Gas Engine Market Analysis Europe, North America, APAC, South America, Middle East and Africa - US, China, Japan, Germany, France - Size and Forecast 2023-2027

 Gas Engine Market Forecast 2023-2027

The global gas engine market size is estimated to grow by USD 2.17 billion between 2022 and 2027 accelerating at a CAGR of 6.32%. Gas generators play a significant role in the global market due to their utilization of gas engines. This market is further propelled by the adoption of these engines for electricity generation and the environmentally friendly nature of natural gas, which emits lower levels of emissions compared to fossil fuels. These factors collectively contribute to the positive growth trajectory of the market. Gas generators offer efficient and reliable power solutions, making them preferred choices in various industries and applications. The shift towards cleaner energy sources and the increasing focus on sustainable practices are also driving the demand for gas generators in the market.

Market Growth and Forecasting

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Market Segmentation

This market analysis report extensively covers market segmentation by application (power generation, co-generation, and others), end-user (power, industrial, residential, and commercial), and geography (Europe, North America, APAC, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

Market Segmentation by Application and Geography

The market is segmented based on various key factors that drive its growth and adoption across industries. Power production technology plays a crucial role, offering efficient ways to generate electricity while minimizing environmental impact. The focus on environment preservation has led to the development of advanced engine technologies that prioritize emissions reduction and energy efficiency. Industrialization and economic expansion drive the demand for reliable power sources, prompting industries to adopt gas engine technology for its fuel efficiency and reliability. Moreover, the increasing electricity demand from various sectors such as manufacturing and transportation, has fueled investments in Combined Heat and Power (CHP) plants, utilizing natural gas reserves efficiently. Governmental bodies and stakeholders are actively promoting the use of special gases like shale gas, mine gas, biogas, landfill gas, sewage gas, and syngas in gas engines to enhance efficiency and reduce emissions. This segmentation reflects the market's shift towards sustainable energy solutions and the adoption of advanced technologies to meet the growing energy needs while maintaining a lower environmental footprint.

Application Analysis

The market share growth by the power generation segment will be significant during the forecast period. This segment includes the use of these engines for power generation or standby power systems by various end-users, including power plant operators (utilities), and industrial, commercial, and residential end-users. 

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The power generation segment was valued at USD 3.16 billion in 2017 and continued to grow until 2021.  Advances in gas engine technologies have helped companies offer highly reliable products with efficiencies ranging from 25% to 90%. These engine uses lean-burn technology, which helps lower carbon emissions during power generation. The efficiencies of engines are determined based on fuel consumption, carbon emission, and operational cost for generating energy. High-efficiency engines have a reduced level of fuel consumption, reduced carbon emission, and lower operational cost for each kilowatt-hour of energy generated. The advent of high-efficiency engines capable of producing up to 20 MW has increased the adoption of these engines in power generation.  In recent years, there have been growing investments in power plants and thermal power stations. This has also led to the completion of many plant expansion projects in the past few years. Such additions will propel the demand for engines from power generation plants and augment the growth of the segment during the forecast period. 

Geographical Analysis

Europe is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The European region offers the greatest potential for high gas engine deployment in a wide range of applications. As hydrogen and natural-gas-based technologies produce no emissions, government initiatives promoting a cleaner energy transition act as a catalyst for industry growth. Many companies have created and upgraded engine systems that are more flexible to new applications. For instance, in September 2021, Cummins stated that it would begin developing a medium-duty 6.7-liter hydrogen-based combustion engine and a 15-liter hydrogen engine as part of its hydrogen-fueled internal combustion engine (H2-ICE) development. A part of the work at Cummins Darlington site in the United Kingdom will be funded by the UK government. The project is part of a bigger effort to decarbonize the transportation sector by 2025. Such developments fuel the growth of the regional market during the forecast period.

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Who are the Major Market market players?

companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the Market.

Hyundai Heavy Industries Co. Ltd. - The company focuses on providing naval shipbuilding, industrial shipbuilding, and other services, and manufacturing diesel engines and other products. The key offerings of the company include gas engines.

The market trends and analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Caterpillar Inc.
• Cummins Inc.
• DEUTZ AG
• Guangxi Yuchai Machinery Group Co. Ltd.
• INNIO Jenbacher GmbH and Co. OG
• JFE Engineering Corp.
• Kawasaki Heavy Industries Ltd.
• Kohler Co.
• Rolls Royce Holdings Plc
• Siemens Energy AG
• Sinotruk Hong Kong Ltd.
• Volkswagen AG
• WeiChai Holding Group Co. Ltd.
• Yanmar Holdings Co. Ltd.
• Wartsila Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Dynamics and Customer Landscape

The market is driven by various factors such as Power production technology advancements, addressing environmental concerns with reduced emissions, and improved energy efficiency. The growing Industrialization and Economic expansion fuel Electricity demand, leading to increased adoption of gas engine technology and Combined Heat and Power (CHP) plants. However, challenges like managing Natural gas reserves sustainably, navigating emission reduction regulations and ensuring reliability pose significant hurdles. Trends include the rise of special gases like shale gas, biogas, and syngas for enhanced efficiency and reduced environmental footprint. Our researchers analyzed the data with 2022 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The expanding gas generator market is notably driving the growth of the market share. Gas generators use gas engines, hence they are one of the noteworthy contributors to the global market. The shortage of power and energy has become predominant following the rise in urbanization and industrial development. Industries are rapidly adopting generators to ensure continuous power supply and smooth business operations. This is increasing the demand for generators.

Moreover, developing countries are experiencing higher growth when compared with other countries, and the per capita income of individuals is growing steadily, thus creating an increased demand for these generators. Therefore, companies have started venturing into developing countries. Overall, the generator market is experiencing a strong potential for generators, especially in the industrial sector. Concerns about environmental sustainability due to the use of diesel generators are also a driving factor for the growing market, especially in the industrial sector. This is because generators release fewer pollutants than diesel generators. Hence, these factors will fuel the growth of the global market during the forecast period. 

Significant Market Trends

The emergence of dual-fuel engines is an emerging trend in the market. Dual fuel engines use two types of fuels during operation. Such engines can switch between fuels so that they use the most efficient one for any condition. Usually, the engine starts by using diesel and later adds natural gas, which ignites quickly, thus helping to start the engine. Natural gas replaces fuel at a 50%-70% substitution rate. 

Moreover, the cost of fuel is the highest among the operational expenditure of engines. Therefore, the manufacturers are coming up with products that can reduce the dependence on fuel. Moreover, some regions have a higher availability of natural gas, so natural engines can be used for various applications. These engines offer high energy efficiency and torque, and power characteristics that are identical to the original diesel engine and excellent long-term reliability. Wartsila offers low-pressure dual-fuel engines, which reduce capital expenditure by 15%-20%. Such engines can be used in merchant shipping to reduce fuel bills. These technological and commercial developments will likely drive global market growth during the forecast period. 

Major Market Challenge

The efficiency problems are major challenges impeding the market growth. With the increased use of gas engines, different types of fuels are used for operating them. Propane, cleaned biogas, and hydrogen are being used as alternatives to natural gas. Such gases usually have some amounts of contaminants, such as siloxanes and hydrogen sulfides. These gasses are classified as sour gasses as the contaminants in them can cause engine failures by wearing outliners and piston rings. 

Moreover, gas engines need to deal with changing methane numbers, and the combustion ratio is usually set at a high to achieve maximum efficiency. Different gases are formed using waste products, and they all possess different properties. This increases the need for maintenance and lubrication of engines. Thus, the decrease in efficiency is expected to hamper the growth of the global market growth during the forecast period.

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Key Market Customer Landscape

The market growth analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Segment Overview

The market research and growth forecasts market growth by revenue at global, regional & country levels and analyzes the latest trends and growth opportunities from 2017 to 2027. 

• Application Outlook 
  • Power generation
  • Co-generation
  • Others
• End-user Outlook 
  • Power
  • Industrial
  • Residential
  • Commercial
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Analyst Overview

The market is experiencing significant growth driven by various factors such as carbon and emission laws, carbon emissions reduction, and the global focus on combating climate change. Gas engines play a crucial role in reducing environmental impact, especially compared to coal-fired power plants, as they offer cost-effective ways to generate electricity with lower emissions. Overall, the market is driven by a combination of environmental regulations, technological advancements in gas engine technology, and the growing demand for reliable and efficient power generation solutions across various sectors.

Moreover, one of the driving forces behind the growth of the market is the shift towards renewable energy sources and reduced production of greenhouse gases like nitrogen oxides (NOx) and sulfur oxides (SOx). The economic viability of gas engines, along with their fuel efficiency and grid stability contributions, makes them attractive options for various applications, including combined heat and power (CHP) plants, water providers, and cogeneration applications. Moreover, the rising demand for electric vehicles and the integration of natural gas reserves into the gas distribution network further boost the gas engine market. The market is also influenced by factors like energy consumption trends in industrial plants and manufacturing industries, as well as the need for renewable fuel sources in district heating systems and electricity generation mix.

Market Scope
Report Coverage	Details
Page number	171
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 6.32%
Market growth 2023-2027	USD 2.16 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	5.99
Regional analysis	Europe, North America, APAC, South America, and Middle East and Africa
Performing market contribution	Europe at 42%
Key countries	US, China, Japan, Germany, and France
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Caterpillar Inc., Cummins Inc., DEUTZ AG, Guangxi Yuchai Machinery Group Co. Ltd., Hyundai Heavy Industries Co. Ltd., INNIO Jenbacher GmbH and Co. OG, JFE Engineering Corp., Kawasaki Heavy Industries Ltd., Kohler Co., Liebherr International AG, MAN Energy Solutions SE, Mitsubishi Heavy Industries Ltd., NGV Global Group, Rolls Royce Holdings Plc, Siemens Energy AG, Sinotruk Hong Kong Ltd., Volkswagen AG, WeiChai Holding Group Co. Ltd., Yanmar Holdings Co. Ltd., and Wartsila Corp.
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the Market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• A thorough market research report analysis of the market’s competitive landscape and detailed information about companies
• Detailed market growth and trends analysis of customer landscape covering Diver of price sensitivity, Adoption of the lifecycle, and key purchase criteria
• Vendor landscape comparing criticality of inputs and factors of differentiation
• Exclusive Matrix on vendor position and classification
• Comprehensive market analysis and report analysis of factors that will challenge the growth of  market companies

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