Natural Gas Fired Electricity Generation Market Analysis Report By Technology, By End Use, By Region And Segment Forecasts From 2020 To 2027

Industry Insights

The global natural gas-fired electricity generation market was 48,793.9 MW in 2019. The market is estimated to register 4.71% of CAGR over the forecast years, 2020 to 2027. Natural gas-fired electricity generation is cleaner and cost-effective. Traditionally, coal has been used in the production of electricity on a large scale. The problem of carbon emission associated with coal-based electricity is driving the adoption of alternative fuel-based electricity, where natural gas is gaining traction for electricity generation. In addition, favorable government initiatives pertaining to the use of natural gas for electricity generation are driving the market growth. Some countries are aiming to replace coal with natural gases for electricity production. The production of natural gas has been on the rise in the United States, owing to advancements in technology required to extract natural from shale gas reserves.

For example, in 2019, the production of natural gas in the United States was 9.8 billion cubic feet per day, a 10% increase from the last year. The easy availability of a large amount of natural gas has increased its use in the generation of electricity. Natural gas is one of the major power-generating sources, occupying approximately 38% of total electricity production as of 2019.

Increasing focus on a cleaner environment is the main reason behind natural gas replacing coal-fired power plants. In addition, increasing the production of natural gas has resulted in its easy availability and low cost. Thus, these factors are projected to supplement the growth of the natural gas-fired electricity generation market.

However, increasing penetration of renewable sources of energy is anticipated to restrain the market growth over the forecast duration. In addition, owing to the lack of infrastructure for natural gas extraction, emerging countries in the Asia Pacific are dependent on coal-based electricity generation, which in turn, further anticipated restraining the market growth.

Technology Insights

Depending on the technology, the market is classified into a combined cycle and open cycle. In 2019, the combined cycle held the highest share in the market with over 78.0% share. A combined-cycle helps increase the overall efficiency of the plant, thereby, gaining traction. Moreover, the combined cycle requires less amount of energy in order to produce the desired amount of output, thereby, it is efficient than the open cycle. The combined cycle is being used mostly in large-capacity power plants.

On the other hand, open-cycle technology extracts air from the atmosphere. The extracted air is compressed into a compressor after which it is fed into the combustion chamber. Therefore, the open cycle works in a way as it is ideal for small-scale installation. However, issues of energy loss associated with the open cycle are estimated to hinder market growth.

End-use Insights

Depending on the end-use, the natural gas-fired electricity generation market is segmented into industrial and power & utility. In 2019, the power & utility segment held the largest share in the market with over 85.0% by revenue. Increasing power demand from commercial, industrial and residential sectors and replacement of coal-fired power generation plants are anticipated to drive the adoption of natural gas-powered power plants’ growth.

On the other hand, the industrial segment is estimated to register considerable growth over the forecast duration owing to the rise in industrial operations across the world. Government supportive initiatives to promote the growth of the manufacturing sector are likely to supplement segment growth. To generate captive power, these units are installed in different industries such as steel, cement, refineries, and chemical.

Regional Insights

In 2019, Asia Pacific accounted for the largest share in the market by revenue with 35.0%. Further, the region is projected to register the maximum growth over the forecast duration. Countries such as Japan and China are significantly contributing to the growth of the region. In addition, stringent regulation by governments to reduce carbon emissions is likely to drive the adoption of natural gases for power generation.

North America, on the other hand, accounted for a considerable share in the market. The rise in shale gas production is supplementing the growth of natural gases for power generation in the region. Besides, the MEA region is anticipated to witness substantial growth owing to the rise in pipeline projects in countries such as UAE, Iraq, and Saudi Arabia. In addition, various countries in the MEA region are focusing on increasing their electricity generation capacity.

COVID-19 Impact Analysis

The market has been adversely affected owing to the COVID-19 outbreak. Such power plants generating electricity require a workforce and a continuous supply of natural gases. However, the pandemic outbreak has resulted in a lack of human resources. Additionally, service providers operating in the market, providing equipment, construction, and commissioning were hit badly owing to the closure of their operations. Moreover, owing to the closure of end-use industries, there has been a significant drop in electricity demand. In addition, market players have reduced their expenditure on research and development amid the economic crisis. Nonetheless, the market is estimated to witness considerable growth over the next few years as the pandemic has led to an increase in energy consumption from residential sectors.

Natural Gas Fired Electricity Generation Market Share Insights

The market is concentrated with a few major companies dominating the market. Some of the market players are engaged in providing services that include construction, equipment, and commissioning. To consolidate their footprint in the market, key players are undertaking several initiatives such as merger & acquisition, joint venture, partnerships, and introduction of new products. Key players operating in the market include Mitsubishi Hitachi Power Systems, Ltd., Ansaldo Energia S.P.A., Siemens AG, and General Electric among others.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels, and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Million Insights has segmented the global natural gas-fired electricity generation market report based on technology, end-use, and region:

• Technology Outlook (Volume, MW; Revenue, USD Million, 2016 - 2027)
    • Open Cycle
    • Combined Cycle

• End-use Outlook (Volume, MW; Revenue, USD Million, 2016 - 2027)
    • Power & Utility
    • Industrial

• Regional Outlook (Volume, MW; Revenue, USD Million, 2016 - 2027)
    • North America
        • The U.S.
    • Europe
        • Russia
    • The Asia Pacific
        • China
        • Japan
        • Thailand
    • Middle East & Africa
        • Saudi Arabia
    • Central & South America
        • Iraq