The Global Power EPC Market was estimated to be US$ 191.64 Billion in 2022 and is expected to grow at a CAGR of 6.6% between 2023 to 2032.
Power EPC (Engineering, Procurement, and Construction) is a type of contracting service in the power sector, where the contractor is responsible for the complete project lifecycle of a power plant, from the design and engineering phase to the procurement of equipment and materials, and ultimately the construction and commissioning of the power plant.
The contractor is responsible for ensuring that the project is completed within the specified time frame, budget, and quality requirements. The Power EPC model is commonly used in the power sector for both conventional and renewable energy projects. It allows the project owner to have a single point of responsibility for the entire project, which simplifies the management and coordination of the project and reduces the overall risk.
The Global Power EPC (Engineering, Procurement, and Construction) market is being driven by several factors, including the growing demand for electricity, increasing investments in the renewable energy sector, and the need for modernizing the existing power infrastructure.
The surge in demand for electricity is due to the increasing population, urbanization, and industrialization worldwide. For instance, India's Ministry of Power has set a target of providing electricity to all households by 2022, which has led to a surge in the installation of new power plants, driving the growth of the Power EPC market in the country.
The shift towards renewable energy sources such as solar, wind, hydro, and biomass is also driving the growth of the Power EPC market, as governments across the world are investing in renewables. For example, Siemens Gamesa was awarded a contract to build a 2.6 GW wind power project in the US, which is expected to drive the growth of the Power EPC market in the country. Additionally, the aging power infrastructure in many countries is leading to frequent power outages and increasing maintenance costs, driving the need to modernize this infrastructure.
Based on power status, the largest segment is the Distribution segment. This is because the distribution network consists of the last-mile infrastructure that delivers electricity to end consumers, such as households, businesses, and industries. It includes the network of power lines, transformers, and other equipment that distribute electricity from the transmission network to end-users. The distribution network covers a much larger area than the transmission network and requires a higher number of equipment and personnel for its operations and maintenance.
The demand for electricity is primarily driven by end-users, and the distribution network is responsible for meeting this demand. Hence, the growth of the distribution segment is directly proportional to the growth in demand for electricity. Moreover, the distribution segment is typically operated by local utilities, which are often regulated by the government, ensuring a stable and predictable revenue stream. On the other hand, the transmission segment, which delivers bulk electricity from power plants to the distribution network, is relatively smaller in size and requires less infrastructure and personnel than the distribution network.
Geographically, global power EPC market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and South America.
Following are some of the major trends in these regions –
North America: The North American Power EPC market is expected to grow at a steady pace due to the increasing adoption of renewable energy sources, particularly wind and solar. The US has been the largest market for Power EPC in the region, with a significant number of power plant construction and modernization projects. The increasing focus on infrastructure development and modernization is also expected to drive the growth of the Power EPC market in the region.
Europe: The European Power EPC market is expected to grow due to the increasing investments in the renewable energy sector, particularly in offshore wind power projects. The region has set ambitious targets for reducing greenhouse gas emissions, which is driving the shift towards renewable energy sources. Germany, France, and the UK are the leading markets for Power EPC in the region.
Asia-Pacific: The Asia-Pacific Power EPC market is expected to witness significant growth due to the increasing demand for electricity and the growing focus on infrastructure development in the region. China and India are the largest markets for Power EPC in the region, with a significant number of power plant construction and modernization projects. The shift towards renewable energy sources, particularly solar and wind, is also expected to drive the growth of the Power EPC market in the region.
Middle East and Africa: The Middle East and Africa Power EPC market is expected to grow due to the increasing investments in the energy sector, particularly in the development of renewable energy sources such as solar and wind. The region has a significant amount of oil and gas reserves, which is driving the growth of the Thermal power segment. Saudi Arabia, UAE, and Egypt are the leading markets for Power EPC in the region.
South America: The South American Power EPC market is expected to grow due to the increasing demand for electricity and the growing focus on infrastructure development in the region. Brazil is the largest market for Power EPC in the region, with a significant number of power plant construction and modernization projects. The shift towards renewable energy sources, particularly hydropower and wind, is also expected to drive the growth of the Power EPC market in the region.
Companies operating in the global Power EPC market are adopting various growth strategies to increase their market share and expand their business.
Some of the major growth strategies adopted by these companies are:
Mergers and Acquisitions: Many companies are acquiring or merging with other companies to strengthen their position in the market and expand their geographical reach. For example, in 2020, Jacobs acquired a majority stake in PA Consulting, a global innovation and transformation consultancy.
Strategic Partnerships: Companies are forming strategic partnerships with other companies to share resources and expertise, reduce costs, and increase efficiency. For instance, in 2021, Hitachi ABB Power Grids partnered with Tensio TN AS, a leading Norwegian power grid operator, to provide efficient power transmission solutions.
Product Development: Companies are investing in research and development to develop innovative and efficient products that meet the evolving needs of customers. For example, in 2021, Siemens Energy launched a new HL-class gas turbine that offers high efficiency and flexibility for power generation.
Expansion: Companies are expanding their operations by entering new markets, building new facilities, and increasing their workforce. For instance, in 2021, Wartsila announced plans to expand its operations in Africa by opening a new office in Namibia.
ABB Ltd., Black & Veatch, Doosan Heavy Industries & Construction Co., Ltd., General Electric Company, Hyundai Engineering & Construction Co., Ltd., Larsen & Toubro Limited, Mitsubishi Electric Corporation, Mitsubishi Heavy Industries, Ltd., Schneider Electric SE, Siemens AG, Skanska AB, Sterling and Wilson Private Limited, Sumitomo Electric Industries, Ltd., TechnipFMC plc, Toshiba Corporation and many more.
By Power Generation:
By Power Status:
By Service:
By End-user:
By Region
The power EPC market size was estimated to be US$ 191.64 Billion in 2022.
The power EPC market is expected grow at a CAGR of 6.6% between 2023 to 2032.
The power EPC (Engineering, Procurement, and Construction) market is being driven by several factors, including the growing demand for electricity, increasing investments in the renewable energy sector, and the need for modernizing the existing power infrastructure.
The largest segment is the Distribution segment. This is because the distribution network consists of the last-mile infrastructure that delivers electricity to end consumers, such as households, businesses, and industries.
China and India are the largest markets for Power EPC in the region, with a significant number of power plant construction and modernization projects.
ABB Ltd., Black & Veatch, Doosan Heavy Industries & Construction Co., Ltd., General Electric Company, Hyundai Engineering & Construction Co., Ltd., Larsen & Toubro Limited, Mitsubishi Electric Corporation, Mitsubishi Heavy Industries, Ltd., Schneider Electric SE, Siemens AG, Skanska AB, Sterling and Wilson Private Limited, Sumitomo Electric Industries, Ltd., TechnipFMC plc, Toshiba Corporation among others, are the major players in this market.
The major growth strategies adopted by these companies are investing in research and development to develop innovative and efficient products that meet the evolving needs of customers.
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