The McIlvaine Company

$168 Billion FGD Market In Next 15 Years


Source: The McIlvaine Company

The market for systems to remove SO2 from power plants is booming. But the big news is that the good times will continue. In the latest forecast in the online, FGD World Markets, the McIlvaine Company predicts that power plants will spend $168 billion for flue gas desulfurization (FGD) systems in the period 2005-2020.

The validity of this estimate is critical to the manufacturers of steel alloys, ball mills, pumps, and other components which are in short supply. These manufacturers are not able to keep up with the present demand. So building new facilities is a short-term answer. But will the market hold up long enough to warrant the investment? The answer is: yes. The 100,000 MW of retrofit FGD systems required under the U.S. Clean Air Interstate Rule (CAIR) has been the driving force behind the present boom. But this number pales by comparison to the one million MW of FGD systems which will be required for new and retrofit applications worldwide in the next 15 years.

Critical to the estimate is the McIlvaine forecast that the world will be operating 2.2 million MW of coal-fired power plants in 2020 and that two-thirds of these plants will be equipped with FGD.

Over the last year an unprecedented number of coal-fired projects have been initiated around-the-world. China is the leader, but the U.S. and India also have a number of projects in planning and construction.

Even the most ardent backers of greenhouse gas reduction such as Germany have new coal-fired plants underway. In fact, the need for energy security and greenhouse gas reduction could actually lead to more rather than less coal firing under the following scenario. Ethanol from corn or cellulose creates major greenhouse gas reductions when it replaces petroleum. The best way to supply the energy to convert crops to ethanol is through the use of coal-fired generators. The net effect is substantial CO2 reduction even though coal burning generates some CO2.

The prediction that two-thirds of the world’s coal-fired generators will have FGD is backed by the fact that even the least developed countries such as Viet Nam have installed FGD systems. China is giving FGD investment a big priority. Japan and Europe already have nearly all coal-fired units equipped with FGD. Those that are not must be put in retirement mode by 2008.

Component manufacturers also need to know the split between wet and dry systems in order to determine the future market for their products. McIlvaine predicts that most systems will be wet but that dry lime will continue to maintain its present market share. Limestone will continue to be the major reagent choice, but lime will gain share in wet systems as well as being the only reagent for dry systems.

Novel systems will gain a small but significant market share by 2020.

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