Gas turbines: what market size in energy transition?

Combined heat and power systems are 20-30% lower-carbon than today’s gas turbines, as they capture waste heat. They are also increasingly economical to backstop renewable-heavy grids. Amidst uncertain policies, the ultimate market size for US CHPs could vary by a factor of 100x. We nevertheless find 30 companies well-placed in a $9trn global market.

What are CHPs and why do they matter? Gas turbines have been in use for power generation since the late 1930s. They usually range from 500kW to 300MW capacity. We outline how they work, why CHPs are more efficient, and why they could be well-placed for backstopping renewables on pages 2-3.

Five future markets could exist for CHPs. We have quantified the opportunity in large-scale power (page 4), industrial heat (page 5), landfill gas (page 5), EV fast-charging (page 6) and smaller-scale residential/commercial systems (page 6).

The ultimate market can thus be assessed by adding together each use case. But future policies are uncertain. We find the total addressable market in the US by 2050 could be anywhere ranging from $30bn to $3trn, i.e., an uncertainty level of 100x (pages 7-9).

Amazing progress is nevertheless being made, despite the policy uncertainty, as we have tracked new developments from thirty leading companies, aiming to make gas turbines more efficient for the energy transition (pages 10-11).