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North American Steam Power Plant Service Market
Frost & Sullivan, December 2008, Pages: 58
The North American Power Plant Services Market is intimately related to the situation of the power generation equipment and to the growing energy demand in this region. After Years of performing as a secondary activity for turbine OEMS, the servicing of power plants in North America has become a fast growing opportunity for manufacturers and independent service providers in the region.
Market Overview
Ageing Equipment and Technological Enhancements Ensure Growth on an Even Keel for the North American Steam Power Plant Service Market
Until now considered a secondary activity for turbine original equipment manufacturers (OEMs), the servicing of power plants has evolved into a fast-growing opportunity for manufacturers and independent service providers in North America. Volatile fuel prices, the anticipated growth in energy demand, technological advancements, and the increment in capital costs for new constructions are the factors expected to impact the future prospects of the market. After witnessing slow development for many years, the market is now building momentum thanks to ageing of the existing infrastructure and the expected increment in the installed capacity. “The need to maintain acceptable power outputs from ageing plants and to lengthen their life cycles increases the opportunities for service providers to offer their solutions,” notes the analyst of this research service. “On the other hand, ageing will result in the need for acquisition of new equipment, which is likely to increase the addressable market for these services.”
In terms of the political and regulatory context, the Renewable Portfolio Standards provide the backdrop for future competition, where participants that successfully address the needs of diverse energy generation sources will be offered the opportunity to expand their customer base. Environmental concerns are also shaping market direction as the need for the reduction of the carbon footprint has encouraged plant owners to explore cost-effective emission reduction measures. To survive in this business landscape, providers must offer specialized services capable of optimizing efficiency and low-cost operations.
Lack of Skilled Labor Proves to Be a Major Stumbling Block
Independent power producers and merchant power plants account for the largest share of revenues in the steam power plant service market. The industrial sector is expected to expand its market share in the long term. “Increased use of waste and biomass for steam generation enhances market potential,” says the analyst. “The projected growth of biomass projects in industrial sites provides new opportunities for servicing, as new project owners lack the necessary skilled labor to maintain and operate them.” The lack of skilled labor is one of the greatest challenges for service providers, preventing them from servicing larger fleets. This phenomenon will pervade the entire market, and independent service providers are addressing this issue by providing strong in-company training. Another factor restraining growth in this sector is the replacement of coal projects by gas-driven projects due to the lower capital costs of the latter. This will postpone the expected growth of the addressable market.
The utilities segment affords huge potential for outsourcing in the North American power plant services market. However, the pace of outsourcing is slow at this particular juncture. Companies can exploit the opportunities offered by understanding and providing solutions in accordance with the particular needs of the segment. On-site power generation opens new doors for service providers in this highly attractive segment. Providing a comprehensive portfolio of services is critical for participants to make headway in this space. The integration of additional capabilities and non-conventional services is also necessary to win contracts.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Steam turbines MRO services
- Steam turbine power plant O&M
- Gas turbines MRO services
The following technologies are covered in this research:
- Steam turbines
- Steam turbine generators
- Auxiliary generation equipment
- Boilers
Table of Contents:
1. Executive Summary
1.1 Market Overview
1.2 Major Research Findings
1.3 Major Conclusions and Recommendations
2. North American Power Plant Service Revenues Forecasts and Market Analysis
2.1 Market Overview
2.2 Market Forecasts
2.3 Market Analysis
3. North American Power Plant Service Market Trends
3.1 Key Market Trends
3.2 Pricing Analysis
3.3 Contract Analysis
4. North American Power Plant Service Market Share and Competitive Environment Analysis
4.1 Market Share Analysis
4.2 Competitive Environment Analysis
4.3 Major Conclusions and Recommendations
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