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2022

Captive Power Generation Market

Captive Power Generation Market Size, Share, Competitive Landscape and Trend Analysis Report by Technology Type (Heat Exchanger, Turbines, Gas Engines, Transformers, and Others), Fuel Type (Diesel, Gas, Coal, and Others), Ownership (Single and Multiple), and End Use (Residential, Commercial, and Industrial): Global Opportunity Analysis and Industry Forecast, 2021-2030

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Author's: Marpu Vinod| Prakhar Jain | Eswara Prasad
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Captive Power Generation Market Analysis - 2030

The global captive power generation market size was valued at $494.7 billion in 2020, and is projected to reach $823.1 billion by 2030, growing at a CAGR of 5.3% from 2021 to 2030. Captive power generation plant is a facility that produces electricity used and managed by industrial and commercial energy consumers for their own energy consumption. Captive power generation plants are commonly used by energy intensive industries where the continuity and quality of the power supply is crucial such as in cement manufacturing industry, iron & steel manufacturing industries, chemical plants, and aluminum smelters. Captive power generation plant requires various equipment to generate power such as heat exchangers, boilers, generators, transformers, turbines, and photovoltaic panels. 

Rapid industrialization and technological advancements around the world have significantly increased the demand for electricity and power in the market. As energy-intensive industries in developing countries grow, cross-subsidies in electricity rates exist, and increase in power generation cost stimulate the growth of captive power generation market. The industrial sector further consumes 54% of all energy produced in the world. The rapid development of developing countries, especially in Asia-Pacific, which is one of the largest markets for captive power generation, due to light and stable production base of aluminum, steel, and copper.

Captive-Power-Generation-Market,-2021-2030

The captive power generation consists of an assembly of equipment such as electricity precipitators, transformers, heat exchangers, generators, boilers, and turbines. The capital and operational cost of captive power generation depend on factors such as location, technology, and fuel choice. The running cost of the captive power generation is directly proportional to the cost of fuel. The captive power generation plants that are dependent on the fossil fuels have to face frequent price fluctuations of the international price of crude oil. This is a major factor hampering the growth of the captive power generation market, especially related to fossil fuels.

Residential and commercial construction projects are on the rise in developing countries, and developed countries are having a significant impact on captive power generation. An increase in infrastructure activities will increase demand for steel, cement, and other raw materials. In addition, surge in demand for these raw materials have high demand for electricity, which positively impacts the growth of the captive power generation market in the coming years.The global captive power generation market is segmented on the basis of technology type, fuel type, ownership, end use, and region. 

Depending on technology type, the market is categorized into heat exchanger, turbines, gas engines, transformers, and others. In terms of value, the gas engines segment accounted for the largest share in 2020. On the basis of fuel type, the global captive power generation market is segmented into diesel, gas, coal, and others. In terms of value, the coal segment accounted for the largest share in 2020. 

On the basis of ownership type, it is divided into single and multiple. In terms of value, multiple segment accounted for the largest share in 2020. The end use of captive power generation market includes residential, commercial, and industrial. In terms of value, the industrial segment accounted for the largest share in 2020.

Region wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA. North America accounted for the largest share of the market in 2020, with Asia-Pacific being the fastest growing region. The major companies profiled in this report include ADC LLC, ArcelorMittal S.A., Clarke Energy, General Electric Company, Hindalco, Kohler Co., PBS Group, Reliance Industries, Siemens, and Wartsila. 

In addition to the abovementioned companies, Bharat Heavy Electrical, Doosan Corporation, Essar Steel, Thermax, and NALCO India are competing for the share of the market through product launch, joint venture, partnership, and expanding the production capabilities to meet the future demand for the captive power generation in the forecast period.

Captive Power Generation Market, By Region

Asia-Pacific occupies the largest part of the captive power generation market and consists of countries such as India, China, Japan, South Korea, and rest of Asia-Pacific. Asia-Pacific garners maximum market share as compared to other regions, due to the presence of developing and huge population base countries such as India and China. The International Energy Agency (IEA) released a report on energy consumption in building estimating that by 2030, the energy used by household appliances will increase with Asia-Pacific being the region with prominent growth. In addition to this, the presence of huge population and surge in the economic investments and development India towards the world manufacturing hub will increase the demand for electricity, which will stimulate the captive power generation market growth. 

Captive Power Generation Market
By Region
2030
Asia-pacific 
North America
Europe
LAMEA

Asia-Pacific holds a dominant position in 2020 and would continue to maintain the lead over the forecast period.

Captive Power Generation Market, By Equipment Type

The gas engine segment dominates the global captive power generation market. A gas engine is an internal combustion engine that operates on gas fuels such as coal gas, producer gas, biogas, landfill gas, and natural gas. Gas engines have a wide range of applications such as power generation, cogeneration, and mechanical propulsion. The main function of a gas engine used in a gas power plant is to supply power to help the generator generate electricity. Environmental regulations such as the Kyoto Protocol and the Paris Agreement support the reduction of carbon dioxide emissions. Extensive applications in combined heat and power plants, automotive, marine, and manufacturing pave the way for future gas engine growth. According to the IEA, electricity demand in 2018 increased by 4%, almost twice as fast as total energy demand. This increase in electricity demand stimulates the demand for gas engine-powered generators.

Captive Power Generation Market
By Technology Type
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Gas Engine Technology type is projected to create abundant $ opportunity till 2030

Captive Power Generation Market, By Fuel Type

The coal segment dominates the global captive power generation market. Coal generates about a third of the world’s electricity. A coal-fired power station is a type of fossil fuel power station. Coal is pulverized and then burned in a pulverized coal-fired boiler. In 2020 the total number of plants started falling as they are being retired in Europe and America, although still being built in Asia, almost all in China. The UN Secretary General has said that OECD countries should stop generating electricity from coal by 2030, and the rest of the world by 2040. With an increasing demand for electricity, the coal industry is expected to generate electricity. Abundant availability and low cost compared to other power technologies are expected to drive market growth. Asia-Pacific is a potential region that contributed to global coal production in 2020. The presence of countries like India and China has created the demand for coal as these countries are still investing in the development of coal-fired power plants.

Captive Power Generation Market
By Type
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Coal fuel segment is projected to create abundant $ opportunity till 2030

Captive Power Generation Market, By Ownership

The multiple segment dominate the global captive power generation market. A captive power plant can also serve multiple stakeholders through a group captive mechanism, if it satisfies the following conditions such as the beneficiaries should hold at least 26% of the equity and together consumer 51% of the power generated during the year. Though dedicated, it may also inject electricity to the gird. The government policies and advantages of captive power generation for commercial and industrial facilities are driving the growth of the market. Rapid surge in industrialization and the increasing demand for electricity among the manufacturing industries due to the application of automation to improve production and meet the demands of consumers led to the investment of captive power generation.

Captive Power Generation Market
By Ownership
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Multiple is projected to create abundant $ opportunity till 2030

Captive Power Generation Market, By End User

The industrial segment dominates the global captive power generation market. In industrial facilities especially in large scale manufacturing plants which are energy intensive consumers have stimulated the growth of the captive power generation. The increase in the cost price of industrial energy from national grids has put pressure on the manufacturing plants to reduce the profits. In addition to this, the advantages of the long-term installation of the solar power plants by the manufacturing plants will reduce the electricity bills and also may earn excess income by selling remaining electricity is major driving factor of industrial captive power generation market. The increase in demand for various products especially related to automotive sector which is power consuming industry, hence Tesla, TATA, and BYD invested in solar power generation system on top of their manufacturing plants. Tesla has invested in Giga factories across the globe, where solar energy is used as power source. The presence of investment of $80 billion in regards with data base related companies such as Apple, Microsoft, Google, and Facebook have increased the demand for captive power generation, as these datacenters require huge power to operate.  

Captive Power Generation Market
By End Use
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Industrial segment is projected as the most lucrative segment.

Covid-19 Analysis:

COVID-19 has severely impacted the global economy with devastating effects on global trade, which has simultaneously affected households, business, financial institution, industrial establishments and infrastructure companies. The novel coronavirus has affected several economies ad caused lockdown in many countries, which limited the growth of the market. The shutdown of industrial manufacturer led to the decline in the demand for electricity, which led to decline in the development of the captive power generation market. The decrease in infrastructure and construction development operations during the outbreak has a negative impact on the development of the market, due to shutdown of cement and iron & steel manufacturing industries. 

Key Benefits For Stakeholders

  • This report provides a detailed quantitative analysis of the current captive power generation market trends and estimations from 2020 to 2030, which assists to identify the prevailing opportunities. 
  • An in-depth analysis of captive power generation market across the globe is anticipated to provide a detailed understanding of the current trends to enable stakeholders formulate specific plans.
  • A comprehensive analysis of the factors that drive and restrain the growth of the market is provided.
  • Region-wise and country-wise market conditions are comprehensively analyzed in this report.
  • The projections in this report are made by analyzing the current trends and future market potential from 2020 to 2030 in terms of value.
  • An extensive analysis of various regions provides insights that are expected to allow companies to strategically plan their business moves.
  • Key market players within the market are profiled in this report and their strategies are analyzed thoroughly, which help to understand the competitive outlook of the global captive power generation industry.

Captive Power Generation Market Report Highlights

Aspects Details
Captive Power Generation Market By Technology Type
By Technology Type
  • Heat Exchanger
  • Turbines
  • Gas Engines
  • Transformers
  • Others
Captive Power Generation Market By Fuel Type
By Fuel Type
  • Diesel
  • Gas
  • Coal
  • Others
Captive Power Generation Market By Ownership
By Ownership
  • Single Ownership
  • Multiple Ownership
Captive Power Generation Market By End User
By End User
  • Residential
  • Commercial
  • Industrial
Captive Power Generation Market By Region
By Region
  • North America  (U.S., Canada, Mexico)
  • Europe  (Germany, France, Italy, Spain, UK, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, South Korea, Rest of Asia Pacific)
  • LAMEA  (Brazil, Saudi Arabia, South Africa, Rest of LAMEA)

Analyst Review

The global captive power generation market is expected to gain high traction during the forecast period, owing to government regulations policies to develop the potential untapped renewable energy resources.

Rapidly increasing electricity demand, government policies toward the use of green energy, and the development of various eco-friendly power generation production technologies are some of the key factors expected to drive demand for the electric captive power generation market during the forecast period. In addition to this, major manufacturers are constructing indoor power plants to meet the huge demand for electricity to secure competitiveness in the face of rising electricity rates. Growing demand for metals, chemicals, and cements owing to increasing applications in construction, automotive, and electronics industries is expected to drive the development of the domestic power generation market in the coming years.

The CXOs further added that the outbreak of the novel coronavirus led to the investment of governments in developing countries toward the hospital infrastructure and renovation of old hospitals have increased the demand for captive power generation equipment. The government policies towards zero carbon emission and policies to the sales of the excess power produced from power plant have fueled the growth of the market.

 

 

Author Name(s) : Marpu Vinod| Prakhar Jain | Eswara Prasad
Frequently Asked Questions?

Residential, Commercial, and Industrial are the potential customers of Captive Power Generation industry.

Multiple Ownership segment holds the maximum share of the Captive Power Generation market.

To get latest version of captive power generation market report can be obtained on demand from the website.

Agreement, acquisition and Joint-venture are the key growth strategy for Captive Power Generation market players in order to attract the end users.

ADC LLC, ArcelorMittal S.A., Clarke Energy, General Electric Company, Hindalco, Kohler Co., PBS Group, Reliance Industries, Siemens, and Wartsila.

The top ten market players are selected based on two key attributes - competitive strength and market positioning

Rapid industrialization and technological advancements in the renewable energy power generating resources, the increase in energy intensive industries in developing countries and increase in cost price of energy for industrial purposes are the major driving factors and opportunities in the Captive Power Generation market.

Asia-Pacific will provide more business opportunities for Captive Power Generation in future.

Increase in investment in renewable energy resources due to depletion of fossil fuels and the surge in the population in the developing countries such as India, and China. The government initiative to support renewable energy in the residential scale and the improvement in the policies regarding the Renewable energy certificates are the current trends expected to influence the Captive Power Generation Market in the next few years.

Residential, Commercial, and Industrial HVAC equipment and the need for un-interrupted power supply are key applications expected to drive the adoption of Captive Power Generation.

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Captive Power Generation Market

Global Opportunity Analysis and Industry Forecast, 2021-2030