OREANDA-NEWS. October 28, 2014. China's gas power generation capacity is expected to rise from 43.8 GW in 2013 to 85.5 GW by 2020, according to research and consulting firm GlobalData. Driven by China's need to adopt cleaner fuels for power generation and reduce its reliance on coal -- which accounts for 62 percent of the country's total installed capacity -- GlobalData predicts the country will see a boost in gas turbine installations.

In 2013, China's gas power generation market was valued at USD652 million and is forecast by GlobalData to increase to almost USD 1.7 billion by 2017. A rise in infrastructure investments, expansion in the country's distributed power generation market, and favorable policies supporting gas power generation will also allow the gas turbine market to grow in this period, according to GlobalData.

"While gas power generation is still at a nascent stage in China, improvements in the country's gas infrastructure mean that it has experienced rapid growth, from 16.7 GW in 2007 to 43.8 GW in 2013, leading to a positive impact on gas turbine installations," said Sowmyavadhana Srinivasan, senior power analyst, GlobalData. "Rising electricity demand will also drive the market, with over 35 GW of capacity coming online between 2014 and 2020, making China a major global player."

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Gas turbines of more than 200 MW will account for approximately 49 percent of capacity additions during this period, followed by 30 MW to 120 MW turbines with a share of 35 percent, Srinivasan said.

However, a potential rise in China's natural gas prices could pose a challenge to further growth in the country's gas power generation capacity and consequently its turbine market for thermal power.

"The future of natural gas prices for China's power sector is uncertain. The country relied heavily on natural gas imports to meet domestic demand during 2006 to 2013, and increasing dependence could force the Chinese government to align domestic gas prices with international standards," said Srinivasan. "Such an increase could adversely affect utilities' profit margins, as electricity prices are also regulated by the government, meaning that fuel cost rises cannot be passed directly to customers."