The global captive power plant market is expected to grow at a CAGR of more than 5% over the period of 2020-2025. Though the power generation industry is well-established in most countries, the limitations that the utilities have, to provide high-quality power round the clock to the industrial users, forces the industries to establish captive power plants. Moreover, the remote location of some of these industries and the unreliability of the power supply (especially in developing and underdeveloped countries) are the factors promoting the installation of captive power plants. However, factors such as high capital and operational expenditures are limiting the growth of captive power plants in underdeveloped regions across the world.
- Expansion of energy intensive industries in African countries such as Nigeria, Angola, and Ghana is expected to provide a significant opportunity for the captive power plant equipment manufacturers and developers in the near future.
- Asia-Pacific has dominated the captive power plant market, with the majority of the demand coming from China, India, and Japan.
Key Market Trends
Expansion of Energy Intensive Industries to Drive the Market
- Industries require a steady and reliable supply of power to function smoothly. However, one of the key problems that the industries (in many developing and under-developed countries) face is related to power availability and reliability. There is a requirement not just for more power generation sources, but also for a stronger grid.
- Growth in energy-intensive industries, such as the cement, mining and metal processing (iron and steel, aluminum, etc.), and refining and petrochemical, is leading to the rise in the demand for cost-effective and reliable power supply.
- In a bid to meet the rising demand for iron and steel, the number of production plants is expected to increase or would require expansion, resulting in an increased demand for captive power generation.
- There are several new iron and steel projects being developed across the world. For instance, in December 2018, Vedanta Group announced an investment of approximately USD 3 - 4 billion, to set up a 4.5 metric ton steel plant in Jharkhand, India.
- Similarly, in 2018, several Chinese companies pledged an investment of USD 2.3 billion in Bangladesh, USD 2.54 billion in Indonesia, and USD 3 billion in the Philippines, for the construction of new steel plants. Similar investments are also expected to increase across several other countries, resulting in an increased demand for captive power generation in the coming years.
Asia-Pacific to Dominate the Market
- Asia-Pacific is expected to dominat the captive power plant market in 2019, and is expected to continue its dominance in the coming years as well. Factors such as growing population, rapid urbanization, and industrialization are driving the power demand in the region, creating significant opportunities for capacity expansion.
- With its Make in India reforms, the Indian government continues to reduce barriers and regulatory limitations on foreign investment, which, in turn, is helping in strengthening the industrial and manufacturing sectors over the coming years.
- As of December 2018, India had a refining capacity of 249.366 million metric ton per annum, significantly higher than the domestic demand. However, the country’s demand for oil is expected to almost double during 2017-2030. To meet the growing demand, the government plans to increase the refining capacity by 77% by 2030, and the growth of the refining sector in the country is expected to drive the demand for captive power requirement during the forecast period.
- Furthermore, the rising consumption and decline in global crude prices are expected to offer strong support to the country's refining sector.
- Similarly, Southeast Asian countries such as Vietnam, Thailand and Indonesia and enhancing their industrial capabilities which, in turn, is expected to drive the demand for captive power plants in the region during the forecast period.
The captive power plant market is consolidated. Some of key players in this market include Kohler Co., General Electric Company, Wärtsilä Oyj Abp, ADC LLC, and PBS Group.
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Table of Contents
1.2 Market Definition
1.3 Study Assumptions
4.2 Market Size and Demand Forecast in GW, till 2025
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.6 Supply Chain Analysis
4.7 Porter's Five Forces Analysis
4.7.1 Bargaining Power of Suppliers
4.7.2 Bargaining Power of Consumers
4.7.3 Threat of New Entrants
4.7.4 Threat of Substitutes Products and Services
4.7.5 Intensity of Competitive Rivalry
5.1.1 North America
5.1.4 South America
5.1.5 Middle-East and Africa
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Kohler Co.
6.3.2 General Electric Company
6.3.3 Wartsila Oyj Abp
6.3.4 Siemens AG
6.3.5 Cethar Limited