NEWS RELEASE                                                                                        MARCH 2016

Market for Flue Gas Desulfurization Equipment Will Range between $5 and $10 Billion/yr. over the Next Seven Years

Major variables are making it impossible to predict the size of the power plant flue gas desulfurization (FGD) market over the next seven years. Under the most conservative scenario, the investment in new systems plus upgrades and replacements will be just $5 billion/yr.  Under an optimistic scenario, the revenues will exceed $10 billion/yr.   The factors impacting the market include:

  • Cost of electricity compared to alternative sources such as gas and renewables
  • Regulations on greenhouse gases
  • Regulations on sulfur oxide emissions
  • Growth in the Asian economies

The U.S. market will be primarily a replacement market.  The cost of gas-fired power is low, there are tough regulatory pressures on coal, and there is an illogical program to operate old coal-fired power plants rather than replace them with new ones even though limited life new power plants could be justified economically for the time frame.

Europe will build new coal-fired power plants to replace existing ones, but is not likely to expand its coal-fired fleet.

Asia is expanding its coal-fired generation and is a big potential market.  Japan, Taiwan, Korea and China incorporate FGD on all new coal-fired power plants. There is uncertainty as to the utilization of FGD in new coal-fired power plants that will be built in India, Vietnam, Indonesia and other Asian countries.

The biggest wild card is China.  It has spent more money on FGD than the rest of the world combined over the last five years.  A combined program addressing both retrofits and new units created a huge market.  Now most of the retrofits have been made and there are representations by some Chinese officials that coal will be de-emphasized in the future.

The facts create a different picture.  A large number of new Chinese coal-fired power plants have been approved.  There is the potential for nuclear to generate up to 50 GW but this is less than the incremental increase in electricity consumption which will be needed each year.  

The Chinese economic expansion depends on expansion of electrical capacity.  Per capita consumption is only one-third of that in the U.S. even though the Chinese energy consumption per unit of GDP is more than double that in the U.S.

The most serious pollution problems in China are recognized to be smog caused in part by the lack of electricity and need to utilize high polluting solid fuels in small industrial and commercial facilities. The average Chinese citizen will give much credit to a government which reduces smog but very little to one which reduces the world’s greenhouse gases.

The present McIlvaine forecast is for the FGD market to average over $7 billion/yr. over the next seven years with about $4.5 billion attributable to new installations and $2.5 billion attributable to upgrades and replacement parts.

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