THERMAL POWER PLANT MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Thermal Power Plant Market Size and Trends

The thermal power plant market is estimated to be valued at USD 1,532.34 Bn in 2024 and is expected to reach USD 1,949.57 Bn by 2031, growing at a compound annual growth rate (CAGR) of 3.5% from 2024 to 2031.

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The thermal power plant market is expected to witness significant growth owing to rising demand for energy across the globe. Many countries are heavily investing in the modifications of existing power plants to reduce carbon emissions. Governments are providing incentives and subsidies and enacting stricter regulations for emission control converting thermal plants to natural gas based to optimize energy production in an environment-friendly manner. This is driving technologies like efficiency improvement, carbon capture, usage, and storage. However, increasing focus on the use of renewable sources of energy worldwide may hamper the growth of thermal power plants.

Rising energy demands

With global energy demands rapidly rising due to industrialization and urbanization occurring all over the world, especially in emerging economies, the needs for stable, abundant, and affordable sources of power generation have also increased significantly. For instance, as per the U.S. Energy Information Administration (EIA), in 2020, coal continued to supply the majority (44%) of India's total energy consumption, followed by petroleum and other liquids, which accounted for 24% of the total energy consumption. Thermal power plants, which mainly use coal, natural gas, or oil as their fuel sources, currently represent the bulk of the global electricity supply and their role is expanding further to help meet this growing appetite for energy. According to estimates, the global energy consumption could rise anywhere between 25% and 50% in the coming decades and maintaining economic growth trajectories in many developing nations will require reliable and sustained access to power. While renewable sources of energy are an important long term solution, fossil fuel-based thermal plants provide the dispatchable base load capacity needed to satisfy persistent around the clock power demands of industrial and residential consumers. Given inherent constraints around the variability and intermittent nature of many renewables right now, thermal infrastructure will continue dominating the global energy mix for the foreseeable future and drive considerable investment into new plant installations and upgrades of existing fleets across geographies.

In the current globalized world which is heavily dependent on trade for meeting essential commodity needs, having strategic control over critical energy resources has become an important priority for nations. While liberalization of power markets has opened up opportunities for international partnerships and fuel imports, many countries are also exploring measures to enhance their self-sufficiency and reduce external vulnerabilities through domestic production and indigenization. Thermal power, being a tried and tested technology, provides an attractive option in this regard given indigenous reserves of coal exist in several countries or can be cost effectively imported from reliable partners. There is a growing focus amongst governments as well as private sector investors on establishing robust indigenous fuel supply chains, local manufacturing capacity for plant components and construction capabilities as a way to counter external supply disruptions and price fluctuations. New indigenous coal mining projects and LNG infrastructure are driving interest in setting up thermal plants alongside to promote energy security. Initiatives around integrated energy parks and dedicated power corridors also aim to decentralize risks and strengthen energy autonomy for nations over the long run.