NEWS RELEASE                                                                                                    JANUARY 2015

$9 Billion NOx Control Market in 2019

Purchases of catalyst and reagents will steadily rise while the sales of equipment will fluctuate over the next four years. Capital and consumable expenditures will exceed $9 billion. This is the conclusion reached in NOx Control World Market published by the McIlvaine Company.

World NOx Control Expenditures ($ Millions)

Subject

2019

 Catalyst

567

 Reagent

3,140

SCR

5,441

 

More than 50 percent of the market will be in China where there has been 20 percent per annum growth over the last ten years.  Power plants will account for the bulk of the revenues with the balance divided among waste incinerators, refineries and other industries.

Chinese suppliers with or without U.S. partners are rising to leading positions in both the supply of equipment and catalysts. In China, the most popular form of reagent is urea.  This is in contrast to the rest of the world where anhydrous ammonia is the leading reagent. Aqueous ammonia is used in many gas turbine installations where the total reagent quantities are modest.  The safety protocol expenditures are relatively fixed regardless of quantity.  It, therefore, makes sense to use an inherently safe reagent where reagent quantities are small.

There are various ways to remove NOx.  Most is removed with selective catalytic reduction (SCR).   Selective non-catalytic reduction (SNCR) is popular where efficiency requirements are lower.  The two technologies can be used together to improve economics.  This is particularly true when control technology must be added to existing plants.

For more information on NOx Control World Market, click on:http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/104-n035

NEWS RELEASE                                                                                                    JANUARY 2015

Chinese Air Filter Sales Reach $1 Billion/yr.

Sales of HVAC air filters in China have reached $1 billion/yr. This does not include room air purifiers but only filters in ducts in commercial and residential buildings. It also includes the filters used in gas turbine intakes. This forecast as well as forecasts for all other countries are contained in the continually revised McIlvaine Air Filtration and Purification World Market.

With the construction boom and poor quality of ambient air, the market in China is potentially much larger than in any other country.  International suppliers of fibers and media have been present in the country and are among the industry leaders.  However, there has been rapid growth among domestic suppliers as well as an improvement in quality.  The local demand for medium efficiency filters (F5-9) is growing faster than for the less expensive less efficient (Gl-G4).

There has been accelerated growth in the high efficiency segment (H10-17).  The semiconductor industry in China is a major purchaser of the high efficiency filters (HEPA).  Many generic pharmaceutical plants are now operating in China. They are also major HEPA filter purchasers.

The ambient air in many Chinese cities contains dangerous levels of particles smaller than 2.5 microns. Citizens with asthma, pregnant women and those in other high risk categories are being advised to install high efficiency filters in their living space. The market is impacted by the increased price of high efficiency filters but also the fact that they need more frequent replacement in the higher pollution environment.

For more information on Air Filtration and Purification World Market, click on:http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/108-n022

NEWS RELEASE                                                                                                    JANUARY 2015

U.S. Utilities Will Spend More Than $20 Billion/yr. For New Gas Turbine Facilities

The low price of natural gas, the environmental restrictions on coal burning and the robust economy are driving expansion of gas-fired power generation in the U.S. Hundreds of projects are in the planning and construction stage.  These are identified in McIlvaine Gas Turbine Combined Cycle Supplier Program.  Here are some of the projects for which commitments are just being made.

Oregon Clean Energy Center: Black & Veatch has been selected as the engineering, procurement, construction and startup contractor of the Oregon Clean Energy Center (OCEC) in Oregon, Ohio. The 869 MW facility is expected to begin commercial operations by July 2017.

Ponderosa King Energy Center: Competitive Power Ventures Holdings LLC (CPV) submitted land plans to the city of Houston for the 900 MW natural gas-fired Pondera King Energy Center. A power plant has been planned for the 203-acre site since about 2007.

Fox Energy Center: Wisconsin Public Service Corporation plans another natural gas-fired generator at the Fox Energy Center. The power plant would cost approximately $550 million. Construction could begin in spring 2016 with a goal of being online by 2019.

Hawkes Meadow: LS Power Group is considering building a 451-MW $400 million natural gas-fired power plant in Methuen, Massachusetts. Hawkes Meadow (subsidiary of LS Power) plans to operate the plant between 500 and 900 hours per year during peak times, to fill gaps in renewable electricity generation and during system outages. Construction could begin by the middle of 2016.

Stonewall Energy Power Plant: A Bechtel-Siemens consortium has received an engineering, procurement and construction contract from Panda Power Funds to build a natural gas-fueled combined cycle power plant in Loudoun County, Virginia. The 778 MW Stonewall Energy project will feature advanced emissions control technology. Siemens will deliver the power island equipment, including two SGT6-5000F gas turbines, one SST6-5000 steam turbine with a SCon-4000 condenser and two SGen6-1000A generators. Siemens will also supply one SGen6-2000H generator and two NEM duct-fired heat recovery steam generators along with the complete electrical system and SPPA-T3000 instrumentation and control system. Bechtel will be responsible for engineering and procurement for the balance of the plant as well as for the installation, construction and commissioning of the facility.

Riverside Energy Center Expansion:  Alliant Energy Corporation will ask for state permission to build a large natural gas-fired power plant near Beloit, at a cost of $725 million to $775 million. The parent company of Wisconsin Power and Light Co. says it needs to replace older and less-efficient coal and natural gas-fired power plants owned by Alliant across the state. The new plant would generate 650 MW of electricity. Alliant hopes to have a decision in time to start construction in 2016 and begin running the plant in 2019. The site chosen for the project is the Riverside Energy Center in the town of Beloit, which is already home to a WPL natural gas-fired power plant.

York Energy Expansion: CB&I won a contract by Calpine Mid-Merit LLC, an affiliate of Calpine Corp., for the initial development phase of a combined-cycle gas turbine power station in Peach Bottom Township, Pennsylvania. The 760 MW unit will be built adjacent to the existing York Energy Center.

Chouteau OK:  Grand River Dam Authority (GRDA) will pay $296.9 million for an engineering, procurement and construction (EPC) contract for a 495-MW combined-cycle power plant near Chouteau, Oklahoma. The project, which includes a new substation, is expected to be completed during spring 2017. The site will feature a 328-MW gas turbine known as the M501J and a 167-MW steam turbine from Mitsubishi Hitachi Power Systems. It will be the first J-series gas turbine installed in the Western Hemisphere. The unit will replace an old coal-fired unit at the Grand River Energy Center.

Alpine Power Plant: Wolverine Power Cooperative plans to build a natural gas-fired power plant in Otsego County's Elmira Township Michigan. It would cost more than $100 million. Wolverine wants to start construction in 2015.  The new plant could begin operations in 2016 if the project moves forward as planned.

For more information on the Gas Turbine and Combined Cycle Supplier Program, click on:

http://home.mcilvainecompany.com/index.php/markets/28-energy/610-59ei

NEWS RELEASE                                                                                                 JANUARY 2015

$1 Billion/yr. Market for Belt Filter Presses and Replacement Belts

Belt filter presses were developed in the 1970s and became popular just as the McIlvaine Company published the first issue of the Liquid Filtration Newsletter in 1980.  This design rapidly replaced drum filters for many dewatering applications from sewage sludge dewatering to sludges in food, mining and other industries.  Over the years the number of operating units has increased to more than 40,000. Each of these units regularly needs to replace belts.  These belts are the heart of the operation and are relatively expensive.   As a result, the annual market for new units and belts is over $1 billion/yr. worldwide. This is the latest forecast in the McIlvaine Liquid Filtration and Media World Markets.

Belt Filter Press   and Belt Revenues  2015 ($ Millions)

Asia

450

Americas

250

Europe  

200

Africa

100

Total

1,000

 

There are 16,000 municipal wastewater plants in the U.S. They are operating more than 5,000 belt presses. Individual installations are tracked in the McIlvaine North American Municipal Wastewater Treatment Facilities and People Database.

China is the fastest growing purchaser of belt presses.  International suppliers such as Andritz have been active in the area for several decades. Despite spending more on building treatment facilities than any other country, they still are behind the U.S. and Europe in terms of the percentage of waste receiving secondary treatment.

Belt presses compete with centrifuges and filter presses.  Centrifuges are more competitive where unit volumes are large. Filter presses are more expensive and must operate on a batch basis but do achieve drier solids.

One of the highest growth markets for belt filter presses is the livestock industry. Manure generation from this industry is larger than that generated by people. Many countries are enacting tighter effluent limitations for this industry.

The biggest driver is the growth in Asia of municipal waste treatment facilities.  This growth is caused by higher standards of living and expectations as well as the migration of over one billion people to the cities from rural environments.

For more information on Liquid Filtration and Media World Markets, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/118-n006

For more information on North American Municipal Wastewater Treatment Facilities & People Database, click on:http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/114-62ei-2

NEWS RELEASE                                                                                                    JANUARY 2015

Industrial Valve Revenues Will Rise To Between $65 - $75 Billion By 2020

In 2014, Industrial valve sales were less than $57 billion. By 2020, revenues will rise to between $65 - $75 billion, according to the latest forecast from the McIlvaine Company in Industrial Valves: World Market.

Inability to precisely predict revenues is due not only to the obvious factors such as general economic and population growth, but to variables in the process options. Valve investments vary from option to option.   Using power generation as an example - if coal is considered as the basis for valve purchases, nuclear purchases of valves will be higher and gas turbines lower.

Valve Revenues/MW

Nuclear

1.5

Coal

1

Gas Turbine/Combined   Cycle

0.4

 

Efforts by environmentalists to reduce reliance on coal are falling on deaf ears in Asia. The cost and safety concerns about nuclear power are under scrutiny. Gas turbine revenues are going to rise at a faster rate than other options but from a relatively small base. It would take large double-digit gains to offset the valve purchases for other options.

The biggest variable presently affecting valve revenues is the choice of oil and gas extraction method. There are large differences in valve revenues depending on the choice.

Valve Revenues/bbl of Oil Equivalent

Subsea and CTL

4

Unconventional, Shale,   Tar Sands, CBM

3

Conventional

1

 

The price of oil has been cut in half from highs in 2014 of over $100/barrel. An increase in conventional production at the expense of subsea and other unconventional options would result in smaller valve revenues.

Valve sales for oil and gas will be negatively impacted by the lower prices. The question is: What is the magnitude and duration? Oil prices have always cycled. When prices fall, the highest cost producers cease activity. Ultimately, this creates shortages and prices rise.

Producers who will drop out in the short-term are operating on the following realities:

Exploration

30-40% of total cost/bbl

Development and Production  

60-70% of total cost/bbl

Decline Rates

5-30%/yr. (production   from a specific well)

Exploration has been estimated to be around $30/bbl for a new source. So at $50/barrel, the exploration is going to drop substantially. However, exploration accounts for a relatively small percentage of the total valve revenues. Development includes drilling new wells in areas which have already been explored. So at $50/barrel, there will be justification for this investment. The cost of operating existing wells is small. Thus this production is unaffected.

The decline rate is the key factor in the rebound of prices and valve revenues. Averages of 10-15%/yr. have been cited for the industry. If no new wells were drilled, the flow would drop by 20 or 30% within just two years. The decline rate for shale sources in the U.S. is being debated. The ability of conventional suppliers in the Middle East to raise production from existing wells is also in question.

It is likely that demand will continue to rise. The lower oil prices and booming economies in Asia and the U.S. will contribute to that rise. So imbalances in supply/demand and potential shortages will lead to the next round of oil price increases and investment in unconventional sources.

Valve revenues will also be impacted by technology developments. The cost of direct coal-to-liquids could be as low as $40/barrel. If so, China would dominate the world energy picture. There are continuing developments in the extraction of oil and gas from shale. The cost of unconventional extraction rises as old wells need enhanced recovery, artificial lifts and other investments. As the cost of unconventional extraction is reduced, the margin between the two is narrowed. The result is less ability to manipulate prices by conventional producers.

Valve performance improvements are another factor which would positively impact valve revenues. There are lots of problems with subsea valves. Operators will be willing to pay more for valves which are more reliable under the most extreme conditions.

Other industries purchasing valves will be positively impacted by lower oil prices. So in the longer term, a decline in oil and gas valve revenues will be offset by gains in the chemical, steel, mining and other industries. The picture changes continually. McIlvaine revises its long-term forecasts at least once every quarter and more often if events so dictate.

For more information on Industrial Valves: World Market, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/115-n028

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