Microturbines: Opportunities, Barriers

NavigantMicroturbines are classified as a distributed generation (DG) technology that consists of an electric generator coupled with a prime mover and fueled by gaseous fuels. According to Navigant Research, today microturbines are mostly used for remote power applications in the oil & gas industry and for combined heat and power (CHP) or combined cooling, heating, and power (CCHP) applications in the commercial, industrial and residential high-rise markets.

According to Navigant Research’s report, “Microturbines,” the systems are typically available in sizes ranging from 30 kW to 250 kW. Microturbines offer two major advantages in the DG market: low emissions and low maintenance. Fueled primarily by natural gas (low pressure or high pressure) – but also compatible with landfill gas, biogas, digester gas, associated gas, propane, and diesel – microturbines represent an expensive yet extremely reliable solution for continuous power applications.

In general, there are four primary drivers for microturbine adoption:

  • High cost of grid electricity and low cost of gas or availability of a free fuel source.
  • Demand for onsite power generation
  • Environmental standards (whether personal or mandated) that may incentivize the use of microturbines as one of the cleanest fossil fuel-burning technology options.
  • Demand or need for continuous power generation in backup applications.

Barriers limiting the adoption of microturbines include high capital cost, cheap grid power, competition from reciprocating engines, and access to the natural gas grid.

Although the global microturbine market has experienced steady historical growth, calendar year 2014 was a down year for microturbine sales due to reduced demand in the oil & gas market. Capstone Turbine, the industry’s largest manufacturer, reported a compound annual growth rate of roughly 25 percent in terms of revenue for the 5 years ended March 31, 2014.

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