Germany Power EPC Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Germany Power EPC Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The German power EPC market is expected to grow at a CAGR of more than 5% during the forecast period of 2022 - 2027. The COVID-19 outbreak in Q1 of 2020 led to the decline of power generation and delayed project executions across the country. Factors such as the increasing upcoming investments in power projects and growing governmental focus on renewable energy are likely to drive the German power EPC market during the forecast period. However, the phasing out of coal-based power plants, which account for a major share of power generation, is expected to hinder the growth of the power market.

Key Highlights

• The thermal power segment is likely to dominate the market due to rising country power demand.
• New and efficient technologies like supercritical and ultra-supercritical coal power plants and government initiatives to increase renewable energy’s share are expected to create several future opportunities for the German power EPC market.
• A rise in electricity generation through renewable energy is expected to drive the German Power EPC market during the forecast period.

Key Market TrendsThermal Power Expected to Dominate the Market

• Thermal power in the country is expected to dominate the market with rising power demand. Oil, natural gas, and coal are three primary traditional thermal sources used to generate electricity.
• In 2021, electricity generated from oil, natural gas, and coal accounted for over 45%, producing around 259.4 Billion kWh of the total electricity generated across the country, i.e., 582.9 Billion kWh. The growing number of natural gas-fired power plants in the nation will culminate in more EPC contracts in the thermal power sector in Germany.
• In July 2022, Germany’s two houses of parliament enacted emergency legislation to reactivate mothballed coal-fired power plants to subsidize electricity generation amid fears of gas shortages as Russia curbs capacity. The project is expected to create opportunities for the German EPC market during the project forecast period.
• Moreover, in July 2021, Ansaldo Energia held the foundation laying ceremony of the Irsching 6 thermoelectric plant. The company is an engineering, procurement, and construction (EPC) contractor, turbine work for a gas-fired plant in Germany. Irsching 6 is one of the company’s two turnkey power plant projects currently being implemented in Germany (in addition to Marbach 4). A 300-MW AE94.3 gas turbine and generator built by Ansaldo Energia in Genoa is set to be delivered and installed on the foundations.
• Hence, the rising power consumption pattern and all the factors mentioned above are likely to increase the market growth of power EPC during the forecast timeline.

Increasing Renewable Power Generation to Drive the Market

• Increasing electricity generation, favourable government policies toward the adoption of renewable energy sources, and a rising focus on reducing carbon emissions are expected to boost the German Power EPC Market at a significant rate.
• According to the Federal Association of Energy and Water Management, in 2021, the country witnessed gross electricity generation from solar of around 51.2 terawatt hours, approximately 162% more than the same period of 2011. Germany aims to install 215GW of solar capacity by 2030, with 22GW of capacity additions per year. The new renewable energy law also increases the current expansion rate of onshore wind energy to 10GW per year so that by 2030 115GW of power will come from wind sources.
• In December 2021, Germany's new coalition government increased its renewable energy target to 80% of power generation by 2030. It aims to quadruple solar capacity to 200GW through a massive deployment of rooftop panels.
• Furthermore, The government plans to reserve 2% of land for onshore wind power and triple offshore wind capacity to 30GW. These measures will be implemented to strengthen carbon emissions pricing, reduce developers' administrative delays, and accelerate grid expansions to accommodate renewable energy.
• Therefore, based on the above-mentioned factors, upcoming projects and government support are expected to drive the power EPC market in Germany during the forecast period.

Competitive Landscape

The Germany Power EPC Market is moderately fragmented. The key EPC Developers in the market include Fluor Ltd, John Wood PLC, McDermott International Inc., Saipem SpA, Wärtsilä Oyj Abp, EPC Engineering & Technologies GmbH, Empowery GmbH, and Original Equipment Manufacturers (OEMs) players include General Electric Company, Siemens Energy AG, ABB Ltd, Schneider Electric SE, and Eaton Corporation PLC. among others.

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• The market estimate (ME) sheet in Excel format
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