Captive Power Plant Market: Increasing Power Deficit Hampering Global Development

  • Industries and commercial complexes heavily rely on electricity for their operations. Their power requirements are usually met by state electricity boards or country power grids. However, there is an eminent threat of a power cut when industries are solely dependent on power grids for their operations.
  • Rise in gap between the demand for and the supply of electricity across the globe is hitting hard, especially on industries, due to continuous interruption in their operations
  • Growing industrialization and urbanization has resulted in surge in the demand for electricity from all sections of the society. Though power generation capacities are increasing, they are unable to meet surged power demand, resulting in increase in the power deficit.
  • Power deficit poses a roadblock in the development of any economy. Though countries are planning to reduce this deficit to a certain extent, they have still not been able to overcome it fully.
  • Power deficit puts a lot of strain on manufacturing and other industries, thereby directly hampering the overall growth of an economy and its GDP (gross domestic product)

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Key Drivers of Captive Power Plant Market

  • Increasing demand for continuous and high-quality power supply in industries and the commercial sector is a key driver of the global captive power plant market. Increase in power outages and fluctuations in power quality are major concerns for industries. These factors hamper the productivity of industries and result in major losses for companies. In order to minimize losses and enhance productivity, industries are implementing and integrating captive power plants in their vicinity to obtain reliable power supply at all times.
  • Reduction in transmission and distribution losses is another factor driving the global captive power plant market. Use of captive power plants results in on-site power generation, which eliminates the need for transmission and distribution of generated power, thereby cutting losses that are quite high in a utility grid infrastructure. This increases the overall efficiency and effectiveness of the power plant and the electricity generated.
  • Cost saving during peak hours is another major driver of the market. Power utility companies charge premium prices to industrial consumers for peak-hour power consumption. This increases operating costs incurred to these consumers. However, a captive power plant, if used in conjunction with a utility grid, helps in saving these costs by providing excess power and limiting power withdrawal from the utility grid.

High Capital and Operating Costs of Captive Power Plants May Restrain the Market

  • Building and integrating a captive power plant requires high capital investments, due to the level of infrastructure required and high machinery costs. Operating costs of these plants are also quite high, which directly depend on the fuel type and fuel cost. Thus, high capital and operating costs may restrain the captive power plant market during the forecast period.

Adoption of Renewable Energy to Provide New Opportunities

  • Adoption of renewable energy sources, such as solar and wind, for captive power generation provides new opportunities to the global captive power plant market. Using renewable energy not only helps in reducing emissions of greenhouse gases, especially CO2, but also attracts various incentives from government and regulatory bodies.
  • Renewable energy helps companies in meeting their environment-related objectives. It also benefits these companies by providing monetary or regulatory benefits for adoption of renewable energy. Thus, adoption of renewable energy is paving a new path for captive power plants and making them popular among industrial end-users.

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Asia Pacific Expected to Hold a Leading Share of the Global Captive Power Plant Market

  • Asia Pacific is anticipated to lead the global captive power plant market during the forecast period. It is likely to be followed by North America and Europe. The region is one of the major industrial centers expanding at a significant pace. This is estimated to boost the demand for captive power plants in the region from 2019 to 2027.
  • Developing countries in Asia Pacific, especially China and India, are witnessing rapid industrialization and urbanization, while the utility power grid in these countries are still unable to cope up with this rate of growth. Thus, industries in these countries are opting for renewable captive power plants, as they attract incentives from governments in the form of tax rebates.
  • In North America and Europe, aging grid infrastructure and high electricity prices are compelling industries to opt for captive power plants
  • Power shortages and frequent power cuts in several countries of Latin America and Middle East & Africa are likely to drive the demand for captive power plants in these regions during the forecast period.

Key Players in the Market

Prominent players operating in the captive power plant market include:

  • Clarke Energy
  • Wärtsilä
  • MAN Diesel & Turbo
  • Welspun Captive Power Generation Limited
  • Rolls-Royce Power Systems AG

Global Captive Power Plant Market: Research Scope

Global Captive Power Plant Market, by Fuel Type

  • Coal
  • Diesel
  • Natural Gas
  • Solar
  • Others (Including Biomass and Wind)

Global Captive Power Plant Market, by End-use Industry

  • Cement
  • Oil & Gas
  • Sugar
  • Metal & Mineral
  • Others (Including Textile)

This study by TMR is all-encompassing framework of the dynamics of the market. It mainly comprises critical assessment of consumers' or customers' journeys, current and emerging avenues, and strategic framework to enable CXOs take effective decisions.

Our key underpinning is the 4-Quadrant Framework EIRS that offers detailed visualization of four elements:

  • Customer Experience Maps
  • Insights and Tools based on data-driven research
  • Actionable Results to meet all the business priorities
  • Strategic Frameworks to boost the growth journey

The study strives to evaluate the current and future growth prospects, untapped avenues, factors shaping their revenue potential, and demand and consumption patterns in the global market by breaking it into region-wise assessment.

The following regional segments are covered comprehensively:

  • North America
  • Asia Pacific
  • Europe
  • Latin America
  • The Middle East and Africa

The EIRS quadrant framework in the report sums up our wide spectrum of data-driven research and advisory for CXOs to help them make better decisions for their businesses and stay as leaders.

Below is a snapshot of these quadrants.

1. Customer Experience Map

The study offers an in-depth assessment of various customers’ journeys pertinent to the market and its segments. It offers various customer impressions about the products and service use. The analysis takes a closer look at their pain points and fears across various customer touchpoints. The consultation and business intelligence solutions will help interested stakeholders, including CXOs, define customer experience maps tailored to their needs. This will help them aim at boosting customer engagement with their brands.

2. Insights and Tools

The various insights in the study are based on elaborate cycles of primary and secondary research the analysts engage with during the course of research. The analysts and expert advisors at TMR adopt industry-wide, quantitative customer insights tools and market projection methodologies to arrive at results, which makes them reliable. The study not just offers estimations and projections, but also an uncluttered evaluation of these figures on the market dynamics. These insights merge data-driven research framework with qualitative consultations for business owners, CXOs, policy makers, and investors. The insights will also help their customers overcome their fears.

3. Actionable Results

The findings presented in this study by TMR are an indispensable guide for meeting all business priorities, including mission-critical ones. The results when implemented have shown tangible benefits to business stakeholders and industry entities to boost their performance. The results are tailored to fit the individual strategic framework. The study also illustrates some of the recent case studies on solving various problems by companies they faced in their consolidation journey.

4. Strategic Frameworks

The study equips businesses and anyone interested in the market to frame broad strategic frameworks. This has become more important than ever, given the current uncertainty due to COVID-19. The study deliberates on consultations to overcome various such past disruptions and foresees new ones to boost the preparedness. The frameworks help businesses plan their strategic alignments for recovery from such disruptive trends. Further, analysts at TMR helps you break down the complex scenario and bring resiliency in uncertain times.

The report sheds light on various aspects and answers pertinent questions on the market. Some of the important ones are:

1. What can be the best investment choices for venturing into new product and service lines?

2. What value propositions should businesses aim at while making new research and development funding?

3. Which regulations will be most helpful for stakeholders to boost their supply chain network?

4. Which regions might see the demand maturing in certain segments in near future?

5. What are the some of the best cost optimization strategies with vendors that some well-entrenched players have gained success with?

6. Which are the key perspectives that the C-suite are leveraging to move businesses to new growth trajectory?

7. Which government regulations might challenge the status of key regional markets?

8. How will the emerging political and economic scenario affect opportunities in key growth areas?

9. What are some of the value-grab opportunities in various segments?

10. What will be the barrier to entry for new players in the market?

Note: Although care has been taken to maintain the highest levels of accuracy in TMR’s reports, recent market/vendor-specific changes may take time to reflect in the analysis.

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