North American Steam Power Plant Service Market

This Frost & Sullivan research service titled North American Steam Power Plant Service Market provides forecasts in terms of revenues from a service provider group, end-user and regional perspective and analyzes the current context in which this market is performing. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: gas turbines and power plants.

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Market Overview

Ageing Equipment and Technological Enhancements Ensure Growth on an Even Keel for the North American Steam Power Plant Service Market

Until now considered a secondary activity for turbine original equipment manufacturers (OEMs), the servicing of power plants has evolved into a fast-growing opportunity for manufacturers and independent service providers in North America. Volatile fuel prices, the anticipated growth in energy demand, technological advancements, and the increment in capital costs for new constructions are the factors expected to impact the future prospects of the market. After witnessing slow development for many years, the market is now building momentum thanks to ageing of the existing infrastructure and the expected increment in the installed capacity. "The need to maintain acceptable power outputs from ageing plants and to lengthen their life cycles increases the opportunities for service providers to offer their solutions," notes the analyst of this research service. "On the other hand, ageing will result in the need for acquisition of new equipment, which is likely to increase the addressable market for these services."

In terms of the political and regulatory context, the Renewable Portfolio Standards provide the backdrop for future competition, where participants that successfully address the needs of diverse energy generation sources will be offered the opportunity to expand their customer base. Environmental concerns are also shaping market direction as the need for the reduction of the carbon footprint has encouraged plant owners to explore cost-effective emission reduction measures. To survive in this business landscape, providers must offer specialized services capable of optimizing efficiency and low-cost operations.

Lack of Skilled Labor Proves to Be a Major Stumbling Block

Independent power producers and merchant power plants account for the largest share of revenues in the steam power plant service market. The industrial sector is expected to expand its market share in the long term. "Increased use of waste and biomass for steam generation enhances market potential," says the analyst. "The projected growth of biomass projects in industrial sites provides new opportunities for servicing, as new project owners lack the necessary skilled labor to maintain and operate them." The lack of skilled labor is one of the greatest challenges for service providers, preventing them from servicing larger fleets. This phenomenon will pervade the entire market, and independent service providers are addressing this issue by providing strong in-company training. Another factor restraining growth in this sector is the replacement of coal projects by gas-driven projects due to the lower capital costs of the latter. This will postpone the expected growth of the addressable market.

The utilities segment affords huge potential for outsourcing in the North American power plant services market. However, the pace of outsourcing is slow at this particular juncture. Companies can exploit the opportunities offered by understanding and providing solutions in accordance with the particular needs of the segment. On-site power generation opens new doors for service providers in this highly attractive segment. Providing a comprehensive portfolio of services is critical for participants to make headway in this space. The integration of additional capabilities and non-conventional services is also necessary to win contracts.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Steam turbines MRO services
• Steam turbine power plant O&M
• Gas turbines MRO services

Technologies

The following technologies are covered in this research:

• Steam turbines
• Steam turbine generators
• Auxiliary generation equipment
• Boilers