Market Challenges And Opportunities
Single Shaft Turbine Market Drivers
- Increasing electricity demand: The global electricity demand has been increasing steadily over the past few decades, driven by population growth, rapid urbanization, industrialization, and economic development. This rising electricity demand is a major driver for the single shaft turbine market, as turbines are essential components in power generation. For instance, the global electricity demand grew by over 25% in the last decade reaching over 23,000 TWh in 2020. Countries like China and India are witnessing massive growth in electricity consumption. To meet the rising power demand, governments are focused on increasing power generation capacities, which is subsequently driving the adoption of turbines including single shaft variants. In October 2022, SKF is a well-known global supplier of bearings, seals, lubrication systems, and other engineering solutions and Chinese wind turbine manufacturer, Goldwind have teamed up to construct SKF's initial smart energy and carbon management system in its Dalian factory, China.
- Technological advancements: Recent technological advancements are driving the adoption of advanced and efficient single shaft turbine designs. OEMs are developing innovative turbine models with improved materials, aerodynamic profiles, digital capabilities, and automation to enhance efficiency, output, and reliability. For example, advanced blade coatings, directional solidification of blades, and integrally-bladed rotors are some innovations that have improved turbine performance. Advanced monitoring, diagnostics and control systems have also enabled predictive maintenance, reduced downtime, and enhanced the turbine lifespan. Such technology enhancements have made single shaft turbines more viable and accelerated their deployment.
- Supportive government policies: Favorable government policies and initiatives for clean energy adoption, upgrading of aging power infrastructure and investments in the energy sector are facilitating single shaft turbine installations globally. Policies like renewable purchase obligations, tax incentives, preferential tariffs and auctions are promoting renewable energy capacity additions. This is driving wind turbine deployment. Also, initiatives around modernizing power generation assets and expansion of electricity access are aiding single shaft turbine uptake. For instance, India aims to achieve 175 GW renewable energy capacity by 2022. Such ambitious plans are catalyzing the turbine demand.
- Rapid industrialization: Rapid industrial development and economic growth across developing economies is fueling electricity consumption in the industrial sector. Industries account for over 40% of the global electricity consumption. Expanding manufacturing activities, rising industrial investments and increasing mining, metal and cement production are escalating electricity usage in industries. This is creating substantial demand for power generation equipment like single shaft turbines. For example, industrial electricity demand in non-OECD Asia is projected to grow at over 5% annually through 2040. This will drive significant turbine adoption.
Single Shaft Turbine Market Opportunities
- Hybrid power generation: The adoption of hybrid power systems integrating conventional and renewable energy offers significant growth opportunities for single shaft turbines. Hybrid power plants that leverage natural gas and steam turbines along with renewable sources like solar, wind and energy storage provide clean, reliable and affordable power. Single shaft turbines are well suited for such hybrid systems owing to modularity, flexibility and efficiency. With many countries aiming to balance renewable energy growth with grid stability, hybrid generation is gaining prominence. For instance, GE's hybrid power projects in Turkey combine gas turbines, steam turbines, and batteries.
- Distributed power generation: The rising trend of distributed power generation via rooftop solar, small gas turbines and microgrids provides opportunities for compact single shaft turbine adoption. Distributed systems require modular turbines that can efficiently generate power in small capacities. Single shaft turbines can fulfill such needs owing to customizable configurations, limited footprint and rapid installation. This allows using them in small-scale projects. For example, microturbines with single shaft designs are gaining traction for onsite distributed generation. Global distributed capacity is expected to grow from 394 GW in 2020 to 1,852 GW by 2030. For instance, in February 2021, GE has declared the inaugural commercial use of GE’s 9HA.02 Technology worldwide at Southern Power Generation’s Track 4A Power Plant in Malaysia.
- Repowering of aging plants: The repowering and upgrading of aging fossil fuel plants by replacing old equipment with modern, high-efficiency turbines will spur the single shaft turbine demand. Old power plants are opting for repowering to extend operational life and improve efficiency. This involves turbine fleet modernization. Single shaft turbines offer compact designs and flexibility that make them suitable for repowering projects compared to traditional multi-shaft variants. Regional policies facilitating repowering of aging plants provide incentives for new turbine installations such as single shaft models.
- Offshore wind expansion: The offshore wind power sector offers substantial opportunities for single shaft turbine adoption owing to large-scale project capacities and turbine size requirements. Offshore environments demand turbines with compact and lightweight nacelle designs not requiring gearboxes. This makes single shaft turbines apt for such applications. Offshore wind installed capacity is projected to grow from 34 GW in 2019 to 234 GW by 2030. Key regions driving this growth include Asia Pacific, Europe, and North America Major turbine OEMs are introducing large single shaft offshore turbine models to tap this segment.
Single Shaft Turbine Market Restraints:
- High initial and maintenance costs: The high costs associated with single shaft turbine projects related to equipment, logistics, installation, and maintenance remains a key challenge. The raw material, manufacturing and transportation costs contribute to high capital costs, especially for large utility-scale turbines. Maintenance costs are also substantial owing to precision equipment needs, frequent inspections, and occasional major overhauls. For smaller consumers, these high costs can prohibit adoption. However, costs are gradually declining with technology maturation, localization, and scale advantages. Efforts toward technology maturation, economies of scale, and localized production contribute to gradually alleviating the burden of high initial and maintenance costs. These trends are making single shaft turbine projects more financially viable, potentially improving their accessibility to a wider range of consumers or industries interested in adopting cleaner energy solutions. As such, while cost remains a notable challenge, ongoing advancements and market developments are gradually addressing and mitigating this restraint, making the technology more competitive and accessible.
- Grid integration challenges: Integrating large-scale single shaft turbine capacities poses grid stability and management challenges, restraining uptake. The intermittent and variable nature of renewable energy from wind and solar plants powered by single shaft turbines makes grid integration complex when capacity additions are significant. It requires major transmission system investments and grid modernization. Weak grid infrastructure in emerging economies further amplifies integration issues. Although solutions like battery storage are easing integration, challenges persist. Counterbalancing these challenges, ongoing advancements in grid technology are progressively addressing integration issues. Grid modernization efforts, including the adoption of smart grid solutions, enable better management and balancing of renewable energy inputs. Advanced grid control systems and predictive analytics help anticipate and manage fluctuations, enhancing grid stability.
- Lengthy approval cycles: Long permitting, planning and approval procedures due to extensive environmental impact assessments and grid integration studies delay single shaft turbine projects. Onshore and offshore wind farms often face long development timeframes to get permits and approvals before construction can begin. Local community concerns regarding noise and visual impacts also contribute to lengthy approval cycles in some regions that act as headwinds for project execution and turbine demand. However, favorable policies are improving approval timelines.
Restraints & Challenges:
- High initial and maintenance costs
- Grid integration challenges
- Lengthy approval cycles
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