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Power Engineering, Procurement, and Construction (EPC) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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    Report

  • 125 Pages
  • August 2022
  • Region: Global
  • Mordor Intelligence
  • ID: 5120363
The power engineering, procurement, and construction (EPC) market is expected to register a CAGR of more than 3% during the forecast period 2022-2027. The COVID-19 outbreak in Q1 of 2020 significantly impacted the market as growth declined due to the lockdowns imposed. Commodity prices for fossil fuels (including oil, natural gas, and coal) declined due to decreased demand globally, and limitations in personnel mobility slowed project development and implementation of new energy infrastructure across the globe. Factors such as the increases in electricity generation and energy consumption demand and changing power generation industry dynamics are expected to drive demand for the power EPC market. Moreover, investments in the power sector, including increased government spending on renewable energy, are further expected to boost the market. However, the phasing out of coal-based power plants, which account for a major share in power generation around the globe, and volatile crude oil prices leading to delays in several upstream projects are expected to hinder the growth of the power EPC market.
  • The renewables segment is expected to be the fastest-growing segment for the power EPC market during the forecast period, owing to increasing investments and low power generation costs for renewables and the commitment of governments to reduce their reliance on fossil fuel-based power generation.
  • New and efficient technologies like supercritical and ultra-supercritical coal power plants and government initiatives to increase renewable energy’s share are expected to create several opportunities for the power EPC market in the future.
  • Asia-Pacific is expected to be the largest market during the forecast period, owing to the high urbanization growth rate and growing electricity demand, mainly from China and India.

Key Market Trends


Renewable Expected to be the Fastest-growing Market Segment

  • In a bid to reduce greenhouse gas (GHG) emissions and encourage the production of electricity from cleaner energy sources, several countries have been actively promoting renewables and gas-based power generation. Moreover, the global installed renewable capacity increased almost double from 1,226 GW in 2010 to almost 2,799 GW by 2020.
  • According to IEA, on a cost-adjusted basis, investment activity increase was the strongest for solar PV and wind energy for the past five years, which has led to several projects being in the pipeline and expected to be commissioned during the forecast period.
  • Moreover, pledges to cut down emissions by 2050 to a ‘net-zero’ state, governments policies, such as the establishment of Carbon Tax on thermal power plants and establishment of Contracts for Difference (CFD) mechanism in the United Kingdom, coupled with falling cost of equipment and energy storage systems, are expected to further boost the demand for renewable energy globally, in turn, driving the power EPC market.
  • As per the Institute for Energy Economics and Financial Analysis (IEEFA), India is set to attract investments of around USD 500 billion in the renewables sector to achieve the country's target of 450 GW of capacity by 2030.
  • In January 2021, Shell PLC launched its 25 MW Qabas solar plant. The plant is located on a 50-hectare site within the Sohar Free zone in northern Oman and consists of over 88,000 solar modules. It helps in avoiding more than 25,000 ton of CO2 emissions annually.
  • In June 2021, GE Renewable Energy awarded a contract to supply and commission wind power turbines for Continuum Green Energy’s 148.5 megawatts (MW) Bhuj wind park in Gujarat.
  • In January 2022, SJVN (Satluj Jal Vidyut Nigam Ltd) bagged a solar project of 125 MW in Uttar Pradesh through a bidding process held by the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA). It includes a 75 MW grid-connected solar project in Jalaun and a 50 MW solar project in Kanpur Dehat districts.
  • Therefore, with increased investments in renewable energy and awareness of its advantages over fossil fuels, coupled with upcoming projects, renewable energy is expected to be the fastest-growing market segment over the forecast period.


Asia-Pacific Expected to Dominate the Market

  • Asia-Pacific is the regional hotspot for the power EPC market, owing to governmental support, numerous incentives, and national targets. In 2020, the primary energy consumption in the region reached 253.25 exajoules, representing 45.5% of global primary energy consumption.
  • Many countries in Asia-Pacific have inadequate transmission and distribution (T&D) networks, and hence, electricity is not available in some remote and rural areas. To bring electricity to these areas, the countries in the region are investing heavily in building a transmission line network.
  • According to IEA, in 2021, China was the largest market for electricity grids and other infrastructure investments, supported by increased demand for power in the industrial and commercial sectors. Also, China's power transmission and distribution grid has been experiencing major upgrades and modifications to make it capable of transmitting higher electricity and coping with future demand.
  • In 2020, China led global investments in renewable energy capacity, accounting for around 28% of the global total, amounting to USD 83.6 billion. Around 66% of these investments were in the wind sector (onshore and offshore), followed by solar PV (30%), biomass and waste (4%), and small hydropower (0.5%).
  • Furthermore, in 2020, China led the world in terms of total wind and solar energy installed with a total installed capacity of 288 GW of wind energy and 253 GW of solar energy.
  • In India, several power projects are in the pipeline, which is expected to increase the demand for EPC in the region. The coal-fired Patratu power project, with a capacity of 4,000 MW, has been under construction since 2018 in the state of Jharkhand and is expected to be commissioned in 2022.
  • In January 2021, Larsen and Toubro (L&T) won the engineering, procurement, and construction (EPC) contract for the 200 MW project in Gujarat through an e-reverse auction conducted by NTPC Limited. In another auction, L&T won the rights in the e-reverse auction held by the Gujarat State Electricity Corporation Limited (GSECL) to construct a 210 MW grid-connected solar power project in the Jamnagar district of Gujarat.
  • In December 2021, Tata Power received a Letter of Award (LoA) from Solar Energy Corporation of India Ltd (SECI) to build a 100 MW EPC solar project along with a 120 MWh Utility-scale Battery Energy Storage System (BESS). The total contract value of the project is approximately ÌNR 945 crore. The project will be executed within 18 months.
  • Therefore, based on factors like expansions and upgrades and increased power demand, the Asia-Pacific region is expected to dominate the power EPC market.


Competitive Landscape


The power engineering, procurement, and construction (EPC) market is fragmented. The key players in the market include Fluor Corp., KBR Inc., Kiewit Corporation, McDermott International Ltd, Bechtel Corporation, and Saipem SpA, among others.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support


This product will be delivered within 2 business days.

1 INTRODUCTION
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2 RESEARCH METHODOLOGY3 EXECUTIVE SUMMARY
4 MARKET OVERVIEW
4.1 Introduction
4.2 Market Size and Demand Forecast in USD billion, till 2027
4.3 Installed Capacity and Forecast in GW, until 2027
4.4 Primary Energy Consumption, in MTOE, 2010-2021
4.5 Recent Trends and Developments
4.6 Government Policies and Regulations
4.7 Market Dynamics
4.7.1 Drivers
4.7.2 Restraints
4.8 Supply Chain Analysis
4.9 Porter's Five Forces Analysis
4.9.1 Bargaining Power of Suppliers
4.9.2 Bargaining Power of Consumers
4.9.3 Threat of New Entrants
4.9.4 Threat of Substitute Products and Services
4.9.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
5.1 Power Generation
5.1.1 Thermal
5.1.2 Hydroelectric
5.1.3 Nuclear
5.1.4 Renewables
5.2 Power Transmission and Distribution (T&D)
5.3 Geography
5.3.1 North America
5.3.2 Europe
5.3.3 Asia-Pacific
5.3.4 South America
5.3.5 Middle-East and Africa
6 COMPETITIVE LANDSCAPE
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 EPC Developers
6.3.1.1 Fluor Ltd
6.3.1.2 KBR Inc.
6.3.1.3 Kiewit Corporation
6.3.1.4 McDermott International Inc.
6.3.1.5 Bechtel Corporation
6.3.1.6 Saipem SpA
6.3.1.7 Larsen & Toubro Limited
6.3.2 Original Equipment Manufacturers (OEMs)
6.3.2.1 General Electric Company
6.3.2.2 Siemens Energy AG
6.3.2.3 ABB Ltd
6.3.2.4 Schneider Electric SE
6.3.2.5 Eaton Corporation PLC
7 MARKET OPPORTUNITIES and FUTURE TRENDS

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