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Australian Market for Power Generation in Mining Industry
Frost & Sullivan, Oct 2011, Pages: 101
This research service provides an analysis on the power generator sets market and the associated services market in the mining sector. The research service begins with a comprehensive overview on the Australian mining sector that includes the capital expenditure trends, consumption trends, major drivers and restraints for the industry, and PEST analysis. The research service also analyzes the total mining power generation market drivers and restraints; revenues forecasts, revenues forecast discussion, market share, competitive structure, and competitive factors discussion, for both generator sets market and associated services markets.
Market Overview
Sustained Mining Boom Boosts the Demand for Power Generators and Services
The mining industry in Australia, a significant contributor to the nation’s economy, has been growing at an unprecedented rate in the past three to five years. The increase in mining activities speeds up power consumption and the ‘wear and tear’ of generator sets, consequently resulting in higher demand for replacement sales and services. Besides the opening of new mines, redevelopment and expansion of the capacity of existing mines also drives the demand for power. As the remote location of many Australian mine sites require onsite power generation to provide power. This mature market is likely to grow at a compound annual growth rate (CAGR) of 6.7 per cent from 2010 to 2016.
The clamour for commodities in emerging economies as well as soaring mineral commodity prices has impacted the largely demand-driven power generation market. “The rising demand for mineral resources from developing countries such as Brazil, Russia, India and China (BRIC) has given a leg up to the Australian mining industry,” says the analyst of this research. “Consequently, the power generation market in the Australian mining industry is likely to witness higher influx of participants and revenues.” Based on the data from the Australian Statistics Bureau, the capital expenditure in the mining industry grew from A$6.50 billion in 2006-2007 to A$10.80 billion in 2009-2010. The income from sales and services of primary commodities has witnessed a CAGR of 15.2 per cent from 2001-2002 to 2009-2010. Diesel generator sets dominate the market share due to their lower initial costs and the ready availability of fuel. Simultaneously, the sales of gas generator sets are increasing due to the development of gas pipelines, use of methane gas at coal mines, lower environmental footprint of gas and proposed carbon taxation.
Coal Seam Gas Utilisation and Competitive Pricing Ensure Sustainability for Generator Sets Suppliers
Mining companies that largely rely on diesel to fuel energy requirements will be significantly affected by the introduction of the carbon tax, an emission-based tax, proposed by the Australian Federal Government in March 2011. The proposed carbon taxation is expected to encourage mining companies to accelerate the adoption of renewable energybased generation, mainly photovoltaic and wind energy. This solution to reduce the carbon footprint may considerably restrain the demand for generator sets. “However, power generation companies can still feel optimistic due to Australia’s rich deposit of coal seam gas (CSG),” notes the analyst. “Optimal utilisation of CSG is considered an effective way for coal mines to offset the greenhouse gas emission cost.”
Apart from the higher uptake of renewable energy, the expansion of power grids and cheaper imports from China will also compel the market participants to rethink their business strategies. The Chinese generator sets’ suppliers are gaining more control and exerting a strong influence over investment trends in the Australian mining industry. They offer lower-priced products at compromised quality, which leads to a price war, and ultimately, lower market revenues. Offering energy-efficient generator sets at competitive prices, as well as maintaining close relationships with key project stakeholders, will help suppliers to gain a competitive edge in the market. Direct consultative sales will also enable suppliers to establish a sustainable relationship with project owners and stay a step ahead in this highly concentrated market.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Power generator sets
- After services
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