Annual natural gas (NG) generator set (genset) installations are expected to reach 27.2 GW by 2024 and generate $146.8 billion in cumulative revenue between 2015 and 2024, according to a new report published by Navigant Research.
For the purposes of the report, NG gensets consist of an electric generator coupled with a natural gas-powered prime mover — a reciprocating internal combustion engine (RICE). While NG gensets are not a new technology, they are part of a complex market that is seeing significant changes and growth opportunities. NG gensets are currently the engine of choice for the higher duty cycle stationary power market. They are also gaining ground in backup or standby applications.
The global NG genset market has grown 10 percent annually over the past three to five years. Since 2014, growth has flattened in response to the drop in oil prices. Despite this short-term slowdown, the NG genset market is expected to show healthy growth during the next 10 years. Global growth rates for aggregate RICE genset sales will likely be between 3 percent and 7 percent annually over the next five to 10 years.
Despite the fact that NG gensets have higher maintenance requirements than other prime movers and cannot match the performance of diesel gensets in terms of power output per unit of displacement, they are expected to outpace their diesel and gasoline counterparts. With the increasing popularity of dual-fuel gensets, which offer the performance of diesel while taking advantage of the low price and low emissions of NG, the line between diesel and NG gensets is becoming blurred. In emerging economies, the key obstacle to the spread of NG gensets is a lack of adequate NG infrastructure.
Asia Pacific is expected to lead all regions in capacity installments through 2024, and China is expected to surpass the United States in annual installed capacity by 2023. North America is projected to experience strong growth, benefitting from an enormous domestic supply of cheap NG and stricter regulations on emissions. Europe, due to its sheer size, and the Middle East, due to strong growth, offer lucrative opportunities for NG gensets as well. Collectively, these regions are expected to account for 91 percent of global capacity installments in 2024. Although Latin America and Africa remain relatively immature markets for NG gensets, both regions are expected to benefit over the long term from expanding NG infrastructure. Africa is projected to be the second-fastest growth market behind Asia Pacific.