NEWS RELEASE                                                                                                    AUGUST 2015

Investment in Coal-Fired Power Plants Will Exceed Other Energy Sectors In 2016

Power plants continue to invest more money in coal-fired power over gas and nuclear.  The trends are shown in N043 Fossil and Nuclear Power Generation: World Analysis and Forecastpublished by the McIlvaine Company.

World Fossil and   Nuclear Capacity  (1000 MW)   2016
Fuel   Type 2016    Capacity in operation New   capacity in 2016
Coal 2,145 86
Nuclear    405 16
Gas   Turbine 1,485 71

Most of the 86,000 MW of new coal-fired power plants starting operation in 2016 will be in Asia.  The U.S. will be the largest market for gas turbines.   When one considers orders placed with Russian companies as opposed to nuclear construction in Russia, then this country is a nuclear leader.

The Russian nuclear reactor business under state-owned Rosatom is moving aggressively ahead in multiple countries and world regions with 29 nuclear reactors in planning or construction at this time.  In contrast, another world player, French government-owned Areva, has not sold a reactor since 2007 and is struggling financially. The U.S. Westinghouse business is similarly in the doldrums.  Other active players include the Japanese, Chinese and the South Koreans, each with one or more reactor designs of their own, but not actively exporting the technology as effectively as is Russia.

There are essentially four reasons for the Russian success:

  • Russia is underwriting favorable financing for the international deals
  • Rosatom offers build, own, operate (BOO) contracts highly favored by many customers/state clients
  • Rosatom enjoys limited oversight (interference) from the Russian government and is free/encouraged to sell around the world
  • Some deals are accompanied by “sweeteners” which include rights to purchase other military equipment such as submarines and other equipment on favorable terms
  • The U.S. is not free to build reactors in certain countries

 

Following is a list of in-negotiation or signed deals around the world:

  • Jordan: 2 reactors
  • Hungary: 2 reactors
  • Egypt: 1 reactor
  • Iran: 2 reactors currently, with 4 additional to follow
  • India: 3 reactors currently, with up to 10 additional to follow
  • Finland: 1 reactor
  • Turkey: 1 reactor
  • Argentina: 1 reactor
  • Vietnam: 1 reactor
  • Bangladesh: 1 reactor
  • Algeria, plus others

For more information on N043 Fossil and Nuclear Power Generation: World Analysis and Forecast, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/113-n043

NEWS RELEASE                                                                                                    AUGUST 2015

Ultrapure Water Market to Exceed $4 Billion Next Year

The world market for ultrapure water (UPW) systems and components will exceed $4.3 billion next year according to the latest McIlvaine forecasts in N029 Ultrapure Water: World Market.

Ultrapure Water Revenues

     
   Industry             2016
Coal-Fired   Power  1,096,700
Electronics  1,383,004
Flat   Panel  741,951
Gas   Turbines  75,937
Industrial   Power  390,135
Other   Industries  213,460
Pharmaceutical  459,803

Electronics manufacturers will lead the way with purchases of just under $1.4 billion. Most of these orders will be in Asia. Many Asian power plants are installing ultrasupercritical coal-fired boilers.  They require the highest purity water.  Due to the construction of generic drug manufacturing facilities in Asia, this region of the world will gain share as opposed to other pharmaceutical markets.

The downturn in China is likely to have some impact on growth in that country over the next few years. Coal-fired boiler capacity growth is slowing.  However, emphasis on water conservation is leading to the use of recycled water in ultrapure water systems. In some cases, desalinated water is now being utilized. There is a trend to combine desalination of drinking water with power production at seacoast locations.  There are a number of synergies including a source of ultrapure water.

Ion-exchange resins, cartridges and treatment chemicals are among the consumables expenditures required in UPW systems.

For more information on N029 Ultrapure Water: World Market, click on:http://home.mcilvainecompany.com/index.php/markets/27-water/447-n029-ultrapure-water-world-markets

NEWS RELEASE                                                                                                    AUGUST 2015

Who Buys Flow Control and Treatment Equipment?

Sales calls, advertising and exhibiting by air, gas, liquid, water flow control and equipment suppliers are all predicated on certain assumptions relative to the identity of the decision maker for the product being sold.  McIlvaine analyses in N064 Air/Gas/Water/Fluid Treatment and Control: World Marketshow that there is a continuing shift in responsibility.  The following trends are clear:

  • The divide between how decisions are made on commodity vs. engineered products widens,
  • Decisions for a specific engineered product are concentrated in fewer individuals,
  • The total number of decision makers increases due to the increasing number of product categories which are purchased,
  • The importance of face-to-face contact is diminishing,
  • The reliance on life cycle cost rather than initial cost increases,
  • The challenge to assimilate the needed knowledge to make buying decisions continues to grow.

Commodity vs. Engineered Products:  Decisions on commodity products continue to be made by the purchasing department.  They are concerned about reliability of supply and cost, but rarely need input from other departments.  On the other hand, the complexity of engineered product and particularly those which can impact the company’s quality control are likely to be made with greater input from engineering and operating management and less on purchasing.

Purchasing people expect to be reactive and respond to seller inputs. So direct sales contact, sales leads and similar tools gain in importance.  Those making decisions on engineered products tend to be proactive and now tend to make decisions over longer time spans.  Gone are the days when the foreign delegation would attend the Tri Annual ACHEMA fair and have to make major decisions on the spot. These decisions are now forged over time and from a number of sources. The supplier who waits for the sales lead or formal specification is in difficulty.

Concentration of decision making in fewer individuals. Growth of large companies and the trend toward internationalization result in key product decisions being made by a few individuals. An engineer at Intel may make high efficiency filter selections for semiconductor facilities throughout the world.  A valve expert at Petrobas will make key decisions about severe service valves which may influence the selection of hundreds of thousands of valves per year.

Another factor in the continuing concentration of decision making is the rapidly growing amount of knowledge which may be relevant to the decision.  Niche experts are needed to keep up with this knowledge explosion.

Increasing numbers of decision makers.  The knowledge explosion dictates that pump and valve decisions be made by separate individuals. The specialist on subsea valves will not be involved in decisions on valves for LNG plants. The engineer making scrubber decisions for EON will not be making the decisions on products to upgrade precipitator transformer rectifier sets.

With more and more decision makers each influencing greater numbers of purchasing decisions, it becomes a major challenge for suppliers to reach the right person at the right time.  Understanding of the inner workings of the target companies becomes more important than obtaining the specification for the latest project.  If the expert does not already have you on the “short” list, early access to a specification is not valuable.

Face-to-face discussions diminish in importance.   A new generation of decision makers who is constantly communicating digitally has less time for face-to-face discussions and is relying on alternatives for critical decisions.  Personal relationships will always be important but they are now complemented by many other communication tools.

Greater reliance on life cycle cost rather than initial price.  In the past it has been difficult to make life cycle cost comparisons between competitive products.  The access to reliable comparisons is resulting is increasing use of this tool.

The challenge to assimilate needed knowledge.  Knowledge continues to expand and the human brain does not.  The purchaser must now rely on niche experts who can keep up with the latest developments.   The seller has to create new routes to supply the niche expertise.  The local sales representative cannot deliver it and the customer cannot supply it.  Sellers who effectively address this need have a substantial advantage.

ADAPTING TO A CHANGING MARKET

The responsibility shifts dictate new approaches to the market.  McIlvaine has created a unique new route to market with free decision systems for operator and owners.  They include:

44I Power Plant Air Quality Decisions

Gas Turbine and Combined Cycle Decisions

1ABC Fabric Filter

2ABC Scrubber/Adsorber/Biofilter Knowledge Systems

3ABC FGD and DeNOx Knowledge Systems

4ABC Electrostatic Precipitator Knowledge Systems

9ABC Air Pollution Monitoring and Sampling Knowledge Systems

NEWS RELEASE                                                                                                    AUGUST 2015

NOx Control Market Leveling Off but At a High Level

The Chinese program to retrofit SCR on most of its coal-fired power plants has created a huge spike in the market for NOx control systems and the SCR catalysts.  One result has been hundreds of thousands of M3 catalyst manufacturing capacity being added in China.  Over the last decade, China has risen from a position of no local catalyst manufacturing capacity to become the leading supplier worldwide.  At the same time, Chinese system suppliers have become leaders as well.  Longyuan is now a world leader in terms of installed SCR megawatts.

No. Chinese SCR   System Suppliers
1 Beijing Guodian Longyuan Environmental   Engineering Co., Ltd.
2 Dongfang Boiler Group Co., Ltd.
3 Harbin Boiler Factory Co., Ltd.
4 China Datang Technologies &   Engineering Co., Ltd
5 Zhejiang Tiandi Environmental Protection   Engineering Co., Ltd.
6 China Huadian Engineering
7 Tsinghua Tongfang Environment Co., Ltd.

The big coal retrofit program is coming to an end not only in China but throughout Europe and the U.S. India shows no signs of considering NOx control.  So the market for new SCR systems for coal-fired boilers will be smaller in the future than in the recent past.

The market for SCR systems for gas turbines is on the rise.  Many new gas turbines are being installed in the U.S. All have SCR systems and many have oxidation catalysts as well.  Some European power plants originally installed without NOx control are being required to retrofit the systems.

Industrial plants will also be spending more for NOx control than in the past. Many large industrial sources do not have SCR systems in place.  They will be considering alternatives such as SNCR and hybrid systems as well as SCR.  In furnace combustion, control is a key part of the solution as well.

The recently developed catalytic filters are likely to capture considerable market share. Clear Edge Division of Filtration Group and Haldor Topsoe/Unifrax are among the developers of this new technology.

Ozone generation is another approach which can be combined with scrubbers for NOx reduction. When combined with ammonia scrubbers a salable ammonium nitrate is produced.

The markets, technology and regulations are all covered in N035 NOx Control World Market

NEWS RELEASE                                                                                                    AUGUST 2015

OEMs, EPCs and Consultants Will Account For Flow Control and Treatment Purchases of $68 Billion In 2015

End users will defer to OEMs, EPCs and consultants to make the purchasing decision for 17 percent of the flow control and treatment purchases. The total purchases determined by these companies will exceed $68 billion in 2015.  This is the latest forecast in N064 Air/Gas/Water/Fluid Treatment and Control: World Market. The 20,000 companies responsible for these purchases are identified in the McIlvaine OEM networking directory.

The average annual purchase per company will be in excess of $3 million.  The largest category will be valves where the non-users will purchase or direct purchase of valves totaling $20 billion. OEMs and EPCs are direct purchasers of the products. Consultants and engineering firms are specifiers but leave the actual purchase to the end user or OEM. The largest EPCs and consultants such as Fluor and Bechtel will each account for hundreds of millions of dollars worth of flow control and treatment equipment.

Large OEMS such as Mitsubishi, Babcock &Wilcox, Veolia and others providing complete power, wastewater, or industrial systems are purchasers rather than manufacturers.  Large coal-fired power plant suppliers purchase entire sub systems as well as proprietary products. In cases where they supply proprietary products, they are typically purchasing castings and fabrications.

Gas/Water/Fluid OEM, EPC and Consultant Driven Revenues 2015     ($ Billions)

Product

Revenue

Pumps 15
Valves 20
Cartridge 2
Sedimentation/ Centrifugation 3
Cross-Flow Membranes 4
Macrofiltration 2
Biological/Oxidation/Destruction 3
Water/Wastewater Chemicals 2
Filtration/Purification 2
Fabric Filter 2
Scrubber 1
Precipitator 2
FGD 1
DeNOx 2
Thermal/Catalytic 2
Fans and Compressors 5
Total 68

The critical decisions on smaller products such as valves and pumps are usually made on a local level. Some of the consulting and engineering companies have hundreds of offices worldwide. For larger system decisions the local offices will often defer to a specialist who is assisting the local offices globally. 

McIlvaine has identified each OEM and consultant with a financial entity number.  This is critical in identifying the subsidiaries of conglomerates and for Chinese companies where there are a variety of English names for the same entity.

Information on N064 Air/Gas/Water/Fluid Treatment and Control: World Market

Information on 53DI OEM Networking Directory

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