part of the Energy & Power Growth Partnership Service programme. Frost & Sullivan’s related studies include: Global Substation Automation and Integration Market; Global Microgrids (MGs) and Virtual Power Plants (VPPs) Market; and Global Distribution Automation Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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A Changing Global Landscape for the Power Equipment and Construction Market / MB11-14