Thermal Power Market Size, Share & Growth | Forecast [2031]

Report Description

Thermal Power Market Outlook 2031

The global thermal power market size was USD 1429.68 Billion in 2022 and is likely to reach USD 1881.77 Billion by 2031, expanding at a CAGR of 3.1% during, 2023–2031. The market growth is attributed to rising need for electricity.

Rising need for electricity is anticipated to boost the demand for thermal power. Thermal power burns fossil fuels to produce heat, heat is then used to turn water into steam, which powers a turbine, generating electric power or electricity. According to a report published by the International Energy Agency, the electricity demand around the world is expected to grow by 3% per year over 2023-2025.

Get Free Sample Report

Thermal power is also known as thermal power generation that converts heat energy to electric energy for commercial, industrial, and household applications. Thermal power uses steam power to rotate generators and create electricity by burning oil, liquid natural gas (LNG), coal, and other substances. Thermal power has the capacity to generate electricity from 400 megawatts to more than 800 megawatts.

The COVID-19 pandemic impeded the demand for thermal power. Government imposed several preventive measures such as lockdown and social distancing, resulting in temporary and even permanent closure of thermal power plants, significantly hampering the market. Moreover, a drastic decline was seen in the electricity demand due to the closure of heavy industries and commercial spaces such as malls, schools, offices, and others, which hindered the demand for thermal power. 

Impact of Artificial Intelligence (AI) on Thermal Power Market

The growing technology integrated artificial intelligence (AI) in thermal power, creating an immense opportunity in the market. Artificial intelligence in thermal power offers consistent and instantaneous analysis of energy generation.

AI-powered thermal power adjusts the thermal power plant equipment to achieve more efficiency, flexibility, and capacity. Moreover, companies are adopting artificial intelligence in thermal power to increase responsiveness to changes in the supply-demand balance.

Thermal Power Market Dynamics

Get Free Sample Report

Major Drivers

Increasing urbanization around the globe is projected to drive the market. Urbanization increases construction activities leading to energy consumption. Thermal power is required to fulfill the energy demand in urban areas.

Thermal power burns fuels such as oil, coal, and liquefied natural gas to generate high-temperature, and high-pressure steam. This steam rotates turbines and generates is electricity. Thus, growing urbanization is propelling the market. For instance,

• As per the report published by the World Bank, 56% of the world’s population, which is 4.4 billion lives in cities, and the number is expected to double by 2050.

Rising adoption of electric vehicles is anticipated to drive the market. Thermal batteries are used in electric vehicles, as they have high energy storage density to provide heat for EVs even in extreme environments. It increases driving range and prolongs battery life, which encourages their adoption in electric vehicles. For instance,

• As per a report, there were 20 million electric vehicles around the world in mid-2022, and is expected to reach 77 million by 2025.

Existing Restraints

Stringent regulation policies on thermal power plants are expected to restrict the market. Thermal power plants emit enormous volumes of smoke and pollutants, impacting the environment, which encourages the government to impose strict guidelines on their working. Moreover, rising demand for renewable energy to reduce C02 emissions generated by thermal power plants, thus hindering the market.

Emerging Opportunities

Growing industrialization in developing nations creates a lucrative opportunity in the market. Industries need electricity for operating industrial motors and machinery, lights, computer equipment, facility heating, cooling, and ventilation.

Thermal power is a major source of electricity in the world and provides electricity to industries. It converts the heat energy into steam, which generates electricity by rotating the turbine.

Scope of Thermal Power Market Report

The report on the market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Thermal Power Market Segment Insights

Fuel Type Segment Analysis

Based on fuel type, the thermal power market is categorized into coal, natural gas, nuclear, and others. The coal segment held a large share of the market in 2022 due to the conventional source of energy and wide availability.

Coal is widely used in thermal power to generate electricity, as they have chemical energy within itself. It converts stored chemical energy into thermal energy, mechanical energy, and, finally electrical energy.

Moreover, it produces more electricity than any other fossil fuel, as it produces a large amount of heat due to the presence of carbon in the coal. This encourages their adoption in thermal power. For instance,

• As per a report by the World Coal Association, coal remains the world’s single largest power source, generating 37% of global electricity.

The natural gas segment is anticipated to grow at a quick pace in the coming years owing to high thermodynamics and cost-effectiveness. Natural gas power is cheap and quick to produce, increasing their demand in thermal power. Moreover, it produces fewer pollutants like NOx, SOx, and particulate matter than coal and oil, which encourages their adoption in thermal power.

Get Free Sample Report

Capacity Segment Analysis

In terms of capacity, the global market is segregated into 400 MW, 400-800 MW, and more than 800 MW. The more than 800 MW segment dominated the market in 2022 and is expected to continue its dominance throughout the projection period due to the rising number of heavy industries and increasing energy consumption by households.

Heavy industry includes generators, turbo generators, turbines, transformers, switch gears, relays, and related accessories that require more than 800 MW of energy for cooling, temperature control, lighting, office equipment, and others. Recently, Bharat Heavy Electricals Limited (BHEL) secured a mega contract for setting up a 1,000 MW power project in UP (India) to add 24 million units every day to the grid.

Application Segment Analysis

Based on application, the thermal power market is divided into industrial, commercial, and residential. The industrial segment accounted for a major share of the market in 2022 due to growing infrastructure around the world.

Rapid growth in infrastructure led to an increase in the demand for thermal power in industries. Thermal power contributes the largest proportion of electricity to the industrial power grid and is widely used for drying, heating, cooling, and manufacturing in industries.

The commercial segment is projected to grow at a considerable pace in the coming years owing to an increasing number of commercial spaces such as stores, outlets, offices, malls, and others. Thermal power is adopted in these commercial spaces to provide electricity, as these spaces rely on electricity for most of their energy consumption needs.

Get Free Sample Report

Regional Outlook

In terms of region, the thermal power market is categorized into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific held a large share of the market in 2022 due to the presence of established thermal power companies such as Coal India Limited, NTPC, Jindal India Thermal Power ltd, and Chubu Electric Power Co., Inc.

Moreover, rising industrialization in the region is projected to boost the demand for thermal power, as industries require heavy energy consumption for operating industrial motors and machinery, lights, facility heating, and others. For instance,

• As per a report, the annual growth rate of industrial production in India registered a growth rate of over 11% in 2022.

The market in North America is expected to grow at a considerable pace during the projected period owing to the presence of an established and strong infrastructure for thermal power and rising consumption of electricity.

Moreover, increasing reliance on natural gas for electricity generation in the region is propelling the demand for thermal power as natural gas generates steam, which is then supplied to another turbine to produce electricity in thermal power plants. For instance,

• As per a report, the US generated around 1,575 terawatt hours of electricity from natural gas in 2021 and is expected to generate more in the coming years.

Get Free Sample Report