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The natural gas fired electricity generation market size is estimated to grow at a CAGR of 3.95% between 2022 and 2027. The market size is forecast to increase by 122.7 million toe. The growth of the market depends on several factors, including increased energy demand, rising support from governments worldwide, and increasing natural gas production.
This natural gas fired electricity generation market report extensively covers market segmentation by type (CGCT and OCGT), end-user (residential, commercial, and industrial), and geography (North America, APAC, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increasing natural gas production is notably driving the market growth, although factors such as environmental concerns associated with the combustion of natural gas may impede the market growth. 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.
The increasing natural gas production is notably driving market growth. The fastest-growing fossil fuel is now natural gas due to the increasing supply of tight gas, shale gas, and coalbed methane. Since 2008, successful shale oil and gas extraction in nations like the US has increased the global supply of natural gas. The US EIA estimated that shale gas production will reach 8.1 million barrels per day (bpd) by September 2020. Additionally, the IEA predicted that by 2022, US natural gas production would make up 40% of the world's total natural gas output. Furthermore, the Permian Basin, where natural gas production was anticipated to double by 2022, dominates US shale gas production.
Similarly, the IEA predicted that by 2022, the Middle East would increase global natural gas production by 2,472.03 bcf (70 bcm). The Yamal peninsula is also home to significant untapped natural gas production capacity for Russia, which is the second-largest natural gas producer in the world after the United States. Hence, natural gas will be readily available for use in generating electricity due to the increase in natural gas production around the world. Hence, such factors will boost the growth of the global market during the forecast period.
A shift to gas generators is an emerging trend in market growth. Natural gas, one of the non-renewable fuels used by gas generators, is a cost-efficient and efficient source of energy for mobile power generation. Compared to other fossil fuels, natural gas is more efficient and has lower operating costs. The capacity utilization rate of natural gas-fired combined cycles was the highest among other fossil fuels in 2018, according to the US EIA. By 2030, it is anticipated that 80% of natural gas's capacity will be used, further promoting the use of this fuel for the production of natural gas-fired electricity.
Compared to diesel generators, gas generators emit fewer emissions and are cleaner. These generators produce a smaller amount of air pollutants. Additionally, unlike diesel generators, they do not produce ash and soot leftovers. The power industry has switched to gas generators as a result of these benefits. New government regulations that encourage the use of gas generators have also been created as a result of environmental concerns. As a result, gas generators are becoming more widely used. Moreover, new variations of natural gas generators are also being introduced by numerous vendors active in the target market. Hence, factors like these will fuel the growth of the global market during the forecast period.
The environmental concerns associated with the combustion of natural gas are major challenges impeding market growth. Natural gas is a fossil fuel, and so it still releases a variety of hazardous pollutants when it is burned, even though the emissions of greenhouse gases (GHGs) are much lower than those from coal or oil. Additionally, the combustion of natural gas releases nitrogen oxides, which are precursors to smog. These emissions have also been linked to a number of human illnesses, including lung cancer, asthma, bronchitis, and heart disease, in addition to air pollution. Furthermore, exposure to high concentrations of these air pollutants may have negative health effects, including cancer, cardiovascular disease, and respiratory diseases.
Additionally, methane, which is a key component of natural gas, leaks during the drilling, extraction, and transportation of natural gas from wells and through pipelines. Methane has a greater capacity than CO2 to trap heat over many years, which ultimately results in global warming. These fugitive methane emissions can account for up to 10% of the total natural gas lifecycle emissions. As a result, a variety of variables, including the leakage rate, the global warming potential of methane over various time periods, and the efficiency of energy conversion, affect whether natural gas has lower lifecycle GHG emissions than coal and oil. Hence, the concerns over environmental pollution arising from the drilling and use of natural gas might hinder the growth of the market during the forecast period.
The 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 Natural Gas Fired Electricity Generation Market Customer Landscape
Vendors 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.
NTPC Ltd. - The company is engaged in the generation of electricity and allied activities. The key offerings of the company include natural gas-fired electricity generation solutions such as Carlsbad Energy Center.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the CGCT segment will be significant during the forecast period. The phrase combined cycle refers to the fusion of various thermodynamic power generation cycles. Combustion and steam turbines are a part of combined-cycle electric generating systems, and they work together as power blocks. The size of power blocks has increased along with improvements in combined cycle gas unit performance. The average size of a natural gas-fired combined cycle power block has increased significantly since 2014, according to the US EIA.
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The CGCT segment was valued at 315.39 million toe in 2017 and continued to grow until 2021. The basic elements of plants using CCGTs are similar to those of plants using OCGTs, but the heat from a CCGT exhaust is used in a heat recovery steam generator (HRSG) to create steam, which in turn powers a steam turbine and produces additional electricity. As a result, heat that would have otherwise been lost is trapped and used to generate more electricity. Hence, CCGT efficiency is greater than OCGT efficiency. The efficiency improvements (lower heat rates) that larger combined cycle power blocks offer have recently become a popular trend. Also, larger power blocks generally incur lower per-unit capital costs, thus making them more cost-effective. On the other hand, smaller power blocks also play a critical role in electricity generation. Hence, Such factors will boost the growth of the global market through the CCGT segment during the forecast period.
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North America is estimated to contribute 55% 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.
In 2022, the US was the main contributor to the market in North America. Due to the shale gas boom in the US, natural gas production in the region has significantly increased. By 2023, the US is anticipated to contribute significantly to both the increase in natural gas production and the export of liquified natural gas (LNG), according to the IEA. As of 2020, the US produced the most natural gas in the world and contributed nearly 45% of the increase in that production. By 2023, LNG exports from the nation are projected to increase by almost 25%. As a result of the accessibility of affordable domestic resources, natural gas for power generation is anticipated to increase in North America during the forecast period.
Both steam and gas turbines use natural gas to generate electricity. The three main categories of energy sources used to create electricity are nuclear energy, renewable energy sources, and fossil fuels like coal, natural gas, and oil. The majority of the electricity produced, according to the US EIA, was produced using fossil fuels. For instance, in 2020, natural gas generated 38% of all the electricity produced in the US, which was the highest share. As a result, the regional market has undergone significant changes. Moreover, from an economic and environmental standpoint, natural gas technology has numerous and significant benefits. The technology is capable of producing clean energy effectively as well as acting as a standby for renewable energy sources like wind and solar energy. As a result, natural gas technology has been widely embraced in the region. Hence, all such factors will fuel the growth of the market in North America during the forecast period.
The outbreak of COVID-19 hampered the growth of the regional market in 2020. However, due to large-scale vaccination, the lockdowns were lifted in 2021, which led to the resumption of business activities in the market in focus. Therefore, the regional market in focus is expected to recover and grow during the forecast period.
The natural gas fired electricity generation market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the global natural gas fired electricity generation market as a part of the global renewable electricity market within the global independent power and renewable electricity market. The parent global renewable electricity market covers companies engaged in the generation and distribution of electricity using renewable sources. Our market research report has extensively covered external factors influencing the parent market growth during the forecast period.
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Natural Gas Fired Electricity Generation Market Scope |
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Report Coverage |
Details |
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Page number |
175 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 3.95% |
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Market growth 2023-2027 |
122.7 million toe |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
3.7 |
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Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
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Performing market contribution |
North America at 55% |
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Key countries |
US, Canada, China, Japan, and Russia |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Bharat Heavy Electricals Ltd., Centrais Eletricas Brasileiras SA, Central Puerto S.A., China Resources Holdings Co. Ltd., Dominion Energy Inc., Duke Energy Corp., Exelon Corp., General Electric Co., Iberdrola SA, Kawasaki Heavy Industries Ltd., Mitsubishi Heavy Industries Ltd., Nextera Energy Inc., NRG Energy Inc., NTPC Ltd., RWE AG, Sembcorp Industries Ltd., Siemens AG, Tokyo Electric Power Co. Holdings Inc., Vattenfall AB, and ENGIE SA |
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Market dynamics |
Parent market analysis, 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. |
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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. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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