CC Atacama Chile 740 MW Alstom with 4 GT and 2 ST
Latin America Challenges and Opportunities for Power
Generation: The Question About Gas Turbines X Steam
Turbines?
Lorena Medina, Research Analyst
Gustavo Franca, Research Analyst
Energy & Power Systems
Latin America, March 20, 2007
© 2006 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan.
No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
Focus Points
Introduction: Market Coverage and Definitions
Industry Challenges
- Fuel Specific Challenges
Gas Turbine Market
- Drivers and Restraints
- Market forecast
- Market Trends
- Key Market Players
Steam turbine Market
- Drivers and Restraints
- Market forecast
- Market Trends
- Key Market Players
Market Coverage and Definitions
Market Coverage:
Total Latin America
Sub-regional analysis: Brazil, Mexico, Southern Cone, Andean Region, Central America &
Caribbean Countries
Application: Power Generation
Total Market Segmentation
S te a m T u rb in e
5 M W to 1 0 0 M W
1 0 0 .1 M W to 3 0 0 M W
M o re th a n 3 0 0 M W
G a s T u rb in e
5 M W to 1 5 M W
1 5 .1 M W to 6 0 M W
6 0 .1 M W to 1 8 0 M W
Above 180 M W
Market Coverage and Definitions
• Forecast period: 2006 - 2012
• Base Year: 2006
• Total Market Definition:
•
Segment 1: Total Latin America Gas Turbines & Sub-regional Analysis
•
Segment 2: Total Latin America Steam Turbines & Sub-regional Analysis
• Gas Turbine: Turbine that converts the chemical energy of a liquid fuel into mechanical energy by internal
combustion; gaseous products of the fuel (which is burned in compressed air) are expanded through a
turbine.
• Steam Turbine: turbine that converts energy of high-pressure steam (produced in a boiler) into
mechanical power which can then be used to generate electricity.
• Simple Cycle: Generates only power.
• Combined Heat and Power (CHP) or Cogeneration: a simple-cycle gas turbine with a heat recovery
mechanism recovers heat in the turbine exhaust. The recovered heat is then converted to thermal energy
in the form of steam or hot water.
• Combined Cycle: The high pressure steam is used to generate additional power with a steam turbine.
Major Challenges Gas & Steam Turbines
• Sustaining Economic Growth in the Region
• Lack of Project Financing and Associated Risks Threaten Industry Development
• Create Demand for Higher Power Capacities in the Region
• Nationalization of Energy Sector Trend in Some Countries
Fuel Specific Challenges
Gas Turbines
• The Need to Import Gas by Some Countries
Steam Turbines
• Increasing flexibility and efficiency actuates preference for gas turbines
Major Drivers & Restraints in Latam Gas
Turbines
Drivers
Restraints
• Power Generation sector growth
• High oil and natural gas prices
• Insufficient capacity to meet
increases in energy demand
• Latin America political uncertainty could
have a negative impact on its economy
• Natural gas infrastructure
development
• Lack of natural gas infrastructure
• Oil & gas sector growth
• Increase in Combined Cycle
Power Plants
• Increase in investment
• Government Regulation
• Lack of investments and financing
• Trend towards alternative fuels
Mkt. Forecast - Latin America Gas Turbines
Revenue Projection
Total Gas Turbine Market: Unit Shipment and Revenue Forecasts (Latin America), 2006-2012
Units
Year
Unit
Growth Rate
(%)
Revenues
($ Billion)
Revenue
Growth Rate
(%)
2006
120
---
3.9
---
2007
133
10.6
4.3
10.7
2008
147
10.9
4.8
10.9
2009
169
14.8
5.4
13.2
2010
194
15.0
6.1
13.5
2011
231
18.8
7.1
16.1
2012
275
19.1
8.3
16.6
Compound Annual Growth
Rate (CAGR) 2006-2012:
14.8%
13.5%
Note: All figures are rounded; the base year is 2005. Source: Frost & Sullivan
Market Forecast – Gas Turbines 2006
The total LatAm gas turbine market is valued at $3.9 billion and was
divided among the following sub-regions and output categories:
47%
37%
Central America
5 MWto 15 MW
14%
Andean Region
15.1 MWto 60 MW
Southern Cone
60.1 MWto 180 MW
5%
Mexico
8%
Above 180 MW
Brazil
26%
21%
24%
17%
Note: All figures are rounded. Source: Frost &Sullivan
Note: All figures are rounded. Source: Frost & Sullivan
Market Trends – Gas Turbines
• The gas turbine technology has proven its supremacy over the traditional steam turbine
technology on account of its higher efficiency, operating flexibility, availability of natural
gas resources, and mitigated emissions.
• Most of the development in the higher power capacities, which have high price margins,
is expected to take place in the form of combined cycle power plants.
• Market shares of small gas turbines are expected to continue to dominate the Latin
American market in the short term as distributed energy and cogeneration become more
popular.
• In the short, medium and long term, the 15.1 Mw to 60 MW power range is anticipated to
display in average the largest unit growth rates in the region.
• The gas turbine market in Latin America is not a mature market, which is why higher
growth rates are expected in the long term.
Major Industry Participants Gas Turbines
• GE Energy: Market leader in Mexico, Southern Cone, Andean Region, Central America &
Caribbean
• Siemens: Market leader in Brazil
• Alstom: Strong player in Southern Cone and Brazil
• Mitsubishi Heavy Industries: Strong player in Mexico
• Cat Solar Turbines: market leader in all regions in 5 MW to 15 MW segment
Competitor
GE Energy
Trend 2007
Stable
Siemens
Up
Mitsubishi
Stable
Alstom
Up
CAT Solar Turbines
Stable
Others
Stable
Major Drivers & Restraints in LatAm Steam
Turbines
Drivers
Restraints
• Power Generation sector growth
• Latin America political uncertainty could
have a negative impact on its economy
• Insufficient capacity to meet
increases in energy demand
• Lack of investment and financing
• High oil and natural gas prices
• Trend towards alternative fuels
• Latin American coal availability
• Costs related to coal logistics
• Increase in Combined Cycle
Power Plants
• Rising Carbon-Credit Market Importance
• Increase in investment
Mkt. Forecast - Latin America Steam Turbines
Revenue Projection
Total Steam Turbine Market: Unit Shipment and Revenue Forecasts (Latin America), 20062012
Units
Year
Unit
Growth Rate
(%)
Revenues
($ Million)
Revenue
Growth Rate
(%)
2006
57
---
774.7
---
2007
62
7.8
877.5
13.3
2008
67
8.0
996.2
13.5
2009
80
16.1
1225.4
23.0
2010
96
16.8
1523.0
24.3
2011
123
22.9
2014.1
32.3
2012
161
23.9
2706.1
34.4
Compound Annual Growth
Rate (CAGR) 2006-2012:
18.9%
23.2%
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
Market Forecast – Steam Turbines 2006
The total LatAm gas turbine market is valued at $774.7 million and was
divided among the following sub-regions and output categories:
41%
23%
23%
Central America
5 MW to 100 MW
Andean Region
14%
100.1 MW to 300 MW
Southern Cone
4%
Mexico
Above 300 MW
Brazil
21%
54%
Note: All figures are rounded. Source: Frost & Sullivan
20%
Note: All figures are rounded. Source: Frost & Sullivan
Market Trends – Steam Turbines
• Lower capacity STs (5-100MW)
• Ethanol production in Latin America (specially Brazil) is likely to drive
demand for biomass-fueled steam turbines, especially in mid-long term
• Higher capacity STs (100MW+)
• Rising natural gas prices are expected to increase demand for coal-fired
power plants (especially in Mexico) and steam-tail for Combined Cycle
Power Plants
• Coal reserves in Latin America might maintain the demand for coal-fired
power plants, especially in Mexico
Major Industry Participants in Steam Turbines
• 5-100MW: TGM and NG, Brazilian competitors, are market leaders
• 100-300MW: Alstom is market leader in LatAm
• 300MW+: MHI is market leader in LatAm
Competitor
TGM
Trend 2007
Up
Alstom
Stable
Mitsubishi
Stable
Siemens
Up
NG
Up
Others
Stable
Related Research
• African Gas & Steam Turbines Services and Markets
• North America Steam Turbines Services and Markets
• European Gas & Steam Turbines Services and Markets
• Middle East & North African Steam & Gas Turbines Markets
• Technical Insights: Developments in Gas Turbine Technologies
Planned Topics for Upcoming Year - 2007
• Latin America Renewable Energy Markets
• Latin America Cogeneration Markets
• Primes and Movers at Latin America Oil & Gas Industry
• Latin America Biofuels for Power Generation
• Latin America Coal-Fired Power Plants
• Latin America Power Plants Service Markets
For Additional Information
Jorgelina Peciña
Corporate Communications
Latin America
(5411) 4777-9951
[email protected]
Jorge Hurtado
Sales Manager
Energy Industry
(5255) 5615-7990
[email protected]
Milena Matone
Research Manager
Energy Industry
(5511) 3065-8430
[email protected]