Pump Demand in Power Generation

The growing demand for energy across the globe is fueled by a number of factors that tackle the needs of an increasing population and rising standards of living. To satisfy the constant growth in demand and respond to modern climate change and sustainability pressures, the industry continues to pursue new clean technologies, smart grid applications and energy mix. However, coal will remain the dominant fuel source, accounting for nearly 35 percent of power generation in 2030. While gas-fired capacity sees a higher growth rate, coal-fired capacities maintain high growth in emerging regions, specifically China and India. The demand for coal is expected to rise until 2015, after which a slight decline will occur as emerging countries diversify their fuel mix. Following this trend, European imports of coal will decrease after 2015 to move to natural gas. While North America and Europe move toward carbon reduction by decommissioning coal-fired capacities, emerging countries will continue relying on coal. In an attempt to diversify fuel sources, nuclear power offers a low-carbon alternative. This is pushing some countries to invest in nuclear power. With a number of projects across Asia, nuclear power will expand strongly in this region despite the Fukushima incident. In some countries (such as Germany), nuclear power plants are scheduled to be phased out. However, nuclear power is expected to contribute about 13 percent of the power generated by 2030.

Oil and coal use is declining as developed countries phase these out and replace existing installations with cleaner and more flexible gas-fueled plants. Gas-fired additions will be massive in the Middle East during this decade, but they will then decline as high economic and population growth is curtailed and the fuel mix diversifies. In a number of regions—such as India, China and other Southeast Asian countries—growth of gas-fired capacities will be greater after 2020 because of an increasing need for a more flexible power generation system. China will witness the largest capacity for growth of all regions during the period of 2010 to 2030, adding a combined 132 gigawatts (GW) of new gas capacity. Renewable energy is expected to grow strongly worldwide as countries look to limit fossil fuel emissions to comply with international agreements on climate change and support a green economy. Further, the reduced prospects of nuclear power in some regions will be an added drive to renewable energy growth. While hydropower is the largest renewable energy technology—representing 57 percent of the renewable electricity production in 2010—non-hydro renewables (wind, solar, biomass, geothermal and marine) are also increasing their share in power generation. China is one of the leading countries in hydropower technology and India is leading in wind power. The developed regions achieving high economic growth see a flat energy use in contrast to the rising energy demand in other regions such as China. Electricity demand between 2010 and 2030 will rise fastest in India, at a compound annual growth rate (CAGR) of 5.4 percent, followed by the Southeast Asian group of nations at 4.5 percent CAGR and China at 3.9 percent. Conversely, the three developed regions of the European Union (EU), North America and the Organization for Economic Co-operation and Development (OECD) Asia-Pacific (APAC) will record relatively anemic demand growth of 1 percent per annum—or less on average—during the period as a stagnant population increases efficient energy use that curtails demand growth. Overall, the Middle East and African growth rates will fall short of those of the leading Asian nations.

Overview

The impact of the recession on the growth of pumps in power generation was minimal because of the global need for power. The continued increase in the demand for power has increased shale gas exploration in North America. These developments provide an impetus for pump demand. Europe remains affected by a number of economic challenges, but the rising need for power enhances the opportunities for more energy-efficient pumps. Key opportunity in the European region is in the replacement of aging facilities with more efficient facilities, to contribute to a 20 percent decrease in emissions according to new regulations imposed. Urbanization in growing global economies contributes to the highest growth in pumps for generating electricity. It is expected that power generation in China will surpass that of North America by 2015. Another region of interest is Africa, where a present shortage of capacities will drive the opportunity for establishing new plants. The largest electricity markets in Africa are South Africa and Egypt. Investments in the power generation industry to meet the demands of the growing global economy will augment growth prospects for pumps. Increasing growth rates in revenue are projected for centrifugal and positive displacement pumps throughout the forecast period from 2012 to 2018 (see Figure 2). Centrifugal pumps have found a larger number of applications in this industry, but positive displacement pumps are projected to grow at a CAGR of 10 percent compared to the CAGR of centrifugal pumps, which is 5.8 percent. Regulations in line with reducing greenhouse gas emissions direct the focus to nuclear and gas-fired power plants, indicating these as growth spots. Furthermore, growing interests in alternative energy sources to counter greenhouse gas emissions are likely to contribute to the growth.