NEWS RELEASE April 2018
Coal Fired Boiler Repair and Replace Market Greatly Exceeds Repair and Replace Market for Other Generation Sources
Coal fired power capacity in the world will only be growing at one percent but there is a huge replace and repair market which will continue to exceed that of other generation sources. Manufacturers of consumables will find that 99 percent of their market is at existing plants while suppliers of valves, pumps and compressors will find that the market at existing plants is ten times larger than for new plants. This is based on a product life of 10 years. So, 10 percent of the products will be replaced each year compared to an equivalent of only one percent which will be sold for new plants.
| World Coal Fired Capacity MW | ||
| Region | CAGR % | Replace/New |
| Total | 1 | 10 |
| Africa | 4 | 2.5 |
| CIS | 2 | 5 |
| East Asia | 3 | 3.3 |
| Eastern Europe | 2 | 5 |
| Middle East | 2 | 5 |
| NAFTA | (5) | Replace |
| South & Central America | 0 | 3.3 |
| West Asia | 7 | 1.4 |
| Western Europe | (2) | Replace |
This high ratio of replace to new requires an adjustment in sales strategy. Most suppliers rely on sales leads rather than targeted efforts. The replace market is predictable and needs to be addressed by targeted efforts months in advance of any order. Most large coal fired boiler operators are embracing IIoT and data analytics. This gives them the ability to make purchases based on lowest total cost of ownership. Fewer than 200 coal fired utilities will buy most of the replacement equipment. Profiles and plans for each of these utilities are included in the 42EI Utility Tracking System.
Utilities replace entire boiler systems rarely if ever. By contrast new dust collector bags are purchased every two years and treatment chemicals are purchased continuously. So, the treatment chemicals market is 99 percent base on existing plants and only one percent for new plants.
| Replacement Opportunity Each Year/First Year Sales Revenue | |
| Product | |
| Air Pollution Systems, Coal Fired Boilers | 0.02 |
| Valves, Pumps, Compressors | 10 |
| Seals, Filter Bags, Nozzles | 50 |
| Cartridges, Instruments | 99 |
| Filter Cloths | 99 |
| Chemicals | 99 |
The replacement market is much more predictable. The market for air pollution control systems can vary by 1000 percent from one year to the next whereas the market for consumables only fluctuates by a few percent a year.
| Order Volatility in % Year to Year | |
| Product | % |
| Air Pollution Control Systems | 1000 |
| Coal Fired Boilers | 300 |
| Valves, Pumps, Compressors | 7 |
| Seals, Filter Bags, Nozzles | 3 |
| Cartridges, Instruments | 3 |
| Filter Cloths | 3 |
| Chemicals | 3 |
The advent of IIoT and the power of the Industrial Internet of Wisdom to help utilities make better choices along with the concentration of purchasing among 200 utilities is causing a sea change in the market.
The projects and profiles relative to the 200 top utilities is found in the 42EI Utility Tracking System
A 5-step business program to navigate the sea change is discussed at www.mcilvainecompany.com
Market reports on valves, pumps, filters, chemicals, and instrumentation are found at: http://home.mcilvainecompany.com/index.php/markets
