Abstract
Research Overview
Government's Regulatory Framework to Encourage Exploration and Development of Large Gas Turbine Markets
In recent years, prices of natural gas have risen due to steady growth in
demand and insufficient supply. High prices and the inability to find natural
gas at secure locations are the greatest challenges faced by the gas turbine
industry. To protect the environment, the governments in North America have
refrained from developing the vast potential areas of natural gas in Alaska,
the Mountain West on-shore area, as well as off the Atlantic, Pacific, and
Gulf coasts. Therefore, to sustain growth, market participants need to put
pressure on the governments to create conducive environment to tap the
enormous resources of natural gas available in North America. For advancement
of the gas turbine industry, the governments need to provide companies with
greater opportunities to explore resource-rich federal lands that are
currently unavailable as well as create a regulatory framework that encourages
exploration and development to take place more quickly.
Environment Friendliness of Gas Turbines Likely to Drive the Market
Apart from gas turbines being among the cleanest fossil-fueled power
generation equipment commercially available, they have the innate advantages
of very low emission as well as the ability to adapt to any type of fuel. This
environmental friendliness gives gas turbines an edge over competing fuels --
particularly that of coal -- in an era of stringent emission standards. The
advancement in the gas turbine industry is expected to further reduce the
green house gas emissions in the future.
"Since gas turbine technology is mature and proven, manufacturers are likely
to strive to ensure that there are continuous improvements," says the analyst
of this research service. "In fact, many participants are currently engaged in
attempting to improve the efficiency of gas turbines to combat the constant
rise in prices as well as to focus on the usage of alternative fuels."
Technological Advancements and Competitive Pressures to Revive the Market
In 2000, the power industry experienced unprecedented expansion due to over
building of power plants following the electricity deregulation policy by the
U.S. Government. High prices of natural gas and frequent supply disruptions
due to weather anomalies restrained the growth of gas turbines. The gas
turbine market is expected to experience a rise in electricity demand due to
the resurgent economic policy after 2008.
"In the existing circumstances, it is imperative that original equipment
manufacturers (OEMs) focus on continuous technology improvements, as they are
vital in helping market participants achieve higher growth rates in an
environment that is bound to get increasingly intense with the high prices of
natural gas and the increased focus on competing fuels such as coal," says the
analyst. However, efficiency and technology improvements are likely to
continue taking place and are expected to be the key factors in the gas
turbine industry's continued competitiveness.
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