Coal isn't popular everywhere these days, particularly in Africa. Driven by economic growth and demand, electricity within sub-Saharan Africa is rapidly approaching supply capacity and in many countries exceeding it. The demand for new generation capacity is boosting growth in the steam turbine market for the region.
The sub-Saharan African steam turbine market is expected to grow considerably due to the cost efficiencies in power production attained from coal-fired power plants in coal-rich countries, according to Frost Sullivan research. The emergence of combined cycle technologies and development of the geothermal power industry in East Africa are also likely to open up new market opportunities.
The new analysis from Frost Sullivan called "The Sub-Sahara African Steam Turbine Market" finds that the market earned revenues of US$147.4 million in 2008 and estimates this to reach US$261.4 million by 2014. The markets covered in this research service by region are South Africa, Botswana, Zimbabwe, Kenya, Mauritius and Namibia.
In countries with an abundance of natural coal reserves, the development of coal-fired power plants is the most cost-effective means of power production. However, these cost efficiencies may fall away in the long-term due to the depletion of natural resources and potential carbon taxes or cap-and-trade mechanisms placed on industries with high carbon emissions.
Due to the high carbon emissions of coal fired power plants, and their subsequent contribution to global warming, carbon taxes or cap-and-trade mechanisms are often applied to power industries in countries, like South Africa, in order to decrease the national carbon footprint, explains Bruton. The application of these mechanisms will decrease the cost efficiencies attained through coal-fired power production and subsequently restrain growth of the market.
Nevertheless, due to the small carbon footprint of most countries in sub-Saharan Africa, and the current high demand for electricity in the region, this is anticipated to only have a significant effect on the rest of the region in the long term.
Competitors in the market should focus on the RD of clean coal as well as combined cycle technologies. Furthermore, after the successful growth of the geothermal and bagasse cogeneration power industry in Kenya and Mauritius, competitors should diversify their target market to incorporate renewable energy production.
Cheaper Chinese manufacturers have begun to enter the sub-Sahara African steam turbine market previously dominated by European manufacturers. Therefore, the current competitors in the market should either concentrate on the RD of high quality, reliable products that are able to attain market leading efficiencies in power production or implement cost price reduction strategies in order to remain competitive.
The Sub-Sahara African Steam Turbine Market is part of the Energy Power Growth Partnership Services programme, which also includes research in the following markets: The East African Genset Market, The West Africa Transformer Market and the South African Boiler Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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