Global Gas Engine Market

1
GLOBAL GAS ENGINE MARKET

(2018 - 2023)
Report
Report Global Gas Engine Market

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TABLE OF CONTENTS 2
1. EXECUTIVE SUMMARY 5. VALUE CHAIN ANALYSIS
2. RESEARCH METHODOLOGY 6. INDUSTRY ATTRACTIVENESS: PORTER'S FIVE FORCES ANALYSIS
2.1 Scope of the Study 6.1 Bargaining Power of Suppliers
2.2 Market Definition 6.2 Bargaining Power of Consumers
2.3 Study Assumptions 6.3 Threat of New Entrants
2.4 Study Deliverables 6.4 Threat of Substitutes
2.5 Research Phases 6.5 Degree of Competition
3. MARKET OVERVIEW 7. MARKET SEGMENTATION AND ANALYSIS - BY TYPE (Overview, Market

Size, and Demand Forecast, till 2023, Recent Trends, and Developments)
3.1 Introduction
7.1 By End-user Industry
3.2 Market Size and Demand Forecast, till 2023
7.1.1 Utilities
3.3 Recent Trends and Developments
7.1.2 Manufacturing
3.4 Government Policies and Regulations
7.1.3 Oil and Gas
3.5 Regional Hotspots
7.1.4 Transportation
4. MARKET DYNAMICS
7.1.5 Other End-user Industries
4.1 Drivers
7.2 By Fuel Type
4.2 Restraints
7.2.1 Natural Gas
4.3 Opportunities
7.2.2 Other Fuel Types

TABLE OF CONTENTS 3
8. REGIONAL MARKET ANALYSIS - BY GEOGRAPHY (Overview, Market

9.7 Hyundai Heavy Industries Co. Ltd
Size and Demand Forecast, till 2023, Recent Trends, and Developments)
9.8 Man SE
8.1 North America
9.9 General Electric Company
8.2 Europe
9.10 Kawasaki Heavy Industries Ltd
8.3 Asia-Pacific
9.11 JFE Engineering Corporation
8.4 South America
9.12 Liebherr Group
8.5 Middle East & Africa
10. COMPETITIVE LANDSCAPE
9. KEY COMPANY PROFILES* (Overview, Products, Financials**, Recent 10.1 Merger and Acquisitions, Joint Ventures, Collaborations, and
Developments, and Analyst ‘s View) Agreements
9.1 Caterpillar Inc. 10.2 Strategies Adopted by Leading Players
9.2 Cummins Inc. 11. DISCLAIMER
9.3 Siemens AG
* List of Companies is not Exhaustive. ** Subject to Availability
9.4 Rolls-Royce Holdings PLC
9.5 Wartsila Oyj Abp
9.6 Mitsubishi Heavy Industries Ltd

4
1. EXECUTIVE SUMMARY

1. EXECUTIVE SUMMARY 5
The global gas engine market (henceforth referred to as the market studied) was Gas Engine Market: Size and Demand Forecast in USD billion,
estimated to be USD 4.07 billion in 2017, and it is expected to reach USD 5.59 billion
Global, 2017-2023
1 by 2023, at a CAGR of 5.74% during 2018-2023 (henceforth referred to as the
forecast period).
In USD billion
5.59
5.29
4.75 5.01
The two major factors driving the market are lower gas prices, which have 4.28 4.51
4.07
declined by more than 30% in the past few years, and strict emission regulations
on marine fuel, which are resulting into increasing adoption of LNG-fueled
2 vessels. Furthermore, expanding gas transportation infrastructure is supporting
the increasing share of gas in primary energy consumption, and hence, gas
engines.
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
Source: Mordor Intelligence Analysis
Higher flexibility and quick-startup of the gas engine are resulting in a shift from Gas Engine Market: Size and Demand Forecast in USD billion,
gas turbines to gas engines among the utility operators, especially in small- to by Region, Global, 2017-2023
3 mid-size capacity range in recent times. Some of the operators are replacing the 0.65
0.62
existing gas turbines with gas engines in their power generation units. 0.54 0.57
0.51 0.48
0.48 0.46
0.45 0.44
in USD billion
0.40 0.42
0.37 0.39 1.34 1.43
1.19 1.26
1.05 1.12
However, the market is restrained by the growing competition from the 0.99
1.33 1.40 1.47
1.15 1.21 1.27
renewable sector, whose intermittency challenge is now being addressed 1.09
by integrating energy storage systems with solar and wind power systems. 1.34 1.41 1.48 1.56
4 1.15 1.21 1.27
Also, the increasing use of electric vehicles is hindering the market growth. 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
Supporting government policies for renewables are further driving these North America Europe Asia-Pacific South America Middle East & Africa
restraining factors.

1. EXECUTIVE SUMMARY 6
Among end users, the utilities and transportation sectors, together, accounted for Gas Engine Market: Size and Demand Forecast in USD
around 65% of the market in 2017, and are expected to continue to be the largest billion, by Fuel Type, Global, 2017-2023
5 segments during the forecast period. The growth in these sectors is supported by
0.43
growth in gas-fired power plants, CHP plants, and increasing use of CNG-fueled 0.39 0.41
0.36
in USD billion
0.32 0.34
vehicles and LNG-fueled marine vessels. 0.31
Gas engines using natural gas as a fuel accounted for more than 90% of 4.63 4.88 5.15
3.96 4.17 4.39
3.76
the market share by fuel type in 2017, due to the widespread use of natural
gas in the power and transportation sectors. Among the other types,
6 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
though biogas engines have witnessed increasing use in CHP plants and
Natural Gas Special Gas
vehicles, cost of biogas production is hindering the growth of biogas Source: Mordor Intelligence Analysis
engines.
Gas Engine Market: Size and Demand Forecast in USD
North America accounted for more than a quarter of the market in 2017,
billion, by End User, Global, 2017-2023
followed by Europe and Asia-Pacific. However, Asia-Pacific is expected to
7 register the highest growth rate during the forecast period, mainly due to 0.59
0.52 0.56
0.49
in USD billion
the double-digit annual growth rate in gas-fired power generation and 0.43 0.46 1.69
0.41 1.52 1.60
1.37 1.45
increasing number of CNG-fueled vehicles in recent times. 1.24 1.31 0.47
0.43 0.45
0.37 0.39 0.41 0.86
0.35 0.74 0.78 0.82
0.64 0.67 0.70
The major players in the market include General Electric, Wartsila, Rolls- 1.76 1.86 1.97
1.42 1.50 1.58 1.67
Royce, Caterpillar, Cummins, and MAN SE. Other players include
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
8 Siemens, Mitsubishi Heavy Industries, Kawasaki Heavy Industries Ltd, JFE Utilities Manufacturing Oil and Gas
Engineering Corporation, Liebherr Group, and Hyundai Heavy Industries Source: Mordor Intelligence
Analysis
Co. Ltd.
7
2.1 Scope of the Study
2.2 Market Definition
2. RESEARCH METHODOLOGY 2.3 Study Assumptions
2.4 Study Deliverables
2.5 Research Phases

2.1 SCOPE OF THE STUDY 8
Global Gas Engine Market
End-user Industry Fuel Type Geography
Utilities Natural Gas North America
Manufacturing Other Fuel Types Europe
Oil and Gas Asia-Pacific
Transportation South America
Other End-user Industries

Middle East & Africa

2.2 MARKET DEFINITION 2.3 STUDY ASSUMPTIONS 9
• The base currency considered was the US Dollar (USD). Conversion of other
• Gas engine in this market report is defined as internal combustion (IC) currencies to USD was considered on the basis of the average exchange rate
engine relying on fuels, such as natural gas, and special gases, such for the respective review period years. The exchange rate conversion for the
as coal gas, biogas, producer gas, and landfill gas. Combustion occurs forecast period was determined according to the base year’s conversion rates.
intermittently in the gas engine. • Market size estimations for the forecast years were in real terms. Inflation is not
• The market size of gas engine is the sale of new products only, and part of the pricing, and the average selling price (ASP) was kept constant
does not include the spare part sales and after-sales services. throughout the forecast period for each country.
• It is also assumed that the market does not take any unexpected turns,
• The report does not include gas turbines, which are also a type of IC
positively or negatively. Changes that may occur in the market, owing to any
engines, where continuous combustion of air-fuel mixture takes place
unforeseen calamities, natural or others (like natural disasters, wars etc.), have
to produce hot gas that spins the impellers of turbine.
not been considered.

2.4 STUDY DELIVERABLES 10
AIM AND OBJECTIVE OF THE STUDY
To identify and analyze factors that are instrumental in changing the gas engine market scenario, along with important developments,
rising prospective opportunities, supply chain analysis, profiles of key players, and competitive landscape.
COMPANIES COMPANIES
STUDY PERIOD BASE YEAR
PROFILED ANALYZED
2016 - 2023 2017 12 20+
GEOGRAPHICAL SCOPE – GLOBAL SEGMENTS COVERED
Market Dynamics
Porter's Five Forces Analysis
Market Segmentation by end-user

` Industry, Fuel Type, Geography
Profiles of Key Players
Competitive Landscape
Supply Chain Analysis

2.5 RESEARCH PHASES 11
• Gas Engine Manufacturers

• Independent Service providers
• Company Annual Reports • Industry Experts
• End-user Industries
• Journals • Consultants
• Government Bodies and Industry
• Government Publications • Subject-matter Experts
Associations • Forecasting Model
• Paid Data Sources • In-house Experts
SECONDARY DISCUSSION PRIMARY DATA ECONOMETRIC EXPERT REPORT

RESEARCH GUIDE RESEARCH TRIANGULATION MODELLING VALIDATION WRITING
• Analyzing and Validating Insights from

• Company-related Queries • Insights Garnered from
both Secondary and Primary
• Market-related Queries Data and Forecasts,
Researches to Arrive at Close
• Company Financials Compiled into One Report
Estimates

12
3.1 Introduction
3.2 Market Size and Demand Forecast, till 2023
3. MARKET OVERVIEW 3.3 Recent Trends and Developments
3.4 Government Policies and Regulations
3.5 Regional Hotspots

3.1 INTRODUCTION 13
• A gas engine is an internal combustion engine that runs on natural gas, or other • Also, the market is restrained by the increasing adoption of electric vehicles in
gases, such as coal gas, producers gas, biogas, and landfill gas. Gas engines the developed and emerging economies, which in turn, is eating up a share of
find application in the power generation, automotive, marine industry, and oil and CNG-based vehicles in the transportation sector, as the world moves toward a
gas industries, among others. cleaner fuel matrix.
• Traditionally, the market is driven by the increasing low gas prices, which is • As a result, in the transportation sector, the marine segment is expected to
supporting the development of gas-fired power generation and CNG vehicles create more opportunity for the market than the road segment.
across the different sector.
• Europe has been the leading player, in terms of power generation from gas,
• Furthermore, factors, such as flexibility and quick-startup capability and lower followed by the Middle East and North America, which together accounted for
maintenance of gas engines, are resulting in its increasing adoption, especially in around 84% of the global net additional generation between 2015-2017. The
small to the mid-sized power plant, and thus, are negatively affecting the gas benefits of the gas engine over gas turbine have resulted in its increasing
turbine market. adoption of gas engines in the power sector in the past few years.
• As a result, the gas engines are also eating up the share of gas turbines in CHP • Outside these regions, China has been the major market for gas engines in the
plants, especially in Europe and North America. power sector. During the same period, net additional electricity generation from
the gas-fired power plant in China was around a third of that in Europe, the
• Recently, regulations on sulfur content in the marine fuel put by International
Middle East, and North America, individually.
Maritime Organization (IMO) have been encouraging the new marine vessel to
be LNG-based instead of oil. Such development is giving an additional boost to • Among the type of fuel, natural gas has dominated the market. However, in a
the gas engine market. bid to decarbonize the economy, several countries are promoting biogas-driven
vehicles. Incentives, such as tax exemption, are further driving the adoption in
• However, lack of gas transportation infrastructure in less developed countries in
countries such as France, Scandinavian, the United Kingdom, and China.
Asia-Pacific, Africa, and South America, has been hindering the growth of gas
engines.
3.2 MARKET SIZE AND DEMAND FORECAST, TILL 2023 14
Gas Engine Market: Size and Demand Forecast in USD billion, Global, 2017-2023
5.59
5.29
5.01
4.75
4.51
4.28
In USD billion
4.07
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)

3.3 RECENT TRENDS AND DEVELOPMENTS 15
TRUMP’S NEW POWER PLANT PLAN
• In August 2018, Trump unveiled a proposal that would empower states to establish emission standards for coal-fired power plants rather than speeding their
retirement – a U-turn to the Obama administration’s policy on climate policy.
• The Environmental protection Agency estimated that the measure is expected to affect more than 300 US plants, providing companies with an incentive to keep
coal plants in operation, rather than replacing them with cleaner natural gas or renewable energy projects.
GROWTH IN GAS-FIRED POWER PLANT
• Gas-fired power generation growth slowed down in 2017 to 1.6%, mainly due to a decline in the United States, which witnessed an increase in gas prices. While
in the rest of the world, the generation grew by 4.6%, led by China and the European Union.
• In Asia-Pacific, gas-fired power generation was driven by healthy electricity demand and measures to reduce local air pollution.
• Despite the positive trend in the generation, FID (Final Investment Decisions) for new gas-fired power plants capacity fell to 50 GW in 2017, the lowest in over a
decade. The slowdown was mainly due to a decline in projects in the United States and the Middle East. However, FID for gas was more than that for coal.
TRANSITION IN LARGE COMMERCIAL

BUILDINGS/CAMPUSES
• In recent years, the share of gas engines in the large commercial buildings/campuses, which is dominated by gas turbines, has increased significantly.
Furthermore, the gas turbine suppliers are coming under pressure with more gas engine products in the large- (>3 MWe) size range coming to the market,
supported by improved performance of gas engines and a higher demand for flexible operation.

3.4 GOVERNMENT POLICIES AND REGULATIONS 16
2020 IMO FUEL SULFUR REGULATIONS
• International Maritime Organization (IMO) has lowered the allowable sulfur content in marine fuel from the current 3.5% to 0.5% effective from 1st January 2020.
The marine industry can switch to either low-sulfur marine gas oil (MGO) with sulfur content less than 0.5%, or ultra-low sulfur fuel oil (ULSFO) of 0.1% maximum
sulfur content. Other alternatives include installing scrubbers and or using LNG as fuel. LNG as a marine fuel has witnessed significant development, in terms of
adoption, in the recent past, with 247 LNG-fueled ships being operational and more than 100 LNG-fueled ships are either ready or on order.
NEW CHP ACT IN GERMANY
• The new CHP Act focuses on developing highly efficient CHP plants in Germany. The owners of CHP systems obtain bonuses for the electricity generated via
their cogeneration plants. New plants fueled by coal are not promoted under the act. The new CHP Act targets addition of 110 TWh of electricity generation per
year by 2020 and 120 TWh per year by 2025.
• In the previous act, CHP plants obtained funding support for cogeneration with capacity up to 50 kW, and a period of 10 years and larger cogeneration plants with
more than 30,000 full load hours obtained funding. Under the new act, cogeneration plants with capacity of more than 50 kW and with 30,000 full load hours
remain unchanged. However, for plants with capacity less than 50 kW, i.e. mini-CHP, eligibility period has been changed to 60,000 full load hours.
GROWTH IN INDIAN CNG STATION

INFRASTRUCTURE
• In September 2018, in India, the Ministry of Petroleum & Natural Gas (MoPNG) announced to expand the current gas station count from 1,424 to 10,000 in a
decade to reduce the dependency on oil imports. The expansion is in line to remove the barrier in the adoption of CNG vehicles in the country.

3.5 REGIONAL HOTSPOTS 17
Demand for small- to mid-sized gas engines

is expected to be significant in district
heating in Germany, mainly due to the new
CHP Act.
Europe accounts for a major share in the
LNG-fueled marine vessel, and a number of China’s power generation from natural gas has
The United States is creating a such vessels are expected to come in the been witnessing a double-digit growth rate in
significant demand for small- to coming years. recent times.
mid-sized gas engines from Also, more than a million NGVs have been to
CHP plants and NGVs. the added between 2016-2018.

`
Both of these events are resulting in significant
demand for a wide range of gas engines
Demand for gas engines in United Arab

Emirates from the transportation sector is
Argentina is expected to witness a
witnessing significant development, mainly
significant demand for gas engines,
due to the conversion of fossil-fueled
due to the “switch to gas” campaign
vehicles to CNG vehicles.
promoting deployment of NGVs in
the country.

18
4.1 Drivers
4. MARKET DYNAMICS 4.2 Restraints
4.3 Opportunities

4. MARKET DYNAMICS 19
IMPACT CHART
Market Drivers Driver 2

High
1. Low gas prices Driver 3
Driver 1
2. International Maritime Organization (IMO)
Impact
cap on sulfur in shipping fuel
3. Gas engines replacing gas turbines
Low
Market Restraints Short-term Medium-term Long-term
Low
1. Growing renewable sector

2. Growing share of alternative green
Impact
technology in the automobile sector
Restraint 2
Market Opportunities
High Restraint 1
1. Gas-fired aircraft

4.1.1 LOW GAS PRICES 20
Henry Hub Spot Prices in USD per million BTU, 2006-2018

Causes 1. Growing gas supply infrastructure
The gas prices declined during 2008-2012, and
2. Increased localized gas production
have remained low since then.
8.86
1. Growing Gas Supply Infrastructure
As a result of the growing demand for gas and the supportive government policies, the gas
In USD per million BTU
6.98
6.76 pipeline infrastructure, particularly in developing countries, has grown rapidly. This has
helped in ensuring the cheaper gas transportation costs, in turn, helping to keep the gas
prices down.
4.38 4.39
3.94 4
3.7 The gas pipeline PetroChina, the
3 2.94 network in the India biggest gas supplier In the past three
2.75 2.63 2.5
increased from in China, expanded years, out of all new
10,246 km to 17,752 its pipeline network in oil and gas pipeline
km during March the country by more installations, about
2010 to March 2017, than 50%, from 80% were for
an increase of more 32,801 km to 51,315 transportation of gas.
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
than 70%. km during 2011-2017.
Source: EIA

4.1.1 LOW GAS PRICES 21
2. Increased Localized Gas Production

Share of Gas in Primary Energy Consumption (%), Global,
Though the global gas production growth has remained moderate, the regions with 2007-2017
23.4%
fastest-growing gas consumption have registered faster growth in gas production as
23.2%
well. This phenomenon has resulted in increased localized gas production, and in turn,
lower gas transportation costs. Also, as the gas storage is significantly more expensive 22.9%
than oil storage, having local source for gas production can reduce the storage cost 22.7%
22.6% 22.6%
further reducing the cost of gas. 22.5%
In %
22.4%
Share in Global Share in Global
Gas Consumption 22.2%
Region Gas Production in Gas Production in
CAGR (2010-2017)
2010 2017
North America 2.32% 24.48% 25.9%

21.9% 21.9%
South and Central
2.09% 5.17% 4.9%
America
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Europe -0.93% 9.13% 6.6%
Source: BP Stats
Commonwealth Of
-0.35% 23.85% 22.2%
Independent States
Middle East 4.83% 15.19% 17.9% With the declining gas prices, the share of gas in energy consumption is
increasing, as the gas is becoming preferred choice as a fuel, particularly in the
Africa 4.74% 6.5% 6.1%
automobile and power sectors, which in turn, is expected to drive the gas engine
Asia-Pacific 4.17% 15.67% 16.5% market during the forecast period.
Global 2.09% 100% 100%

4.1.2 INTERNATIONAL MARITIME ORGANIZATION (IMO) CAP ON SULFUR IN SHIPPING FUEL 22
• The ship owners can comply with these regulations by one of the following two
International Maritime Organization (IMO) adopted stricter regulations on
approaches:
emissions, most prominently restrictions on sulfur oxide (SOx) emissions, which
are expected to come into force on the first of January 2020.  Using low sulfur content fuel: The LNG, LSMGO, and ULSMGO have low
sulfur content, and hence, using these fuels is expected to help the ship
Sulfur Limit in Fuel (in % m/m)
owners to comply with international regulations.
Emission Control
Global
Areas  Cleaning the exhaust gas: The ship owners can install scrubbers to extract
Current Regulations 1% 3.5% the sulfur from the exhaust gas before it is let out in the atmosphere, in turn,
meeting the regulations
After Jan, 2020 0.1% 0.5%
Popular Marine Fuels and LNG Sulfur Content
% m/m: mass of sulfur / total mass
IFO 380 Less than 3.5%
• Use of scrubbers is highly expensive and ship owners cannot use this
IFO 180 Less than 3.5%
technique in the long run. As a result, many ship owners are moving toward
low sulfur content fuels. LS 380 Less than 1%
LS 180 Less than 1%

• Among the low sulfur content fuels, the main factors determining the use of
new fuels are fuel energy density, storage, and cost. LNG ships utilize liquefied LSMGO Less than 0.1%
natural gas that is stored at temperatures of -162 °C. LNG is a clean fuel, as
ULSMGO Less than 0.0015%
compared to LSMGO, with almost 100% reduction of SOx emissions and 90%
LNG Around 0.0004%
reduction of NOX emissions. Moreover, the overall energy density of the fuel is
IFO: Intermediate Fuel Oil; LS: Low Sulfur, LSMGO: Low Sulfur Marine Gas Oil,
higher than that of LSMGO and ULSMGO.
ULSMGO: Ultra-Low Sulfur Marine Gas Oil
4.1.2 INTERNATIONAL MARITIME ORGANIZATION (IMO) CAP ON SULFUR IN SHIPPING FUEL 23
Historical Price of Ship Fuel in USD/mmBTU, by Type, 2014-2018

25
The natural gas prices are substantially lower than that of marine gas oil (MGO). As MGO prices are likely to increase when the
21.57
demand rises in January 2020, the operational cost of LNG vessel can be as much as 35% lower, as compared to MGO, thus,
20
making LNG as a preferred solution to meet the sulfur emission norms.
15.01 15.28 15.17

In USD/mmBTU
15 14.33
12.48
11.37 11.37
9.51 9.9
10 9.27
8.03 8.47 8.08
6.25
4.97
5 4.43
3.56 3.21
2.99 2.88 2.94
2.36 2.1
0
14-Jun 15-Feb 15-Jun 16-Feb 16-Jun 17-Jan 17-Jul 18-Feb
Henry Hub Natural Gas IFO 380 0,1 MGO BW Source: DNV GL
Hence, due to the environmental and economical advantages of the LNG, the demand for LNG-fired vessels is expected to increase
significantly during the forecast period, in turn, driving the demand for gas-fired marine vessels during the forecast period

4.1.3 GAS ENGINES REPLACING THE GAS TURBINES 24
Advantages of gas engine over gas turbine Recent development in the market
 Has higher power efficiency over a wide range, as compared to gas turbine.
 Market leaders in the gas engine market, particularly Wartsila and GE, have
 A gas engine can start and work at full load in less than 10 minutes, as opposed to
introduced gas engines models with higher ratings.
gas turbines, which can take over 30 minutes to start.
Power generation operators are increasingly moving toward gas engines from gas turbines for power generation units. Some of the operators are replacing the existing gas turbines
with gas engines in their power generation units. Cooperative Energy, the US-based company, ordered two gas-fired 31SG engines from Wartsila to replace its existing gas turbine
units, due to their advantages, such as efficiency of over 50% and flexibility enabling the continuously changing load patterns.
The large district heating Combined Heat and Power System (DH CHP) has traditionally used the gas turbines. With higher power rating gas engines being introduced in the market,
which can meet the requirements for such large DH CHP system, the plant operators in Europe and North America, where electricity prices are volatile and require CHP plants with
higher flexibility, are moving toward gas engines from gas turbines. For example, Germany has announced the construction of two large-scale DH CHP plants (100 MWe and 190
MWe), which are likely to use gas engines by 2018.
Due to the introduction of higher capacity gas engines, the gas turbine market for power generation in the large commercial building sector is facing increased competition from gas
engine manufacturers.
As the gas engines are replacing gas turbines, particularly for the power utility, DH CHP plant, and large commercial building
sectors, the demand for gas engines is expected to increase substantially during the forecast period, in turn driving the market
studied.

4.2.1 GROWING RENEWABLE SECTOR 25
Overview of Support Schemes for Renewable Energy in Selective Countries

• With growing concerns related to air pollution caused by
fossil fuel-fired power generation plants, many countries Schemes
have put in policies and subsidies aimed at encouraging
investment in the renewable energy sector. Some of the Direct Capital
major government programs and regulations in this regard Subsidy
include:
Green Electricity
 All countries under European Union not only provide
Schemes
subsidies for renewable power generation, but also have
made it mandatory for electricity grid operators to buy
Renewable Portfolio
the electricity from renewable power plants. Standard (RPS)
 In recent years, regulatory mandates and government

Financing Scheme
support in the form of Feed-in-Tariffs (FiTs) have
enabled renewable power, particularly solar and wind
Tax Credits
power, to grow rapidly.
 Carve-outs in state-level Renewable Portfolio Standards Net Metering/Net

(RPSs) in countries, such as the United States, have Billing Incentives
driven new installations. Many countries, across the

Sustainable Building
world have now mandated solar energy targets as well.
Requirements

4.2.1 GROWING RENEWABLE SECTOR 26
Cumulative Renewable Power Installed Capacity in GW, Global, 2010-2017

Levelized Cost of Energy in USD, by
2,179
Technology, 2009-2017 2,012
1,849
1,692
1,444 1,565
400 1,329
1,226
In GW
350
300
In USD
250
200
2010 2011 2012 2013 2014 2015 2016 2017
150
Source: IRENA
100
50 Favorable government policies, combined with the sharp decline in power generation costs, have led
0 power operators moving from conventional power generation to renewable power generation. During
2009 2010 2011 2012 2013 2014 2015 2016 2017
2010-2017, the renewable power generation capacity increased by more than 75%.
The growth of the renewable sector is expected to continue during the forecast period, as the
Utility Scale Solar Wind Enerty Gas-combined Cycle
majority of the countries around the world have set the target for a significant increase in the share
Source: Lazard
of renewable power in their energy mix.
The renewable power generation costs have been

consistently declining, owing to innovations in manufacturing The growing share of renewables is expected to restrain the growth of the
and installation of PV power generation, improvement in wind conventional power generation sector, including gas-fired power generation,
turbine materials and designs, and economies of scale. As of
which in turn, is expected to restrain the gas engine market during the forecast
2017, the LCOE of wind energy and utility scale solar was
lower than that of gas-combined cycle power generation. period.

4.2.2 GROWING SHARE OF ALTERNATIVE GREEN TECHNOLOGY IN THE AUTOMOBILE SECTOR 27
Electric Vehicle Registered in thousand units, by Selected Countries, Global, 2013-2017
Electric vehicles (EVs) have a smaller negative impact on the environment, as compared to natural gas
1,400
vehicles (NCVs), and hence, many countries that were previously focused on increasing the use of
1,200
In thousand Units
1,000 NCVs are now encouraging the use of EVs instead by introducing subsidies and improving
800 infrastructure required, which, in turn, has driven the sales of EVs in these countries.
600
400
200
0
China United States Norway United France Netherlands Germany Japan Sweden Canada Switzerland Spain Rest of the
Kingdom World
2013 2014 2015 2016 2017 Source: Mordor Intelligence
Lithium-ion Battery Prices History and Forecast in USD per kWh, Global, 2010-2023
Natural gas vehicles’ major advantage over EVs is the lower initial investment requirement for the
1,000 buyers. The main manufacturing cost for EVs is the battery price. The lithium-ion battery price
In USD per kWh
800 declined by almost 80% during 2010-2017, and is expected to further drop during the forecast
642
599 period, which in turn, is expected to reduce the prices of EVs during the forecast period.
540
350
273
209 195 183 175 162 151 140
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: Mordor Intelligence

The investments in the

EV sector are expected
Toyota has announced that it Volvo announced that its every to help drive the EV
General Motors
may provide an electric vehicle model is likely to be sales during the
announced the plans to
option for its entire line up by either electric or hybrid after forecast period.
introduce 19 new EV
2025 2019
models.
Electric Vehicle Production Volume Forecast in thousand units, Global, March 2017- March 2026
4000
3500
In thousand Units
3000
2500
2000
1500
1000
500
0
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
Source: Panasonic Corporation

In 2015, there were about 115 hydrogen fueling stations across In Europe, the Hydrogen Mobility Project was announced in 2015, which is projected
the world, which increased to 285 in 2016 and 327 in 2017. to extend until 2021. The first project involved investments worth EUR 68 million, for
139 stations were in Europe, 118 in Asia-Pacific, 68 in North 300 fuel cell vehicles (FCEVs) and 29 hydrogen refueling stations (HRS), mostly in
America, and one in Australia. Germany. In 2016, additional investments worth EUR 100 million were announced,
for the deployment and operation of 1,230 FCEVs and the addition of 20 extra
HRSs. Two types of fuel-cell electric vehicles are expected to be deployed, i.e., fuel-
The Japanese Government and the auto industry aim to
cell electric cars from Daimler and Hyundai, and fuel-cell range-extended vans from
introduce 160 stations and 40,000 fuel-cell vehicles by March
Symbio Fcell, in collaboration with Renault.
2020.
Though hydrogen fuel-cell vehicle market is in initial stages, it is expected to grow rapidly during the forecast period, owing to the growing investments in the
manufacturing and infrastructure sectors related to FCEVs, further increasing the competition for the natural gas vehicle market during the forecast period.
The rising share of EVs and FCEVs is expected to come at the expense of mainly natural gas-fired vehicles (NCVs), as the use
of all three types of vehicles is promoted due to their lower greenhouse gas emissions, making them close substitutes of each
other. Therefore, the growing sales of EVs and FCEVs are expected to restrain the natural gas-fired vehicles sales, and in turn,
the gas engine market during the forecast period.

4.3.1 GAS-FIRED AIRCRAFT 30
The aviation industry is searching for alternative, eco-friendly fuels, as many of the small aircrafts are still running on low-lead fuel, which has been phased out
of the road transportation industry in a majority of the countries around the world, due to high carbon footprint. Some of such alternative technologies are:
ELECTRIC AIRCRAFT HYDROGEN FUEL CELL-DRIVEN AIRCRAFT
Despite substantial investments in this sector, the aviation industry has not A first small aircraft of this type was only launched in April 2018 by Airbus,
been able to produce passenger electric aircrafts, mainly due to high weight of and the development of these types of commercial aircrafts is expected to
batteries, which is required to be carried by electric aircrafts. take time.
GAS-FIRED AIRCRAFT
First CNG-driven small aircraft was launched by an US-based firm, Aviat

In 2017, a team of engineers in Massachusetts Institute of Technology
Aircraft. The advantages of the CNG over the conventional fuel are:
launched a gas-fired drone, Jungle Hawk Owl, which can stay in the air for
 Up to 90% reduction in greenhouse gas emission.
up to five days on a single tank of gas. The team was working on building
 CNG has the higher energy to weight ratio, and hence CNG is lighter
the drones that can run on eco-friendly fuel and can stay in the air for a
than that of conventional fuels.
longer period. The success of the gas-fired drone can give rise to
 The cost of CNG is significantly lower than that of conventional aviation
increasing manufacturing of these type of drones in the near future, due to
fuels.
the main advantage of running for a longer period of time than other types
Due to these advantages, the CNG-driven aircrafts not only have a lower
of drones, such as solar-driven or battery-operated drones, while
carbon footprint, but also are more economical, which in turn, may result in
maintaining the minimum carbon footprint.
increased production of these type of aircrafts.
As gas-fired aircraft require high-quality, reliable gas engines, the use of gas-fired engines in the aviation industry provides
significant potential for the gas engine market in the future.
31
5. SUPPLY CHAIN ANALYSIS

5. SUPPLY CHAIN ANALYSIS 32
Manufacturers, AFTER SALES

CORE SUPPLY Raw Material Suppliers Distributors and E- End-users SERVICES PROVIDERS
CHAIN
commerce
BOTH MANUFACTURERS
1. ALUMINIUM ALLOY
1. UTILITIES
AND DISTRIBUTORS
2. STEEL
2. MANUFACTURING
3. CAST IRON PROVIDE MAINTENANCE
3. OIL AND GAS
ELEMENTS OF
4. TRANSPORTATION AND REPAIR SERVICES
SUPPLY CHAIN
AND COMPANIES
INVOLVED
RESEARCH AND DEVELOPMENT

ESSENTIAL
PARTNERS
REGIONAL AND LOCAL DISTRIBUTORS

33
6.1 Bargaining Power of Suppliers
6.2 Bargaining Power of Consumers
6. PORTER’S FIVE FORCES 6.3 Threat of New Entrants
6.4 Threat of Substitute Products and Services
6.5 Intensity of Competitive Rivalry

6. PORTER’S FIVE FORCES ANALYSIS 34
Description
THREAT OF NEW ENTRANTS
BARGAINING
• The bargaining power of suppliers is expected
POWER OF
SUPPLIERS to be LOW, in the market studied.
• The bargaining power of consumers is
expected to be MODERATE, in the market
COMPETITIVE studied.
RIVALRY • The threat of new entrants is expected to be
Text OF
THREAT
LOW, during the forecast period.
SUBSTITUTES
• The threat of substitute products and services
is likely to be MODERATE, over the forecast
BARGANING POWER OF
period.
CONSUMERS
• The degree of competition is anticipated to be
MODERATE, over the forecast period.

6.1 BARGAINING POWER OF SUPPLIERS 35
• In recent years, the cost of raw materials, such as steel and iron has
increased, thus leading to the reduction of revenues for the raw material
suppliers. Hence, in order to stabilize the profit margins, suppliers are
Supplier switching costs
relative to firm switching gradually increasing pressure on the manufacturers to increase the prices, as
costs
10 the substitute inputs for raw materials associated with gas engine
Supplier competition: the
ability to forward 8 Degree of differentiation manufacturing are limited. This is going to enhance the bargaining power of
vertically integrate and of inputs
cut out the buyer 6 suppliers.
4
• However, due to the presence of large pool of suppliers in the market, the
2
supplier concentration to gas engine manufacturer concentration is high,
Employee solidarity (e.g. Impact of inputs on cost
0
labor unions) or differentiation which limits the bargaining power of suppliers. Also, the switching cost of the
manufacturer is assessed to be low compared to the switching cost of the
supplier.
Supplier concentration to Presence of substitute
firm concentration ratio inputs • The suppliers have to maintain a secure distribution network and adhere to
delivery schedules in order to avoid loosing their supply contracts to other
Strength of distribution
channel
companies, as the switching cost of OEMs is considered relatively low.
• Therefore, the bargaining power of suppliers is assessed to be LOW.

6.2 BARGAINING POWER OF CONSUMERS 36
• Globally, the manufacturers of gas engines are very less compared to the
number of buyers, which results in a higher buyers concentration to firm
Buyer concentration to firm
concentration ratio concentration ratio. This leads to shifting of market equilibrium away from
10
Differential advantage 8 Degree of dependency buyers, thus, resulting in decreased bargaining power of consumers.
(uniqueness) of industry upon existing channels of
products distribution
6 • The cost of several of the gas engines is, on an average, considered high. The
4
local buyers in the market are highly sensitive to the gas engine prices, and
2
Bargaining leverage, due to high price sensitivity, the buyers can force down the prices.
Buyer price sensitivity 0 particularly in industries with
high fixed costs
• Moreover, there are substitute products available for gas engines across the
world, which include gas turbines, diesel engines, and renewable energy
sources. The renewable energy sources have the advantage of zero emissions,
Availability of existing Buyer information
substitute products availability which is leading to growth in its adoption. This presents opportunity for buyers
to contemplate replacement of gas engines with available options.
Force down prices
• As a result, the bargaining power of consumers is projected to be MODERATE.

6.3 THREAT OF NEW ENTRANTS 37
• The new entrants of gas engine market need to set up their own distribution
network. The gas turbine market is capital-intensive, as new entrants will have
to make investments in building manufacturing facilities and setting up of
Government policy distribution channels, as well as after-sales service infrastructure, in order to

10
compete with current market players.
Industry profitability 8
Capital requirements
(Market CAGR)
6 • The established players are continually undertaking research and development
4 activities to offer highly efficient products with lower emissions. This, in turn, is
2 expected to result in further pushing up of the capital requirements, resulting in
Access to distribution 0 Economies of scale a reduced threat of new entrants. It also offers an opportunity for business
expansion for well-established players of the other region, to directly enter the
market, offering an innovative product. Thus, the presence of global brands in
Switching costs or sunk Economies of product the market leaves less opportunities for new entrants, as it would be difficult for
costs differences
them to replace the well-established players in the market.
Product differentiation
• The customers of gas engines are highly sensitive to pricing and hence, the
industrial profitability is low for the market. Under such a market scenario the
entry barriers are high.
• Therefore, the threat of new entrants for the market is projected to be LOW.

6.4 THREAT OF SUBSTITUTE PRODUCTS AND SERVICES 38
Buyer propensity to • The direct substitutes to the gas engines are gas turbines, diesel engines, bio-
substitute
10 diesel-based engines, gasoline engines, and renewable energy sources. The
8 propensity of buyers to substitute gas engines with much cleaner power
Availability of close 6 Relative price sources is increasing due to growing popularity of renewable power and battery
performance of
substitute
4 substitute storage systems.
2 • In addition to the high capital requirement, highly developed diesel

0 infrastructure poses a threat to the growth of gas engines market.
• The gas engines have major advantage over its substitute, such as diesel
Ease of substitution
Perceived level of engines, i.e., they can provide electricity in parallel with electricity grid emitting
product differentiation
lesser GHG.
• Therefore, the threat of substitute products and services is expected to be

Number of substitute MODERATE for the market.
products available in
the market

6.5 INTENSITY OF COMPETITIVE RIVALRY 39
Sustainable competitive
advantage through
innovation
• The manufacturers of gas engines focus on product development and
10
inculcate latest features to gain advantage over each others. The key
8
players are in the race of developing innovative and reliable products that
6
Degree of transparency Consumer switching costs help them to expand their market reach, as well as contribute to the growth
4
in revenues. In April 2018, Siemens presented its new high-efficiency, low-
2
emission gas engines that can be powered by natural gas, biogas, gas from
0
landfills or sewage treatment plants, and a wide selection of other gases to
supply a variety of sectors.
Firm concentration ratio

Level of advertising • The key players employ powerful competitive strategies by improving
expense
product efficiency, providing extensive distribution networks, and aftersales
services infrastructure. The firm concentration to buyer concentration ratio
Powerful competitive in the market is low, which enhances the intensity of competitive rivalry.
strategy
• Therefore, the intensity of competitive rivalry is projected to be
MODERATE.

40
7.1 By End-user Industry
7.1.1 Utilities
7.1.2 Manufacturing
7.1.3 Oil and Gas
7. MARKET SEGMENTATION AND ANALYSIS 7.1.4 Transportation
7.1.5 Other Industries
7.2 By Fuel Type
7.2.1 Natural Gas
7.2.2 Special Gas

7.1 SEGMENTATION - BY END-USER INDUSTRY 41
Gas Engine Market: Revenue in USD billion, by End-user Industry, Global, 2017-2023
1.97
1.69
1.58
1.5
1.42
in USD billion
1.37
1.31
1.24
0.86
0.7
0.64 0.67 0.59
0.47
0.41 0.43 0.46
0.35 0.37 0.39
Utilities Manufacturing Oil and Gas Transportation Other Industries
End-user Industry

2017 (a) 2018 (e ) 2019 (f) 2023 (f)

7.1.1 UTILITIES 42
• Electric utilities operate gas engine generators continuously to serve base Gas Engine Market: Size and Demand Forecast in USD
electrical loads. The use of gas engines across the utility sector is considered billion, Utilities, Global, 2017-2023
particularly advantageous in the absence of a reliable supply from the

1.97
1.86
centralized power plant, or where the economics and availability of natural gas 1.67 1.76
1.5 1.58
1.42
In USD billion
fuel are considered as the critical drivers.
• In addition, the use of gas engine generators is also considered highly useful
for handling peak load demand. Several utilities across the world witnessed a
rapid spike in the peak load demand, particularly during the morning and
evening time period. 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
• Although several utilities choose to enter into long-term power purchase
agreements to own a reserve block of power, this often results in the availability • Owing to rising population, increasing urbanization and industrialization activities,
of unnecessary baseload capacity, driving up costs for the utility and its infrastructure development, and high economic growth in countries, such as
customers. India, and China, are expected to result in significant growth in demand for
electricity. According to the World Energy Council (WEC), the global demand for
• Owing to the several advantages offered, such as higher hour applications,
electricity is expected to double by 2060 from the present level.
reduced energy costs, efficient utilization of resources, particularly across
• As construction of new power plants and transmission lines impose huge costs
natural gas-based electricity generation plants where natural gas supply
and often faces formidable social and political barriers, utilities are favoring cost-
remains abundant to be used for gas engines, and being environment-friendly
effective ways to keep up with rising demand for power. With increasing quest for
in nature as compared to other alternatives, the use of gas engine as a peak
integrating natural gas into electricity generation mix and with improving natural
load power plant solutions, offers increased revenue opportunities for the utility
gas associated infrastructure, gas engines-based distributed power generation is
company and could also help to avoid power outages.
fast emerging as an economic solution for the utility companies.
7.1.1 UTILITIES 43
• Furthermore, lower gas prices across several countries, such as the United Electricity Demand Forecast in TWh, Global, 2015-2035
States are expected to further supplement the demand for gas engines. In 34,135
30,906
addition, with air quality emission standards getting more stringent and with 27,542
24,245
increasing cost of diesel fuel, gas engine-based power units have become a 21,066
In TWh
preferred electricity generating source, across countries.
• With the closure of many large baseload fossil- or nuclear-fuelled power

stations, coupled with rising integration of renewables to the grid, which has
associated intermittency problems, several technologies, including highly-
2015 2020 2025 2030 2035
efficient gas engines have been fast emerging as a viable choice for utility
companies to ensure reliable power supply. Source: UNEP
• In January 2018, Wartsila was awarded first of its kind contract for the delivery
Total Renewable Energy Installation in gigawatts (GW),
of a 22.7 MW Smart Power Generation plant in Mississippi, United States. The
Global, 2010-2017
plant consists of two gas-fired Wartsila 31SG engine solution, which allow for
2179.1
the flexibility of renewable integration in the country. 2012.43
1,849
1,692
1564.61
• Gas turbines have conventionally been the technology of choice for larger-sized 1329.35
1443.83
In GW
1225.71
gas-based power plants and for heat and power projects. However, continuous
research and development activity has resulted in technological advancements
of gas engines, and in turn, has resulted in an increased uptake of gas engines
in large power plant projects. Factors, such as high-cost-efficiency and
2010 2011 2012 2013 2014 2015 2016 2017
increasing flexibility are expected to result in an increased uptake of gas
Source: IRENA
engines in larger power plants, over the long run.
7.1.2 MANUFACTURING 44
• Manufacturing industry is considered as a vital parameter or the backbone of the Gas Engine Market: Size and Demand Forecast in USD
economy of any developing or developed nation, as it reduces the heavy billion, Manufacturing, Global, 2017-2023
dependence of people on agricultural income and provides them jobs in 0.86
0.82
0.78
secondary and tertiary sectors. 0.74
0.67 0.7
0.64
In USD billion
• Although traditionally diesel engines have remained in wide use across the
manufacturing sector as a power back up source, factors, such as environmental
concerns, rising fuel cost of diesel, improving availability of natural gas and its
lower cost, have resulted in an increasing trend of favoring gas-fired engines as a
power back up source in the manufacturing sector. 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
• The use of the gas engine as a backup power solution or its use as an industrial
scale combined heat and power (CHP) solution has been gaining wide popularity Cumulative Installed Capacity Forecast of CHP in MWe, by
across manufacturing of fertilizers, iron and steel, cement, and other similar Prime Mover Type, Europe, 2015-2020
application. 200000
• Beyond its economic and environmental benefits, gas engines-based combined 150000
In MWe
heat and power (CHP) can help organizations live up to their sustainability, 100000
carbon-reduction, and energy-conservation goals. It can also help manufacturing
50000
facilities qualify for green-building certification under rating programs, such as
China’s Three Star, Australia’s Green Star, Europe’s BREEAM, and the U.S. 0
2015 2016 2017 2018 2019 2020
Green Building Council’s Leadership in Energy and Environmental Design Steam Turbine Gas Turbine Combined Cycle Gas Turbine Gas Engine (ICE)
(LEED) program, and has been witnessing continuous growth in the past few Source: Delta-ee Distributed Power Services
years.
7.1.2 MANUFACTURING 45
• In a bid to meet stringent air emission norms in a cost-effective manner, gas Value of Manufacturing Sector Output in USD billion, India,
engine based backup power generation through CHP installation has been 2010-2016
widely gaining popularity across manufacturing sectors of Europe and North 1,164
1,061 1,050 1,060 1079 1080
America. 966
In USD billion
• In April 2018, General Electric announced that it has signed a contract with
GreenTech Energy Company (GTE) for the supply of 21 Jenbacher gas
engines (10 J320 units, 10 J420 units and one J316 unit) - with a total capacity
of 26 megawatts (MW) to be delivered by year-end 2018 for use in a CHP plant
for supplying electricity to industries across the St. Petersburg region in Russia.
2010 2011 2012 2013 2014 2015 2016
Source: UNIDO
• Further, in May 2018, Rolls-Royce won a contract to supply a 7 MWe combined
heat and power plant for a new tomato greenhouse plant in Belgium. Similar • However, the electric sector in both Asia-Pacific and Middle East sector is not
gas engine based CHP power solution contracts have witnessed a significant robust and remains subject to constant power outages, in turn, affecting the
surge in Europe & North America regions over the past few years, resulting in production from manufacturing facilities.
an increased demand for gas engines across the manufacturing sector. • Furthermore, concerns pertaining to the emission from these facilities is
• Furthermore, over the past three decades, the share of developing countries of expected to result in the operating companies following a similar trend as
the Asia-Pacific region in world manufacturing output has increased Europe and North America of using gas engine-based power backup solution,
significantly. Initially led by China, several other countries such as India and which, in turn, is expected to supplement the demand for gas engines in the
other southeast Asian countries have been leading the global manufacturing coming years. Improving infrastructure of the natural gas-based pipeline is also
sector. Similar trends are also being witnessed in the Middle East, as well. expected to supplement the case for greater uptake of the gas engine-based
power back solution across the manufacturing sector.

7.1.3 OIL AND GAS 46
• From gas field production through to cogeneration plants, stationary gas Gas Engine Market: Size and Demand Forecast in USD
engines are the preferred choice for a distributed and clean energy supply. billion, Oil and Gas, Global, 2017-2023
0.45 0.47
They are extensively being used to provide mechanical or electric power to the 0.41 0.43
0.37 0.39
most isolated places. Gas engines mostly find their applications in natural gas 0.35
In USD billion
transmission and processing plants, offshore and onshore drilling rigs and
producing platforms, petrochemical, and chemical plants.
• As majority of the oilfield production sites are far from the grids, operators look
for a reliable and clean sources for power generation. Gas engines meet the
requirements of the operators in oil and gas industry, as they are designed to 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
operate at peak production and deliver responsive performance with almost
every kind of gaseous fuels, such as natural gas, flare gas, coal gas, biogas,
Length of Natural Gas Pipelines, in kms, India , 2010-2017
and others.
17129.1 17228.7 17680.4 17752.7
• In 2017, the length of the natural gas pipelines in India reached 17752.7 km, 15518.8
representing an increase of 73.2% compared to the pipeline length in 2010. 12028.6

10,246 10772
In kms
Moreover, in the countries, like Mexico, imports of natural gas from the United
States is playing a vital role in filling the gap between production and
consumption. The volume of the gas exports from the United States to Mexico
are expected to rise as more pipelines and power plants come online by 2019.
New natural gas pipeline projects, such as the Nueva Era pipeline and the 2010 2011 2012 2013 2014 2015 2016 2017
Nueva Era pipeline are expected to increase the demand for gas engines over Source: Government of India
the forecast period.
7.1.3 OIL AND GAS 47
• All the natural gas facilities in the United States are planning to extend, upgrade, and modernize their natural gas infrastructure so as to meet the increasing demand
from industries and other end users. A projected 167,000 to 209,000 miles of natural gas pipelines would need to be constructed by 2035 to increase the system’s
carrying capacity.
• China’s natural gas consumption has increased from 109 bcm/y in 2010 to 240.4 bcm/y in 2017. The country is pursuing several options to bridge the gap between
supply and demand of natural gas. The viability of China’s natural gas plans depend heavily on the construction of additional storage and infrastructure. According to
the International Energy Agency (IEA), China is expected to become the world’s largest natural gas importer by 2019.
• Russian gas giant Gazprom is about to complete the natural gas pipeline project that spans from Russia to China with a total length of 2,010 km. The natural gas
pipeline is expected to start sending gas to China by the end of 2019. Increasing demand for power generation through natural gas engines and natural gas
transmission, along with the development of natural gas infrastructure in the countries, such as China, India, and Mexico, is expected to drive the gas engines
market in the oil and gas industry, over the forecast period.
LNG Import Capacity Under Development in China
Project Operator Capacity (MMtpy) Status Planned Startup
1. Wenzhou LNG 3 Planning 2020
2. Yancheng LNG 3 Planning 2020
3. Yuexi LNG -- Planning --

4. Penglai LNG 2.6 Planning 2020
5. Shenzen Diefu LNG 4 Under Construction 2018
6. Zhangzhou LNG 3 Under Construction 2022
7. Zhoushan LNG 3 Under Construction 2018

7.1.4 TRANSPORTATION 48
• As of Nov 2017, transport sector remains as one of the biggest energy Gas Engine Market: Size and Demand Forecast in USD
consumers, resulting in over 26.6% of total energy consumption globally and billion, Transportation, Global, 2017-2023
33% in Europe and as a result, the sector has emerged as one of the biggest 1.69
1.52 1.6
1.45
air polluters with a continuing growth projected by the European Commission. 1.31 1.37
1.24
In USD billion
• Fast pace economic growth, coupled with rising per capita income, reduction in
the vehicle production costs by economies of scale, and urbanization activities
in the developing nations, such as India have led to phenomenal growth in the
sale of transportation demand worldwide, over the past ten years.
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
• However, with the emission legislation getting more and more stringent across Source: Mordor Intelligence Analysis
the globe, natural gas engines-based vehicles (NGVs) are fast gaining interest
as a viable transportation fuel source, with an anticipated 26 million NGVs
Vehicle Sales in million units, Global, 2008-2017
already on the run. Burning natural gas to release a given amount of energy is
anticipated to release roughly 25% less CO2 than burning diesel to release the 93.91 96.80
85.59 88.33 89.71
82.12
same amount of energy and has emerged as a potential solution to meet 74.96 78.16
In million units
68.31 65.56
emission regulations.
• In addition, improving natural gas infrastructure, growth in natural gas

production, improved performance of natural gas, and growth in natural gas
fueling stations are expected to further increase the demand for NGVs in the
Vehicles Sales
coming years, across the world. Several countries, such as Argentina, have 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: OECD
launched supportive policies and increased investments to fast-track the
deployment of NGVs in the country.
7.1.4 TRANSPORTATION 49
Number of Natural Gas Vehicles (NGV), Global, 2000-2018
• Furthermore, a significant part of the emissions from the transport sector comes
from marine transport. Marine transport is considered vital to the global economy,
26163564
as over 90% of the world’s total trade is being carried through ships and it is, by far, 23,954,084
considered as one of the cheapest ways to transport massive amount of goods and
16,723,526
raw materials around the world.
9,620,010
• To counter the growing global concerns for harmful emission of pollutants from
3,934,025
marine transportation, the International Maritime Organization (IMO) mandated 1,292,668
sulphur content in the marine fuel to no more than 0.5% versus the current limit of
Natural Gas Vehicles
3.5% in 2016. As the regulations are set to be strictly implemented by Jan 2020, 2000 2004 2008 2012 2016 2018
Source: IANGV Global
gas engines have rapidly emerged as a potential solution to meet emission
regulations.
Operating Areas of LNG Fuelled Vessels, Revenue Share (%),
• To meet its climate objectives of lower emissions, the European Union needs to
by Region, Global, As of November 2017
almost entirely decarbonize its transport sector by 2050, and several countries in
the region, such as Norway, have been actively promoting natural gas fuelled 2%
12% Norway
vessels. 5%
Europe
• The focus on climate issues remains high in Norway with the Norwegian
America
government setting ambitious and stern emission norms to promote LNG fuelled 11%
51% Asia
ships. The country has also established the Norwegian NOx fund, which provides Oceania
financial support for the adaptation of gas-fuelled vessels. Similar stern emission 19% Rest of the World
regulations and supportive policies are expected to further supplement the adaption Source: Mordor Analysis
of gas engines in the marine sector, during the forecast period.
7.1.5 OTHER INDUSTRIES 50
Gas Engine Market: Size and Demand Forecast in USD

• The residential sector is expected to account for approximately 15% of the total energy
billion, Other Industries, Global, 2017-2023
use, both electrical and thermal. The major share of power supplied to most of the
residential buildings is supplied from large-scale power generation plants, which are 0.59
0.56
0.52
connected to the nationwide electricity grid. 0.49
0.46
0.41 0.43
In USD billion
• However, the increasing demand for the less polluting forms of energy has resulted to a
renewed interest in the use of gas engine-based micro-combined heat and power (CHP)
technologies and heat pumps in the residential sector. Owing to their ability to recover a
major share of engine heat, gas engine-driven heat pumps (GHP) have slowly-but-
steadily emerged as a potential heating, ventilation, and air conditioning (HVAC) 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
solution across the residential sector, particularly in the residential sector.
• Although the traditional power back up solution have been dominated by the diesel
• The energy needs of the commercial applications, such as data center (DC),
engine generators across the residential and commercial application, the conditions look
shopping complexes, and recreational centres, among others, continues to grow at a
favorable for gas engines, in the coming years. Owing to several advantages offered,
brisk pace. Although these institutions have long relied on diesel standby units to
such as increasing quest for natural gas usage, growing production and associated
ensure sufficient self-generation capacity, the high-cost of running those units and
supply infrastructure, and being environment-friendly in nature has resulted in several
environmental risks have resulted in an increasing trend of favoring gas-fired
developed countries favoring gas engine generators for backup power generation.
generators, particularly in places, where gas pipeline infrastructure and gas supply is
• Although, at present, the current uptake of gas engines is limited across several adequate, which is expected to supplement the demand for gas engines in the
developed countries only due to factors, such as improving infrastructure, lower fuel cost coming years.
is expected to result in increased demand in other regions as well.
• Several companies, such as Wartsila and Caterpillar, have come up with smart grid
power generation solution based on gas engines, particularly targeting data centres in
the developed countries.

51
7.2.1 Natural Gas

7.2 BY FUEL TYPE
7.2.2 Other Gases

7.2 BY FUEL TYPE 52
Gas Engine Market: Size and Demand Forecast in USD billion, by Fuel Type, Global, 2017-2023
5.15
4.39
3.96
3.76
Revenue (In USD billion)
0.36 0.43
0.31 0.32
Natural Gas Other Gases
Fuel Type
2017 (a) 2018 (e) 2020 (f) 2023 (f)

7.2.1 NATURAL GAS 53
• A natural gas-based engine is an internal combustion engine (ICE) which MARKET DRIVERS MARKET RESTRAINTS
utilizes natural gas as a fuel. Due to its availability in abundance, easy

1. Investment in gas-fired power rose 1. Despite the positive trend in
transportation through pipelines, and clean burning nature, natural gas-based by nearly 40% in 2017, led by the generation, final investment
engines have gained momentum in recent years. United States and the Middle decisions for new gas-fired power
East/North Africa region. plants capacity, fell to 50 GW in
• These engines have found place in a variety of application, ranging from
2017.
2. Improvement in natural gas
distributed power generation to run a vehicle.
infrastructure in the developing 2. Gas-fired power generation growth
• For centralized power generation, the prime movers of choice are large gas nations, such as China and India. slowed down to 1.6% in 2017,
turbines, as they offer very low maintenance. These turbines tend to be larger Gas production increased strongly mainly driven by a decline of 7.6%
than 20 MW in size and are typically 30% efficient. in China (17.2%), India (13.3%), in the United States, which saw an
and Southeast Asia (6.3%) in 2017. increase in gas prices.
• However, for most of the distributed power generation applications, the prime
3. Several advantages of natural gas 3. Natural gas-based power
mover requirements are smaller than 20 MW. The choices for the same are
engines over petrol (gasoline) and generation is facing fierce
mainly reciprocating engines (gas or diesel), fuel cells, and micro-turbines. diesel engines, including cheaper competition from cost-competitive
fuel cost, higher efficiency, and renewables.
• Natural gas-based engines offer low capital costs and further have higher
environment friendliness.
power range efficiencies for a wider range. when compared to gas turbines.
Typically, gas engines are 34-42% efficient, which is higher than most other
• Furthermore, engine manufacturers have made great advances to reduce
forms of energy conversion. In addition, engines retain their high efficiency,
engine emissions over the last decade, reducing most engine emissions, by
better than other options, when partial loads are needed. Energy efficiencies,
approximately 95%. On a comparable energy output basis, emissions from
greater than 85% can be achieved, when used in combined heat and power
gaseous-fueled engines are generally much lower than average central grid
applications (CHP), where thermal energy from the combustion process is used
emissions, generated from other power sources.
as steam power or to heat/cool buildings.
• Vehicular application is considered to be the most promising area for natural Gas Engine Market: Size and Demand Forecast in USD billion,
gas-based ICE. Natural gas vehicles (NGVs) viz. LNG-based or CNG-based, Natural Gas, Global, 2017-2023
are good choices for high-mileage, centrally fueled fleets. Dedicated, bi-fuel,
and dual-fuel are three types of natural gas engines available in the market for 5.15
4.88
light, medium, as well as, heavy duty vehicles. 4.63
4.39
In USD billion
4.17
3.96
• In July 2018, there were 26,163,564 NGVs and 31,046 natural gas fueling 3.76
stations in the world.
• The advantages of natural gas as a transportation fuel include its domestic

availability, widespread distribution infrastructure, and reduced greenhouse gas
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
emissions, when compared to conventional gasoline and diesel fuels. SOURCE: Mordor Intelligence Analysis
NGV Fleet of Some Major Countries in the World Total Number of Natural Gas Vehicles, Global, 2011-2018
25.3 26.16
Country NGV Population As of Month and Year 24
22.6
21.3
China 6,080,000 Jan 2018 17.7

16.7
15.1
In million
Iran 4,502,000 Oct 2017
India 3,090,139 Mar 2018
Italy 1,004,982 Mar 2018
Colombia 571,668 Mar 2018 2011 2012 2013 2014 2015 2016 2017 2018
(July)
SOURCE: NGV Global's Natural Gas Vehicle Statistics, 2018 SOURCE: NGV Global's Natural Gas Vehicle Statistics, 2018

Natural Gas Prices Around the World, 2012 - 2017
18
16
14
12
10
0
2012 2013 2014 2015 2016 2017
Average German Import Price UK (Heren NBP Index) Netherlands TTF (DA Heren Index) US Henry Hub Canada (Alberta) Japan CIF Japan Korea Marker
SOURCE: BP Statistical Review of World Energy 2018

7.2.2 OTHER GASES 56
• Other gas-based engines include coal gas engines and bio gas engines. Gas Engine Market: Size and Demand Forecast in USD billion,
Other Gases, Global, 2017-2023
• Coal Gas Engines: Coal gas contains a variety of calorific gases, including
0.43
hydrogen, methane, and volatile hydrocarbons, together with small quantities of 0.41
non-calorific gases, such as carbon dioxide and nitrogen. 0.39
0.36
In USD billion
• Coal Seam Gas (CSG) is another type of coal gas, collected from un-mined 0.34
0.32
coal beds. CSG consists of over 90% methane, and can be harvested 0.31
independently of coal mining in some locations. The gas composition is

normally stable, meaning that the gas can be fed directly into the natural gas
network or a gas engine. 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
SOURCE: Mordor Intelligence Analysis
• Before the development of natural gas supply and transmission—during the
1940s and 1950s in the United States, and during the late 1960s and 1970s in • Biogas can be produced from a large variety of feedstock, which can generally
the United Kingdom - virtually all gas for fuel and lighting was produced from be categorized as animal by-products, vegetable by-products, industrial waste,
coal. Currently, the coal gas-based engines are not widely used due to organic household waste, and energy crops.
environmentally friendly and cheaper natural gas availability.
• Biogas is generally made use of in reciprocating gas engines. Biogas engines
• Biogas Engines: Created by anaerobic fermentation, biogas serves as a high- are used to generate power, both from the biogas that is produced in specially
energy, renewable fuel that can be used as a substitute for fossil fuels. Biogas built anaerobic digestion plants and from landfill gas (LFG), as the gas from
engines not only improve waste management, but also generate efficient both are very similar. Biogas-based engines are also increasingly being used
energy. for combined heat and power plants.

7.2.2 OTHER GASES 57
• Furthermore, biogas as vehicle fuel is capable of reducing greenhouse gas • Furthermore, around the world, waste generation rates are rising. In 2016, the
emissions in the transport sector between 60% and 80%, when compared to countries across the world generated 2.01 billion metric ton of solid waste,
fossil-based fuels, like gasoline and diesel. Germany, Sweden, Switzerland, the amounting to a footprint of 0.74 kilograms per person per day. With rapid
United Kingdom and the United States were the largest producers of biogas as population growth and urbanization, annual waste generation is expected to
vehicle fuel, in 2016. Some of the notable companies in the biogas engine increase by 70%, in 2016 levels to 3.40 billion metric tone in 2050. This has led
business include GE and Cummins, among others. governments across the world to manage waste in an efficient manner.
• Production of biogas as a waste management technique is considered to be

• Countries have promoted biogas-driven cars, trucks, and buses through a
beneficial in several ways to the society. Therefore, with rising demand for waste
combination of tax exemptions, investment subsidies, and incentives for biogas
management across the world, biogas production is also expected to rise, which
injection into the natural-gas grid. China, France, the United Kingdom, and
is expected to augment the growth of biogas-based engines during the forecast
Scandinavian countries, in particular, have strongly supported the transition to
period.
biogas in the transport sector.
Top 5 Municipal Solid Waste (MSW)-generating Countries in metric ton/day
• The main challenge for biogas as a fuel solution is the cost of the product.
Country 2016 2025
Production costs for biogas are typically USD 0.22/ cubic meter (m3 ) to USD
US 624,700 701,709
0.39/m3 methane for manure-based biogas production, and USD 0.11/m3 to
China 520,548 1,397,755
USD 0.50/m3 methane for industrial waste-based biogas production.
Brazil 149,096 330,960
• Extensive research is being done on the optimization of biogas production cost,
Japan 144,466 146,982
by exploiting more easily available feedstock. This is expected to increase
Germany 127,816 126,633
process efficiency and decrease the production costs of biogas for vehicle fuel
India 109,589 376,639
in the near future.
Russian Federation 100,027 120,076
SOURCE: World Bank
58
8.1 North America
8.2 Europe
8. REGIONAL ANALYSIS 8.3 Asia-Pacific
8.4 South America
8.5 Middle East & Africa

8. MARKET SEGMENTATION - BY REGION 59
Gas Engine Market: Size and Demand Forecast in USD billion, by Region, Global, 2017-2023
1.56
1.47
1.43
1.27
1.21 1.21
1.15 1.15
Revenue (in USD billion)
1.09 1.12
1.05
0.99
0.65
0.48 0.51
0.45 0.48
0.37 0.39 0.40
North America Europe Asia-Pacific South America Middle East & Africa
Region
2017 (a) 2018 (e) 2019 (f) 2023 (f) Source: Mordor Intelligence

60
8.1 NORTH AMERICA

8.1 NORTH AMERICA 61
Gas Engine Market: Size and Demand Forecast in USD billion,

UNITED STATES North America, 2017-2023
• According to the International Energy Agency (IEA), the global natural gas 1.56
1.48
1.41
market is expected to undergo a significant transformation, on account of new 1.34
1.21 1.27
1.15
supplies coming from the United States, for meeting the increasing demand in
In USD billion
developing economies.
• As of 2017, natural gas surpassed coal as the main fuel used to generate
electricity in the country, owing to the boom in shale gas production in the
United States, and a shift toward cleaner energy fuels and decline in the gas
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
prices. According to the Annual Energy Outlook 2018 Reference case, natural Source: Mordor Intelligence Analysis
gas is expected to remain as the leading source of electricity generation Primary Energy Mix Share, by Energy Source (%), United
through the years till 2050. Natural gas is estimated to account for almost 35% States, 2017
of total electricity generation by 2050 in the United States. Natural gas-fired 0.32% 0.53% Oil
power is widely distributed across the United States. In 2016, natural gas-fired Natural Gas
6.92% 9.78%
combined-cycle units accounted for 53% of the 449 GW of total natural gas- Coal
powered generator capacity. 31.97% Nuclear
Hydro Electric
• Therefore, the increasing growth in shale gas production and the rising demand 19.79%
Renewables
for electricity are expected to drive the demand for gas engines, over the
Other Energy Sources
forecast period. 30.69%
Source: BP Statistics

• Gas engines are typically applied as stationary continuous generation units and Natural Gas Consumption, by End User, in %, United States,
can also operate as peaking plants to meet fluctuations in local electricity 2017
demand.
• Gas engines are beneficial when used in combined heat and power (CHP) Residential
29%
generation applications, such as district heating schemes, hospitals,
universities or industrial plants. While industrial sector represent majority of Commercial
51%
capacity additions, new CHP capacity in the commercial sector is growing at a
faster rate, reflecting a changing market atmosphere. 20% Industrial
• As of 2017, there are 81.3 GW of CHP installed in the country. CHP provides a
significant amount of the United States’ power and heat supply, providing Source: EIA
electricity and thermal energy for almost 4,400 facilities around the country.
• Several regions in the United States do not meet the National Ambient Air
• Moreover, there were 111 new CHP installations, representing 554 MW of new Quality Standards, and consequently air-quality management districts are
capacity in 2017. The states with most new CHP installations were New York compelling commercial fleet owners/operators to switch to cleaner alternative
(53), New Jersey (10), California (5) and Pennsylvania (5), and the top two fuel fuels instead of diesel. Natural gas is the most commonly available alternative
types for the new CHP installations were natural gas (94) and biomass (13). In fuel for commercial vehicles and the natural gas engines produce 20% less
addition to this, the operators of the large district heating CHP systems who green house gas emissions, in comparison to that of diesel engines.
traditionally used the gas turbines are now shifting toward gas engines with the
• CNG and LNG are considered as alternative fuels under the Energy Policy Act
higher power ratings owing to the volatility of electricity prices and requirement
of 1992. There are light-, medium-, and heavy-duty NGVs available in the
of higher flexibility in the CHP plants. Thus, the increasing number of CHP
country. As of July 2018 , there are 175,000 natural gas vehicles and 922
installations in the country is expected to boost the demand gas engines, over
compressed natural gas fuelling stations in the country.
the forecast period.

• Heavy duty trucks account for 4,600 units, medium-duty trucks account for 5,800 and transit buses account for 20,000 units operating on natural gas.
• Increasing demand to reduce the carbon footprint in the shipping industry, along with IMO’s deadline, in order to reduce the sulphur content in marine fuels up to
0.5%, is driving the demand for LNG fuel. With the presence of large number of container vessels, cruise ships, bulk carriers, and ferries, the United States projects
a great opportunity for gas engine manufacturers in the maritime sector as well. The United States Environmental Protection Agency’s Ports initiative is an incentive-
based program designed to reduce emissions by encouraging port authorities and terminal operators, aiming to to replace older diesel engines with engines that use
cleaner fuels. Moreover, the US Department of Transportation has designated natural gas fueling corridors in strategic locations along major highways, in order to
improve the mobility of alternative fuel vehicles.
• In 2017, renewable sources accounted for 18% of the total electricity produced in the United States. This shift towards renewable energy is majorly driven by new
solar and wind projects in the country, which made around 62% of new power construction in 2017. The increasing share of the renewables in the country pose a
threat to the gas engines market over the forecast period.
Number of Natural Gas Fueling Stations, United States , 2008- Number of Natural Gas Vehicles, United States, 1996-2018
2018 175000
160000
1750 1822
121249 127735
117074
102840
1100 1120
60,807
2008 2010 2012 2018 1996 2000 2004 2008 2012 2016 2018
Source: IANGV Source: IANGV

Natural Gas Production and Consumption in billion cubic meter,

800 United States, 2010-2017
750
700
650
In billion cubic meter
600
740.3 743.6 750.3 739.5

729.3 734.5 722.3
550 704.7 707
688.1
649.1 655.7 648.2 658.2
617.4
500
575.2
450
400
Natural Gas Production Natural Gas Consumption
2010 2011 2012 2013 2014 2015 2016 2017


Primary Energy Mix Share (%), by Energy Source,, Canada,

CANADA 2017
• As of 2017, Canada is the fifth largest producer of natural gas and accounts for 6% 1%
around 5% of the global production. The country has an abundant natural gas 11% Oil
resources. The total remaining natural gas resource size is 30.8 tcm, with 72% Natural Gas
11% Coal
coming from tight and shale gas formations in Alberta and British Colombia.
Nuclear Energy
• In 2017, natural gas accounted for 11% of the total electricity generated. In Hydro Electric
14%
2016, the government of Canada ratified the Paris Agreement, committing to a Renewables
57% Others
30% reduction in overall greenhouse gas (GHG) emissions by 2030. In the
same year, Pan-Canadian Framework on Clean Growth and Climate Change Source: BP Statistics
was introduced, which includes a commitment to expand clean energy sources, Electricity Consumption, in TWh, Canada , 2010-2017
supported by infrastructure investment and regulations for natural gas-fired 572
electricity generation.
• On February 2018, the federal government released its long-awaited draft 540
538
in TWh
534 535
regulations for the phase out of coal-fired power plants in the country. This step 530 532
was taken to promote the country’s transition toward a low-carbon economy. 520
Due to this, provinces, such as Alberta, Saskatchewan, and Nova Scotia, are
planning to replace a lot of their lost generation capacity with natural gas.
2010 2011 2012 2013 2014 2015 2016 2017


• Several factors, such as low natural gas prices due to increased North • Natural gas accounts for 68% of the energy use in the industrial sector as a
American shale and tight gas production, phase-out of coal-fired power plants, heat source. Millions of Canadian homes use natural gas to heat and cool their
development in the natural gas infrastructure, and overall increase in electricity homes, and to cook food and heat water. The commercial sector also follows
demand in the country are expected to increase the natural gas-fired power the residential use patterns, such as space heating, water heating, and
generation in Canada, which, in turn, is likely to increase the demand for gas cooking.
engines over the forecast period.
• In January 2018, Canadian Ministry of Innovation, Science and Economic
• The NGTL System is a natural gas pipeline system in Western Canada Development partnered with the Southern Alberta Institute of Technology
comprised of approximately 24,320 km of pipeline and associated facilities. In (SAIT) on a energy efficiency pilot, which includes the use of micro-combined
2017, expansion program on the NOVA Gas Transmission Ltd (NGTL) System heat and power technologies to reduce energy use and costs in residential
added approximately 230 km of new pipeline and additional compression sector. The trail includes the development of a demonstrational residential
facilities, while increasing the NGTL System capacity by 500 mcfd. This home with onsite natural gas-powered energy generation source.
expansion program represented a USD 1.7 billion investment in Canadian
Natural Gas Consumption (%), by End User, Canada, 2017
natural gas infrastructure and connects natural gas from northwest Alberta and
northeast British Colombia to the NGTL System. 18% Residential
• Natural gas-fired reciprocating engines are typically used in the natural gas
industry at pipeline compressor, storage stations, and at gas processing plants. 15% Commercial
Factors like increasing focus on the development of natural gas infrastructure
67%
in the country, augmented by the upcoming natural gas pipeline projects, such
Industrial
as Canadian Mainline Expansion, Coastal GasLink Pipeline Project, and NGTL
System Expansion Projects, are expected to increase the demand for natural Source: Statistics Canada
gas-fired engines, over the forecast period.
• Natural gas vehicles operate in Canada in a variety of applications, including rail, marine, medium and heavy duty trucks, light duty transit, and off road vehicles.
Almost two-thirds of all municipal vehicles purchased in the last five years use CNG. The City of Surrey is one of Canada’s early adopters, with many other large
urban municipalities following suit in developing renewable natural gas (RNG) facilities for fuelling the municipal vehicles. In addition to the factory built options, fleet
owners can also use aftermarket conversion kits as a way to improve the performance of existing fleet vehicles.
• CNG busses are delivering cost effective emissions reductions to Canadian communities. Nanaimo transit, Whistler transit, and Calgary transit are some of those
operating CNG bus fleets in the country. In addition to this, manufacturers, like General Electric and Caterpillar, have been piloting LNG or CNG locomotives in the
country. In 2017, one of the largest ferry operators in Canada, BC Ferries began upgrading its five Spirit Class vessel to operate on LNG. The project is set to be
completed in 2019 and with these upgrades, the company expects a CO2 emissions reduction of 12,000 ton, annually.
• Electric vehicle adoption in Canada is growing significantly. In 2017, the number of plug-in vehicles went close to 50,000 and the sales of EVs grew 68% in the same
year. Increasing number of EVs in the country is expected to hinder the growth of gas-engines in the transportation sector, over the forecast period.
Number of Natural Gas Vehicles, Canada, 1996-2018 Annual EV Sales, Canada, 2013-2017
20505 20505
17,220 8726
15000
12140 12500 12500
5893
2694 9838
2470
1613 4378 5130
1,641 2886
2013 2014 2015 2016 2017
1996 2000 2004 2008 2012 2016 2018
Source: IANGV PHEV BEV Source: Fleetcarma

Natural Gas Production and Consumption in billion cubic meters,

Canada, 2010-2017
In billion cubic meters
171.6 176.3
159.1 160.9
149.6 151.1 150.3 151.9
115.7
109.5
103.2 102.9
95.6 98
88.7 92.8
2010 2011 2012 2013 2014 2015 2016 2017


MEXICO Primary Energy Mix Share (%), by Energy Source, Mexico,

2017
• As of 2017, natural gas production in Mexico reached 3.9 bcf/d, representing a
6%
decline of 7.1%, compared to natural gas production in 2016. Natural gas 13%
3% 10%
production has been declining since 2009, when it reached a maximum Oil
extraction level of 7,030 mcf/d. Natural Gas
10% Coal
• In 2017, natural gas accounted for 58%, of the total electricity generated in the Nuclear Energy
country. The introduction of Mexico’s energy reforms in 2013-2014, unleashed Hydro Electric
58%
a profound transformation in the natural gas industry that boosted the country’s Renewables
gas market. Due to new institutional scaffolding put in place by the reforms,
and the Mexican government’s ongoing strategy to encourage power
generation from cleaner sources, the demand for natural gas in the country has • In June 2018, the Mexican government bought 5,106 mcf/d of natural gas, from
increased sharply, over the past few years. Although the demand for gas has the United States. The volumes of gas exports from the United States to
been accompanied by a continuous decline in domestic production, natural gas Mexico are expected to rise, as more pipeline and power plants come online.
imports from other countries, such as the United States, are filling the gap New pipelines are being built, to move increasing volumes of the US-sourced
between production and consumption. gas to Mexican power plants, industrial customers, and other end users. Two
natural gas pipelines – the Nueva Era pipeline, and the Nueva Era pipeline,
• According to the estimates from the National Hydrocarbons Commission
with a total carrying capacity of nearly 1.2 bcf/d – went online in June 2018.
(CNH), from January to October 2017, the imports of natural gas averaged
The pipelines, which include Enbridge’s Nueces-Brownsville project, and three
61%, of the country’s overall consumption, including for power generation,
other gas projects in Mexico, are expected to start by November 2018.
transport, household, and commercial uses.

• In 2017, there was a considerable increase in the price of gasoline, as a part of • The country is looking to reach the target of 50% power from renewable
the Energy Reform, which forced users to go for alternative transport fuel, sources, by 2050. Adding to this, the Mexican government is providing
including converting vehicles to natural gas. As a part of the Mexican incentives to consumers and cab operators, to buy electric vehicles, in order to
government’s commitment to environment protection, 406 official vehicles were curb the rising pollution levels in the country. As a result, in 2017, the sales of
transformed, from gasoline to CNG, in 2017. electric vehicles in Mexico rose by 67.3% ,on a y-o-y basis.
• As of 2017, Mexico has more than 10,000 vehicles that operate on CNG. Of • Factors, such as the increasing adoption of renewables, due to the declining
the vehicles running on natural gas, taxis account for 45%, followed by public costs of solar and wind power, are expected to lead to the replacement of gas-
transport (15%) and freight transport (40%). Energia y Combustibles (Enco) is fired power generation, and an increase in the number of electric vehicles on
planning to invest USD 6.6 million, in 2018, in new service stations for natural the road, as they contribute zero emissions. This is likely to restrain the gas
gas vehicles in the country. engines market, during the forecast period.
Number of Natural Gas Vehicles, Mexico, 1996-2018
• As of April 2018, there are 4.1 GW of combined heat and power (CHP) installed
15000
in Mexico, and another 2.35 GW of capacity, still in the planning stages. The oil
and chemical industries are the most prominent sectors, accounting for 19% of
the installed CHP capacity.
8000
• Mexico is close to getting 35% of its power from renewable sources, by 2021,
three years before the official time table, which was set for 2024. With the help
3073 3037 2600
of Mexico’s energy reform, a transition strategy was devised to achieve greater
1000
use of renewable energy sources and clean technologies. 1
1996 2000 2004 2008 2012 2016 2018

Source: IANGV


Mexico, 2010-2017
100
90
80
70
60
50
91.8
87.6
40 78.5 80.1 78
70.8 73.7
66.6
30
51.2 52.1 50.9 52.5 51.3 47.9
20 43.7 40.7
10
0
2010 2011 2012 2013 2014 2015 2016 2017


72
8.2 EUROPE

8.2 EUROPE 73
Russia Gas Engine Market: Size and Demand Forecast, in USD

billion, Europe, 2017-2023
• Russia’s energy policy is known as the ‘Energy Strategy of Russia by 2030’.
According to this, the development of the gas industry involves achieving 1.47
1.33 1.40
optimal balance of interest, between consumers and producers. Following are 1.21 1.27
In USD billion
1.09 1.15
the policy objectives, as set out in the Energy Strategy of Russia by 2030:
 Transition to innovative development and energy efficiency.
 Transformation of structure and scale of energy resource production.
 Creation of a competitive market, in the energy sector. 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 20202 (f) 2023 (f)
 Further integration into the global energy system.
Primary Energy Consumption in %, by Fuel, Russia, 2017
• The natural gas vehicles market has considerable growth opportunity in Russia,
facilitated by massive natural gas reserves, a well-developed gas distribution 13%
Oil
22%
network, lower priced natural gas, in comparison to conventional vehicle fuels,
and an expanding gas filling infrastructure. 13% Natural Gas
• Russia has a strategic policy to create a retail station chain in the country, and it
Coal
envisions creating a rapid expansion of natural gas vehicle infrastructure, in
more than 50 regions of priority, in the country, also focusing on the formation of
Other Types of Fuel
transit natural gas vehicle corridors. 52%

8.2 EUROPE 74
• Gazprom, the Russian gas company, in 2017, built and renovated 23 gas filling CNG sales by Gazprom, in million cubic meters, Russia, 2013-2017
stations, including the construction of the largest CNG station in Russia, and 525.9
480
In million cubic meters

Europe, which has an annual design capacity of 29.8 million cubic meters 436
404.8
of gas, in Moscow. 377
• The company has approved the 2017–2019 Program, which is aimed at the
construction of gas filling infrastructure, at industrial sites associated with
Gazprom subsidiaries. The program includes the installation of 100 gas
compression units. for servicing corporate vehicles.
2013 2014 2015 2016 2017
• The LNG infrastructure, specific to natural gas vehicles, is developing in
Source: Gazprom.com
Russia. As of 2017, out of 320 CNG filling stations in Russia, 271 were owned
Number of Natural Gas Vehicles, Russia, 2000-July 2018
by the Gazprom Group and Gazprom Gazomotornoye Toplivo. Moreover,
110050
Gazprom approved the 2016–2032 Development Program, which is aimed at 103000
95000
the production and use of small-scale LNG. 90000
In numbers
• The truck manufacturer. Kamaz, has planned to mass produce LNG fuelled
trucks. The tests conducted by the company on semi-tractor units, in April 2018,
40500
resulted in travel of up to 900 km, without refueling. 30000
• In April 2018, General Electric inked a supply agreement, with its authorized
channel partner, GreenTech Energy Company, for the delivery of 21 Jenbacher
2000 2004 2008 2012 2016 Jul-18
gas engines, for CHP generation, by the end of 2018. Source: NGV Global

8.2 EUROPE 75
• The order includes 10 J320 units, 10 J420 units, and a J316 unit, with a total capacity of 26 megawatts. The CHP units, with capacity ranging from 1 MW-1.5 MW,
will promote clean power, in industries such as food and beverage, glass, agriculture and chemical processes. Such developments pertaining to gas engine
deployment, are a big boost for its business in Russia.
• In April 2017, Sovcomflot’s Aframax, capable of shifting 600,000 barrels of oil, decided to fuel its tanker with LNG. The LNG fueled tankers in Russia, are likely to
increase in the coming years, on account of stricter environmental norms, imposed by the International Maritime Organization.
Natural Gas Production and Consumption, in billion cubic meters, Russia, 2010-2017
635.56
598.39 616.83 601.85 614.50 591.16 584.44 589.28
422.60 435.57 429.64 423.05 423.56 409.63 420.20 424.76
2010 2011 2012 2013 2014 2015 2016 2017 Source: BP Stats

8.2 EUROPE 76
Primary Energy Consumption (%), by Fuel, the United

United Kingdom
Kingdom, 2017
• In the United Kingdom, gas is anticipated to play a significant role in the energy Oil
mix, as the government has announced the closure of all coal-fired generation, 20%
by 2025. In 2015, the government announced that coal-based power Natural Gas
40%
generation will no longer be a part of United Kingdom’s energy mix, post 2025. 5%
Due to the phasing out of coal-fired power generation in the country, the Coal
demand for alternate sources of electricity is anticipated to increase.
35% Other Types of Fuel
• However, gas-based power generation is not expected to witness much
impetus, due to the closure of coal-fired power generation, on account of Source: BP Statistics
widespread development of renewable power projects.
Cumulative Installed Renewable Capacity, in megawatts (MW),
• In the United Kingdom, the capacity market originated, in 2014, which helps to the United Kingdom, 2010-2017
provide power to the electricity grid at short notice. The evolution of the 19836
capacity market in the United Kingdom is likely to provide a big boost for the 16217
14315
gas engine business, as gas engine-based power generation can be used for 13074
11899 12760
MW
11282
quick and flexible power generation. 9031 9535
6597
5422 5528
• In 2017, two gas engine plants, after auction in capacity markets, were 2937
1000 1754
awarded to Centrica, for deployment at Brigg, in Lincolnshire, and 95
Peterborough, in Cambridgeshire. 2010 2011 2012 2013 2014 2015 2016 2017
Wind Solar Source: BP Statistics

8.2 EUROPE 77
• In May 2018, Siemens received an order from its client, Knitting Wife Beck, in Yorkshire, for a Number of Natural Gas Vehicles, the United
supply of its new high-efficiency, low-emissions E-series 2 MW gas engines, for a power plant. Kingdom, 2008-July 2018
559
The new division of Siemens, Siemens Engine Business, will execute the project, which has a
capacity of 12 MW, for peak shaving application.
In numbers
• In the United Kingdom, a new wave of LNG plants is likely to be developed, due to an increasing 310 310
supply gap in the country. Moreover, new regulations from the International Maritime 221
Organization are forcing ship owners to explore LNG, and ports, such as Gibraltar, are preparing
to offer upgraded refueling services for the shipping industry, in the near future. Such
developments pertaining to the expansion in LNG infrastructure, and an increasing focus on the
2008 2012 2016 Jul-18
use of clean fuel in the shipping industry, are anticipated to drive the market for gas engines in Source: NGV
Global
the United Kingdom, during forecast period.
Natural Gas Production and Consumption, in billion cubic meters, the United Kingdom, 2010-2017
98.51
81.93 80.97
76.91 76.34 78.78

70.07 71.75
57.91
46.09 41.89
39.20 37.44 40.67 41.75
36.99

2010 2011 2012 2013 2014 2015 2016 2017 Source: BP Stats

8.2 EUROPE 78
France Primary Energy Consumption (%), by Fuel, France, 2017
• France has planned a massive change in its power industry, with its policy to
9% Oil
close up to 17 nuclear reactors, by the end of 2025. In 2017, the government of
France adopted a policy, to reduce the country’s reliance on nuclear power, by Natural Gas
33%
50%. The massive reduction in nuclear power generation in France, will require
Coal
the deployment of alternate modes of power generation. The country has
38%
planned to create 70-76 GW of renewable power infrastructure, by the end of Nuclear Energy
2023. The reduction in nuclear power generation, and the expansion of
16% Other Types of Fuel
renewable power infrastructure, which is an intermittent power source, are 4%
likely to create market opportunities, for the gas engine business in France. Source: BP Statistics
• The deployment of natural gas fuelled vehicles in France, has stabilized in Number of Natural Gas Vehicles, France, 2000-July 2018
recent years, due to a strategic policy of the government, to curtail the use of 14548 14548
13300
fossil fuel vehicles in the country. Paris has planned to ban all fossil fuel
vehicles, by 2030, which does not indicate a positive outlook for the gas engine 10150
In numbers
business in France, in the coming years. 7100
• The deployment of electric vehicles in France, is a restraining factor for the gas
3,309
engine market. As of July 2018, the number of plug-in car sales in the country
reached 18,000. It is expected that the deployment of electric vehicles in
France will increase in the coming years, on account of favorable policies, in 2000 2004 2008 2012 2016 Jul-18
Source: NGV Global
the country.

8.2 EUROPE 79
Cumulative Installed Renewable Capacity in Megawatt (MW), France, 2010- 2017
13559
11761
10324
9337
8164 8000
7583
MW
6811 6605 7125

5940 5702
4748
4094
2973
1209
2010 2011 2012 2013 2014 2015 2016 2017

Natural Gas Consumption in billion cubic meter, France,

2010-2017
• France has the largest gas transmission network in Europe, with four
49.56

LNG terminals functional in the country as of March 2018. Apart from 44.45 45.15 44.56 44.74
43.03 40.77
that, the country has the second-largest natural gas storage capacity in 37.92
the European Union, accounting for 16 billion cubic meter.
2010 2011 2012 2013 2014 2015 2016 2017


8.2 EUROPE 80
GERMANY Gas Engine Market: Market Size and Demand Forecast in USD
billion, Europe, 2017-2023
• As of 2017, the annual consumption of gas in Germany was dominated by
natural gas, with only a small share of biogas. 1.40 1.47
1.27 1.33
1.15 1.21
1.09
• The domestic production of natural gas in Germany was 6.38 billion cubic meter
In USD billion
in 2017, and the production levels have been declining since the late 1990s.
Further, the natural gas consumption of the country was as high as 90.16 billion
cubic meter in 2017.
Market Size and Demand Forecast

• The country relies mainly on Russia for its natural gas imports, and has been
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
working toward a new gas pipeline project, Nord Stream gas pipeline system, Source: Mordor Intelligence Analysis
which is expected to allow Germany to increase the imports directly from Primary Energy Consumption Share (%), by Fuel type,
Russia via the Baltic Sea. Germany, 2017
13.37%
• The outlook for the demand growth for gas engines in Germany is bright, as the
1.33%
country's energy mix relies heavily on natural gas, and the consumption rate is
5.13% Oil
not expected to decrease during the forecast period as well. 35.77% Natural Gas
Coal
• The country has set an ambitious climate protection target by 2050, which is the 21.27% Nuclear Energy
reduction of greenhouse gas emission levels by 80% to 95%, as compared to Hydroelectric
1990. The estimated increase in the share of natural gas in energy consumption Renewables
23.13%
is expected to positively impact the country’s ambition of climate protection.
Source: BP Stats

8.2 EUROPE 81
• Following the Fukushima Daiichi nuclear power plant (NPP) accident in March Consumption of Electricity in TWh, Germany, 2010-2017
2011, the German government has announced a gradual phase-out of the
547
nuclear power plant for commercial generation of electricity. The country aims
541 540
to phase out all the reactors by the end of 2022.
537
• Furthermore, in July 2018, the government also announced the formation of a
In TWh
special task commission to conduct the feasibility of phasing out of all coal- 531
528 528
based power plants in the coming years. The phasing out of coal and nuclear 526
power plant is expected to cause an additional strain on the electricity supply

network. Electricity Consumption
• In a bid to ensure sufficient and sustainable supply of electricity, the 2010 2011 2012 2013 2014 2015 2016 2017
government has been actively promoting the use of gas engine-based
Number of Natural Gas Vehicles (NGV), Germany, 2000-2017
combined heat and power (CHP) systems in the country. The country first
introduced CHP law in 2001, and has amended the law multiple times to further
95,498 93,222
encourage new installations and continually modernize the older ones. This, in
turn, has resulted in the country emerging as a pioneer in gas engine-based 64,454
CHP installation.
• Further, the country has been actively using solutions for district heating
19,400
purpose, which, in turn, is expected to additionally supplement the demand for
2,415 5,000
gas engines. In May 2015, General Electric (GE) announced the installation of
190 MWe gas engine-based CHP plant for municipal utility - Stadtwerke Kiel,
2000 2004 2008 2012 2016 2017
which would be used for district heating and electricity supply to nearby Source: IANGV Global
industries.
8.2 EUROPE 82
• In addition, the transportation sector is anticipated to account for approximately Solar Photovoltaic Installation in megawatt (MW), Germany,
20% of the GHG emission in the country. In a bid to reduce GHG emission and 2010-2017
42396
to ensure sustainable energy in the coming years, the government has been 40716
39,245
37,900
actively promoting the use of natural gas vehicles (NGVs) in the country. 36711
34007
• Furthermore, the country is also home to several of the automobile leaders,
In MW
such as Volkswagen, which has been actively promoting the use of NGVs in the 25917
country. Since July 2017, the monthly figures for new registrations of CNG
vehicles in Germany have been increasing, and are expected to further 18007
increase in the coming years. This, in turn, is expected to result in an increased 2010 2011 2012 2013 2014 2015 2016 2017
demand for gas engines in the country. Source: IRENA
• However, the country has been lately witnessing a surge in natural gas prices, Wind Energy Installation in megawatt (MW), Germany, 2010-
which is expected to further increase in 2019 as well, owing to hike in grid fees, 2017
55876
which, in turn, is expected to hamper the demand on the shorter run.
49552
• In addition, the country has emerged as a pioneer country in the region for the 44,580
In MW
development of renewables (both solar and wind), electric vehicles, and energy 38,614
storage, which is also expected to affect the demand for natural gas in the 33477
30979
country. In 2017, Germany was the biggest investor in the wind power 28712
26903
generation sector in the European region, with a total financing activity of EUR
2010 2011 2012 2013 2014 2015 2016 2017
6.7 billion for the construction of new onshore and offshore wind farms. A similar
Source: IRENA
investment in other renewables and electric vehicles is expected to hamper the
demand for gas engines in the country.
8.2 EUROPE 83

Germany, 2010-2017
90.16
88.07
84.97 84.88
80.86 81.11
76.95
73.90
11.13 10.47 9.46 8.61 8.08 7.53 6.92 6.38
2010 2011 2012 2013 2014 2015 2016 2017

Source: BP Stats

8.2 EUROPE 84
Rest of Europe Primary Energy Consumption (%), by Fuel, Italy, 2017
• Italy is witnessing widespread development of CNG refueling stations. Snam Oil

10%
S.p.A., which is one of the major regulated gas companies in Europe, has
5% Natural Gas
focused on providing momentum to Italy’s natural gas vehicle market. In August
6% 39%
2018, Snam and api Group signed a framework agreement for the Coal
development of around 200 new natural gas and bio methane fuelling stations Nuclear energy
in Italy. Apart from that, an agreement was signed between Eni and Snam to
Hydro electric
roll out 20 new CNG filling stations in the country, following an agreement with
40% Renew- ables
Snam4Mobility, a subsidiary Snam. The agreement is followed by a previous
contract signed by the two companies few months earlier to develop 14 CNG Source: BP Statistics
stations, which are likely to come online in the first quarter of 2019. The Cumulative Installed Renewable Capacity in Megawatt (MW),
initiative is aimed at promoting sustainable mobility with the deployment of Italy, 2010-2017
clean fuel vehicles in the country.
18915 19291 19700
18198 18606
16796
• In January 2017, the Ministry of Infrastructure and Transport approved the
13141
transformation of heavy-duty diesel vehicles with cylinder capacity between
MW
9162 9410 9662
9,676cc and 16,128cc – up to the Euro 6 category Dual Fuel vehicles. 8119 8561 8703
6936
5814
• In 2017, about EUR 12.5 million worth incentives were granted to renewable 3605
energy generation. Italy is growing as a country with renewable power

infrastructure. 2010 2011 2012 2013 2014 2015 2016 2017

8.2 EUROPE 85
• The Spanish shipping company, Baleària, one of the pioneer shipping Primary Energy Consumption, in % by Fuel, Greece, 2017
companies promoting the use of LNG, has developed two innovative ships
9% Oil
powered by LNG, which will operate in the Mediterranean. The ships are being
developed in the Italian shipyard Cantiere Navale Visentini, and are likely to be Natural Gas
33%
commissioned in 2019.
Coal
• Spain has the largest LNG regasification capacity in European Union, with
38%
2,232 billion cubic feet (bcf). As of 2018, Spain accounts for around 39% of the Nuclear energy
total LNG regasification capacity in the European Union. Spain has six active
16% Others
LNG regasification terminals, and it is expected to add 92bcf from two planned 4%
and announced LNG regasification terminals between 2018 and 2021. Source: BP Statistics
• The cogeneration in Spain witnessed a growth of 2.5% in the first quarter of • In 2017, Greece-based Gastrade signed a cooperation agreement with state-
2018, in comparison to the first quarter of the previous year. owned DEPA for the development of an LNG terminal in northern Greece.
• In June 2018, the energy supplier in Spain, Endesa S.A, planned to introduce • Greece has large fleet of ships, and it accounts for around 26.4% of the world
three new high-powered and ecologically efficient lorries that run on LNG fuel. tanker fleet. Greece has plans to become the regional marine bunkering and
Endesa S.A has focused on driving the deployment of natural gas powered distribution hub for LNG in the Eastern Mediterranean with the support of the
vehicles. The growing focus on the deployment of LNG fueled vehicles in Spain EU co-funded "Poseidon Med II" project. The project commenced in June
is anticipated to drive the demand for gas engines in coming years. 2015, which involves investments of EUR 53.3 million. The increasing focus on
the use of LNG-based fuel in the shipping sector of Greece is likely to drive the
• The prominent brands of gas engines in Spain include Siemens, Himoinsa, and
demand for gas engines during the forecast period.
Wärtsilä, amongst others.

8.2 EUROPE 86
Natural Gas Consumption in billion cubic meter, Greece, Primary Energy Consumption (%), by Fuel, Spain, 2017
2010-2017
11% Oil
4.60 4.82 3%
4.23 Natural Gas

3.73 3.73 4.00
9%
2.84 3.07 47% Coal
10% Nuclear energy
Hydro electric
20% Renewables
2010 2011 2012 2013 2014 2015 2016 2017
Source: BP Statistics Source: BP Statistics
Cumulative Installed Renewable Capacity in Megawatt (MW), Cumulative Installed Renewable Capacity in Megawatt (MW),
Greece, 2010-2017 Spain, 2010-2017
2579 2596 2604 2604 25412604

2370 22789 22958 22975 22938 23025 23120
2136 20693 21529
1978
1753 1809
1640 1536
MW
MW
1298
612 4792 5104 5354 5376 5425 5453 5600

4330
202
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017
Wind Solar Source: BP Statistics Wind Solar Source: BP Statistics

87
8.3 ASIA-PACIFIC

8.3 ASIA-PACIFIC.. 88
INDIA Gas Engine Market: Size and Demand Forecast in USD billion,
Asia-Pacific, 2017-2023
• The government of India has adopted a strategic policy toward clean energy
usage with a vision to create a gas-based economy in the country. The gas
1.43
1.26 1.34
pipeline infrastructure in India increased from 12,028 km in 2012 to 17,752 km
In USD billion
1.12 1.19
0.99 1.05
in September 2018. This is expected to lead to widespread growth in natural
gas production and procurement of cheap LNG. The country has set a target to
raise the share of gas in its primary energy mix to 15% by 2022. Such policy
level initiatives to boost the natural gas sector are anticipated to proliferate the
adoption of gas engine in the coming years. 2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 20202 (f) 2023 (f)
• The gas consumption in India is dominated majorly by four sectors, i.e.
Primary Energy Consumption (%), by fuel, India, 2017
fertilizers, power, city gas distribution (CGD), and refinery. The fertilizer industry
is witnessing huge augmentation due to priority of the same over the other 8% Coal
industries in terms of access to domestically produced gas. 6%
• In order to meet the growing demand potential for natural gas in India, the CGD Oil
sector is witnessing widespread growth. In the ninth bidding round for rolling out
of CGD, the government of India has planned to add 86 GAs (Geographical 30% 56% Natural Gas
Areas) covering 174 districts. After completion of the CGD network under the
ninth bidding round, the CGD coverage will encompass nearly 50% of the total
Others
640 districts in the country.

8.3 ASIA-PACIFIC 89
• In September 2018, as a major push toward gas-based transportation, the Natural Gas Vehicles, India, 2000-2018
Indian government announced the rollout of 10,000 CNG gas station at the 3090139
Society of Indian Automobile Manufacturers. This announcement was made 2557895

amidst the investments of over 70,000 crore, primarily for setting up of CGD
In numbers
network. This is likely to aid the growth of Indian CNG network , from 1,424 to
1250000
10,000. CNG is about 41-62% cheaper, as compared to the current prices of
petrol and diesel. Moreover, the total cost of ownership of CNG vehicle is 650000
around 20% cheaper than conventional vehicles. Therefore, the ease of 204000
10000
availability of CNG fuel is anticipated to drive the adoption of CNG vehicles in
2000 2004 2008 2012 2016 Jul-18
India. Source: NGV Global
Cumulative Installed Renewable Capacity in Megawatt (MW),
• In India, the expansion of CNG infrastructure is likely to increase the production
India, 2010-2017
of CNG vehicles, as manufacturers are focusing on new business opportunities 32878
that emanate from the demand for CNG vehicles. Therefore, the anticipated 28700
25088
surge in the manufacturing of CNG vehicles is likely to provide a huge thrust to 22465
20150 19047
the Indian gas engine market during the forecast period. However, the growth 18421
MW
16084
in renewable power is expected to restrain the market’s growth 13065
9418
• Prominent brands that supply gas engines in India are Cummins, Caterpillar, 5168
3290
562 923 1283
GE Jenbacher, Perkins, and Wärtsilä, among others. 37
2010 2011 2012 2013 2014 2015 2016 2017


8.3 ASIA-PACIFIC 90
Initiatives pertaining to the transportation sector, in order to address air pollution
• Introduction of cleaner/alternate fuels, like gaseous fuel (CNG, LPG, etc.)

• Universalization of Emission Standards, Bharat Stage (BS)-IV from 2017
• Leap-frogging from BS-IV to BS-VI fuel standards from 1 April, 2018
• Collection of Environmental Protection Charge on more than 2,000 CC diesel vehicles
• Notification of National Ambient Air Quality Standards
• Setting up of monitoring network for assessment of ambient air quality
• Issuance of directions under Section 18(1)(b) of Air (Prevention and Control of Pollution) Act, 1981, and under Section 5 of Environment (Protection) Act, 1986

India, 2010-2017
61.32
59.49
56.66
54.20
49.81 49.64 50.83
47.96 46.41
43.97
38.23
31.85 30.22 29.22 28.50
27.35

2010 2011 2012 2013 2014 2015 2016 2017
Source: BP Stats

8.3 ASIA-PACIFIC 91
CHINA Primary Energy Consumption (%), by Fuel, China, 2017
• The Chinese government formulated a strategy to promote the use of clean 14%
19%
fuel as source of energy. According to China’s 13th five year plan, the
Oil
government aims to reduce the share of coal in energy mix, from 64% in 2015
to 58% by 2020. As of 2017, the share of coal reduced to 60%. Furthermore, 7% Natural Gas
the plan focuses on augmenting the use of gas from 6% in 2015 to 10% by
Coal
2020. In China, the policy-level focus on increasing the usage of gas for energy
generation is likely to provide a huge thrust to the gas engine market over the Other Fuels
60%
forecast period.
• China is planning to limit the production of petrol and diesel cars, primarily to
tackle air pollution. This is expected to drive the adoption of gas fueled cars. Natural Gas Vehicles, China, 2000-2018
However, the massive growth in deployment of electric vehicles in the country 6080000
is likely to reduce the growth in adoption of gas fueled cars. 5000000
In numbers
• In the transportation sector, the deployment of natural gas trucks have
witnessed massive growth in the recent years. The production of natural gas
trucks increased from 19,600 in 2016 to 96,000 in 2017. 1577000
• In China, the natural gas vehicles save around RMB 2,500 to 3,000 each 400000
6000 69300
month, as compared to diesel vehicles. The adoption of natural gas trucks is
2000 2004 2008 2012 2016 Jul-18
anticipated to increase further, owing to the rising awareness regarding Source: NGV Global
environmental protection.
8.3 ASIA-PACIFIC 92
• China has long term plans to boost the use of LNG as marine fuel. The Ministry • The distributed energy systems are gaining immense popularity, as they can
of Transport aims to formulate standard specification for the usage of LNG as complement large thermal power plants and steam generators. The gas
fuel in marine transport by 2020. Furthermore, it is planning to develop a well engine-based distributed power systems are witnessing widespread adoption
connected network. By 2025, a fully functional LNG transportation system- due to flexible and efficient power generation. In 2017, in China, the
along the inland waterways of China-is likely to be functional. The plan deployment of 30 MW combined heat and power (CHP) plant to CGGC UN
promotes the use of LNG as fuel for port vehicles and vessels. power was contracted to Wärtsilä. This marks the entry of gas-fired medium-
speed engine power plant in the Chinese market.
• In July 2018, Omnitek Engineering Corp. announced the commencement of
natural gas engine components’ shipment to its exclusive distributor in China- • The major companies involved in the manufacturing of gas engines include
Omnitek Beijing. The gas engine components will be used to convert large Guangxi Yuchai Machinery Company Limited, Cummins Inc., Caterpillar Inc.,
marine engines, mining-trucks, and power generators from diesel to natural and Weichai Westport new energy power Co. Ltd, among others.
gas. Omnitek Beijing is a partner to a new gas engine manufacturing facility, Electric Vehicle Sales in thousand, China, 2015-2018(e)
which is being built in Shandong Province, with an annual capacity of
40,000 natural gas engines annually. 275
In thousands
• In China, the imports of LNG witnessed huge surge in recent years, to 42.3%
in 2017. PetroChina commenced the construction work of its four additional 196
160,000 m3 storage tanks in the third phase of its Tangshan terminal project, 1100
171
primarily due to the increasing demand for LNG in the country. 124 602
351
212
• The development of natural gas infrastructure in China is likely to boost the gas
2015 2016 2017 2018(e)
engine market’s growth.
Commercial Vehicles Passenger Car Source: NGV Global

8.3 ASIA-PACIFIC 93

China, 2010-2017
240.44
209.44
194.69
188.36
171.88
149.19 150.88
135.67 137.94 135.16
131.18
121.81
111.48 108.87
106.17
96.54
2010 2011 2012 2013 2014 2015 2016 2017
Source: BP Stats

8.3 ASIA-PACIFIC 94
JAPAN Primary Energy Consumption (%), by Fuel, Japan, 2017
• In Japan, the earthquake and tsunami of 2011 led to the reduction in nuclear-
based power generation. This resulted in proliferation of alternative sources of 10%
Oil
electricity. Moreover, the country is focusing on using clean and reliable
sources of energy, which makes the market scenario favourable for gas 41% Natural Gas
engines. 27%
Coal
• The electricity prices in Japan experienced a surge, primarily due to the rising
fossil fuel imports, spurred by closure of above 40 GW of nuclear capacity. The Others
surge in electricity prices in Japan increased the adoption of energy-efficient 22%

technologies, such as gas engines.
• The policy makers of Japan are focusing on developing capacity market for • The deployment of gas engine power plants (which has become necessary for
electricity in the country, and thus, are introducing market reforms that are the distribution of power systems in small and medium scale range for utility
aimed at stimulating interest among the power producers and utilities for the and captive use) is increasing to ensure a stable power supply.
deployment of technologies, such as combined heat and power (CHP).
• Japan is one of the leading markets for biomass power across the world.
However, the rise in deployment of renewable sources of electricity, especially
Moreover, the Japanese government has planned to increase the generation of
solar and wind, is expected to hamper the gas engine market’s growth.
biomass between 2015-2030. In order to provide impetus to biomass-based
• In 2012, In Japan, the first gas engine power plant was delivered by Kawasaki power generation, the government planned to allocate 20% of government
Heavy Industries Ltd. This plant had a capacity of 110 MW, and was delivered incentives for renewable generation.
to Nihon Techno Co. Ltd- a power producer and supplier.

8.3 ASIA-PACIFIC 95
• The Japanese government is planning to diversify the transportation sector, Natural Gas Vehicles, Japan, 2000-July 2018
based on the type of fuel. The government intends to switch 30,000 trucks from 47158
42590 42590
diesel to LNG fuelled, and it is expected that there will be 500,000 gas vehicles
34203
in Japan by 2030.
In numbers
• In October 2018, IVECO, a Vehicle manufacturer, launched natural gas 20638
powered vehicles in the Japanese market. The company signed an agreement
with Fuji Transport for the sale of its first IVECO Stralis NP 400 Liquefied
5252
Natural Gas (LNG) truck. Fuji Transport will use the vehicles for Tokyo-Osaka
route and in its operations for selected customers. 2000 2004 2008 2012 2016 Jul-18
Source: NGV Global
• Japan is witnessing growth in the number of LNG fuelled vessels, primarily due
Market Share by volume of Electric Vehicles (%), Japan, 2010-
to its strategic advantage. The Japanese shipping sector witnessed penetration
2017
of gas engines in 2016, with Wärtsilä building 16 new gas carrier ships. The
1.00%
rising adoption of gas-based transportation system in Japan is anticipated to
In Percentage
drive the gas engine market’s growth. However, the growing adoption of electric
0.68%
0.63% 0.59%
vehicles is likely to restrain the demand for gas engines. 0.58%
0.53%
• The major companies operating the Japanese gas engine market 0.35%
are Mitsubishi Heavy Industries Ltd., Kawasaki, Wärtsilä, , etc.

0.06%
2010 2011 2012 2013 2014 2015 2016 2017

Source: IEA

8.3 ASIA-PACIFIC 96
Natural Gas Consumption in billion cubic meter, Japan, 2010-2017
122.41 122.33 120.52 118.72 116.42 117.08

110.43
98.92
2010 2011 2012 2013 2014 2015 2016 2017 Source: BP Stats

8.3 ASIA-PACIFIC 97
REST OF ASIA-PACIFIC Primary Energy Consumption(%), by Fuel, Thailand, 2017
• Thailand is planning to triple its LNG intake by 2022, on account of dwindling

4%
domestic natural gas output. Thailand is heavily dependent on natural gas to
14% Oil
meet its energy requirement. The demand for natural gas is anticipated to
increase at a rate of above 7% annually between 2016-2036, which is expected Natural Gas
49%
to create new market opportunities for natural gas-based engine business in
Coal
the country.
33%
• In January 2017, two Japanese firms - Marubeni and Itochu- won a contract to Other Fuels
build a 430 km gas pipeline in Thailand, and the contract is worth USD 2.8
billion. The new pipeline will connect Gulf of Thailand coast at Rayong to
Nonthaburi Province north of Bangkok. The development of such projects is • Myanmar is the second largest producer of natural gas in South-Asia, and the
likely to boost the natural gas import in Thailand over the forecast period. country is likely to witness growth in the production of natural gas on the
account of lifting of sactions by United States and many European Union
• In July 2017, Kawasaki Heavy Industries Ltd. received an order from Jurong
nations in 2012. Moreover, the opening of oil and gas sector is likely to attract
Engineering Limited (JE) for the supply of three Kawasaki Green Gas Engines
investments.
to be deployed at the Berkprai Cogeneration Project in Thailand.
• In July 2018, Wärtsilä was awarded a contract by SEPCOIII Electric Power
• In 2016, Souer Thailand was appointed as an authorized gas engine distributor Construction (SEPCOIII), to supply the generating equipment for a new 145
for Jenbacher engines in Thailand by General Electric. The rising demand from MW gas-fired power plant in Myanmar. As per the contract, Wärtsilä will supply
oil field gas compression, power generation, and other industrial customers led 50SG gas fuelled engines for the power plant located in Kyaukse township,
to the development of distributor for gas engines in the country. Mandalay region, and the plant is scheduled to be operational by the first
quarter of 2019.
8.3 ASIA-PACIFIC 98
Natural Gas Vehicles, Myanmar, 2004-2018 Natural Gas Vehicles in Thailand, 2000- 2018
474486 474486
358000
In numbers
In numbers
28400 28297 28297
14884
127735
200 82 4260
2004 2008 2012 2016 Jul-18 2000 2004 2008 2012 2016 Jul-18
Source: NGV Global Source: NGV Global
Cumulative Installed Renewable Capacity in Megawatt (MW), Thailand, 2010-2017

2700
2449
MW
1420
1299
824
628
507
388
242 223 225 234
6 49 7 112
2010 2011 2012 2013 2014 2015 2016 2017


8.3 ASIA-PACIFIC 99
• Australia is one of the leading exporters of LNG across the world, and the country needs to augment its LNG production capacity in coming years, primarily to meet
the requirement for export contracts and domestic demand. Apart from that, the country is witnessing growth in LNG fuelled ships, due to the rising focus on clean
fuel usage in the maritime industry. In 2016, The SeaRoad Mersey II became the first ship in Australia to use clean, green LNG fuel and power technology, which is
a big boost for the Australian gas engine market. However, the renewable power in Australia is growing rapidly, which can be big restrain for the gas engine market’s
growth over the forecast period.
Natural Gas Production and Consumption in billion cubic meters, Australia, 2010-2017
113.46
96.42
76.04
61.80 66.64
54.01 55.65 59.53
37.17 40.10 42.11 41.73 41.86
33.78 35.28 35.39

2010 2011 2012 2013 2014 2015 2016 2017 Source: BP Stats
Cumulative Installed Renewable Capacity in Megawatt (MW), by Type, Australia, 2010-2017

7200
5950
5109
4189 4327 4572
4056 4088
3489
MW
2834 3226
2084 2476 2415
1377
571
2010 2011 2012 2013 2014 2015 2016 2017


8.3 ASIA-PACIFIC 100
• In 2017, the Malaysia-based distributor and service partner, Dana Engineering Cumulative Installed Solar Capacity in Megawatt (MW),
secured a contract to provide six Jenbacher Type 4 gas engines to Concord Malaysia, 2010-2017
386
Green Energy Sdn Bhd (CGE) for the development of biogas projects.
336
• In October 2018, Gas Malaysia Bhd announced the successful commissioning 264
MW
of its second gas engine-based co-generation plant along with its joint venture 206
partner Tokyo Gas Engineering Solutions Corp. The development of such 141
projects are a big boost for the gas engine business.

34
13 14
• However, the deployment of wind power projects in the country may hamper
2010 2011 2012 2013 2014 2015 2016 2017
the market growth pertaining to the gas engine market.
• In May 2018, the Ministry of Oceans and Fisheries in South Korea announced
Natural Gas Consumption, in billion cubic meters, South
launching a project to develop its liquefied natural gas (LNG) bunkering
Korea, 2010-2017
technology to meet the rising demand for LNG as marine fuel, which is
52.53 54.98
witnessing widespread requirement due to more stringent environmental 48.45 50.00 47.64 49.37
45.02 45.65

regulations from 2020.
• The shipping industry of South Korea is facing a challenging situation on

account of bankruptcy of the Hanjin Shipping in April 2018, which has led to a
sales reduction of over 9 billion. The multiyear slump in the country’s maritime
industry has led the Ministry of Oceans and Fisheries to look for underwriting of
2010 2011 2012 2013 2014 2015 2016 2017
the 200 ship orders. Source: BP Stats

101
8.4 SOUTH AMERICA

8.4 SOUTH AMERICA 102
BRAZIL Gas Engine Market: Market Size and Demand Forecast in USD
• Natural gas is on a fast track to overtake coal as the world’s second-largest fuel, billion, South America, 2017-2023
after oil, and several of the South American countries are witnessing a similar 0.48
0.44 0.46
increase in the quest for natural gas. 0.40 0.42
0.37 0.39
• Over the last decade, the trend in the share of natural gas in the Brazilian
In USD billion
energy matrix has been rising, in line with that observed in the other emerging
and developing countries. As per the Brazilian Ministry of Mines and Energy
(MME), the average Brazilian domestic natural gas (NG) supply in 2017 reached
60.46 million cubic meter/day, up from an average of 52.40 million cubic
2017 (a) 2018 (e) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
meter/day in the previous year.
• Although oil and hydroelectricity accounts for approximately 75% of the total
Primary Energy Consumption Share (%), by Fuel type,
primary energy mix in the country, the Brazilian government plans to intensify the
Brazil, 2017
development of natural gas, in a bid to encourage energy source diversification. 7.53%
In 2016, the Brazilian government launched the ‘Gas for Growth’ initiative
designed to boost the country’s natural gas consumption.
Oil
• The initiative allows several supportive measures, such as (a) free-trade Natural Gas
28.40% 46.05%
negotiation process among operators and pipelines and gas storage terminal Coal
Nuclear Energy
owners (b) tax reform for players (c) more flexible licensing procedures for the
Hydroelectric
construction and operation of gas pipelines (d) integration of the electric and
Renewables
natural gas sectors. Such incentives are expected to result in the increased 1.21% 11.20%
5.62% Source: BP Stats
consumption of natural gas across sectors, and in turn, is expected to
supplement the demand for natural gas based engines in the country.
• In addition, the government also plans to attract investment in the prolific pre-salt Consumption of Electricity in TWh, Brazil, 2010-2017
region in the coming years, in a bid to boost the domestic natural gas supply, as
well as to improve the associated pipeline infrastructure in the country. 522 518 522
509 514
• Over the next few years, the government plans to build several natural gas 492
In TWh
production, processing, and transportation infrastructures in Brazil, such as 476
natural gas pipeline connecting the pre-salt region, in a bid to ensure sufficient 459
domestic gas supply for the power generation, transportation, and other sectors.
• The average electricity consumption is expected to increase by 4.7% between

Electricity Consumption
over the next five years and natural gas is expected to form a significant share of
2010 2011 2012 2013 2014 2015 2016 2017
it. As the country relies heavily on hydropower for electricity generation, recent Source: Mordor Intelligence Analysis
droughts in the country have resulted in several power outages. With improving Number of Natural Gas Vehicles (NGV), Brazil, 2000-2016
infrastructure for natural gas and expected increase in domestic natural gas 1,859,300
1,739,676
supply, the demand for gas engines based distributed power generation is 1,588,331
expected to increase, as it addresses to the environment pollution concerns.
• Furthermore, the transport sector is also expected to hold a significant share of 850,000
demand for gas engines as the number of NGV increases. The total number of
NGV has increased from mere 60,000 to 1869,300 during 2000-2016, and is
60,000
expected to rise further as the government plans to promote cleaner
transportation to combat GHG emission and climate change. Furthermore, as Natural Gas Vehicles
2000 2004 2008 2012 2016
the country remains home to deepwater activities, the use of natural gas engines Source: IANGV Global
is expected to remain high from the marine transportation sector as well.
• In November 2015, Scania announced the feasibility check of the compressed Solar Photovoltaic Installation in megawatts (MW), Brazil,
natural gas (CNG) buses in Sao Paulo, using the company’s third-generation 2010-2017
engines, which offer greater thermal efficiency. The company plans to further 1097
increase the deployment of natural gas engines based transportation, as it

anticipates a greater demand for natural gas in the country’s transportation sector
In MW
to combat the rising air pollution.
• Although combined heat and power (CHP) accounts for 1% of the total electricity
generation in the country, the scope for the deployment of biomass- and gas- 23
80
1 1 2 5 15
fueled CHP plants remains high in the country, as the country aims to promote
2010 2011 2012 2013 2014 2015 2016 2017
renewables and decrease its overdependence on hydropower. In 2013, General
Source: IRENA
Electric (GE) installed three of its Jenbacher natural gas engines to power a new
Wind Energy Installation in megawatts (MW), Brazil,
12-megawatt (MW) quad generation plant at the Coca-Cola bottling facility in
2010-2017
Brazil.
12294
• However, the increasing installation of renewables in the country’s energy mix,
10124
particularly in the last few years, presents a challenge for the use of gas engines
7,633
In MW
across power generation.
4,888
• Favorable policies, such as the expansion of ‘net metering program’ and passing
1894 2202
of Resolution No. 687 have promoted the deployment of solar and wind energy 927 1426
power plants in the country. Similarly, the government also plans to fast-track the
2010 2011 2012 2013 2014 2015 2016 2017
deployment of electric vehicles in the country, which in turn, is also expected to
Source: IRENA
affect the demand for gas engines from the transportation sector in the longer run.


Brazil, 2010-2017
43.67
41.35
39.04 38.34
37.72
33.13
27.51 28.05 27.95
24.21 24.53
23.74
22.32
20.17
17.52
15.28
2010 2011 2012 2013 2014 2015 2016 2017

Source: BP Stats

ARGENTINA Primary Energy Consumption Share (%), by Fuel type,

• Argentina remains the second-largest country in South America, in terms of GDP, Argentina, 2017
0.79%
where natural gas accounts for approximately 50% of the primary energy demand.
1.24%
At the end of 2017, Argentina has a substantial unconventional resource base, with 1.65% 10.96%
an estimated 22.7 TCM of technically recoverable shale gas (second-largest in the Oil
world). 36.84% Natural Gas
Coal
• Until 2010, the country was a power exporting country. However, the increased
Nuclear Energy
power consumption rate, coupled with a steady decline in developing new power
48.52% Hydroelectric
projects, and the decline in the extraction of natural gas have resulted in Argentina Renewables
suffering from power crisis in the recent years. Natural gas-fired plants remain the
cornerstone of the Argentine electricity mix (56.31% share in 2017). Source: BP Stats
Electricity Generation Share (%), by Fuel type, Argentina, Consumption of Electricity in TWh, Argentina, 2010-2017
2017
2.05%
0.33% 7.57% 130 130 130
126
Oil 120 121
In TWh
Natural Gas 116
28.29%
Coal 113
Nuclear Energy
Hydroelectric
56.31%
Renewables
4.26%
1.18% Others Electricity Consumption
2010 2011 2012 2013 2014 2015 2016 2017
Source: BP Stats Source: Mordor Intelligence Analysis

• However, the recent power outages have resulted in several commercial, industrial, Total Renewable Energy Installation in megawatts (MW),
and residential users opting for natural gas engine based power generation to Argentina, 2010-2017
ensure sufficient power supply. Furthermore, the government has implemented
11559
several steps, such as fast-tracking the development of the long-delayed natural gas
10980 11,020 11,021 11085
based power projects and to promote renewables. 10908
10760
In MW
• In January 2017, the Finland-based company, Wartsila, was awarded a USD 26 10157
million contract by Methax, a unit of Grupo Galileo, for a provision of engineering,

procurement, and construction (EPC) services, which also includes Wartsila 34SG
gas engines for a 40 MW smart power generation plant in Mendoza. The contract is
2010 2011 2012 2013 2014 2015 2016 2017
being seen as a measure to counter the energy shortage.
Source: IRENA
• In addition, the country is also actively promoting investments and have started to • In October 2017, the country’s gas transporter, TGS announced an investment of USD
partner with the foreign companies to develop its unconventional shale gas reserves 800 million for the construction of natural gas pipelines and gas treatment plant in
and boost the natural gas production. In July 2017, Argentina’s state-run oil firm YPF Argentina’s Vaca Muerta shale fields, to boost the country’s natural gas output. This
SA, France’s Total SA, Wintershall Energia SA, and BP unit Pan American Energy may be utilized to counter the country’s shortage of natural gas and the power crisis.
LLC announced a USD 1.15 billion joint investment to increase shale gas energy With the improvement of natural gas supply and the country’s continuous push toward
and power activities. gas-based power generation, the demand for gas engines is expected to remain high in
the country.
• The government further plans to attract private investments for the development and
• However, the announcement of a 32% average increase in the nationwide natural gas
strengthening of the natural gas based national grid, as well as to strengthen the
prices in March 2018, which is an additional price hike to the already announced 45%
associated natural gas supply infrastructure, such as pipelines and gas processing
prices hike in December 2017, is expected to result in the hike of electricity generated
plants.
through natural gas, and may result in more favorable conditions for the uptake of
renewable-based electricity generation.
• Owing to the vast availability of the natural gas, Argentina has been a pioneer Number of Natural Gas Vehicles (NGV), Argentina, 2000-2016
country in the deployment of the natural gas vehicles (NGVs) in the region. The
2,140,000 2,185,000
country has been actively using compressed natural gas (CNG) based vehicles.
1,745,677
Although the rate of deployment has slowed down over the last few years, as
the distributors are refraining themselves from promoting the NGVs, owing to 1,288,462
the natural gas supply shortage, the conditions look set to improve.
462,186
• With the expected improvement in the fortunes of Argentina’s gas supply,
primilarly led by the development of the giant Vaca Muerta shale play, coupled
with the rising oil prices, the country is expected to witness the greater sales of
2000 2004 2008 2012 2016
NGVs in the coming years. Source: IANGV Global
Number of Natural Gas Vehicles (NGV) Fueling Station,

• In May 2018, country’s leading natural gas distributor, Natural Fenosa and
Argentina, 2000-2016
Metrogas, announced the launch of “Switch to Gas” campaign, in a bid to
promote the NGVs in the country and the various advantageous offered by it. 2,014
1,801 1,902
Furthermore, in September 2018, Scania Argentina presented the country’s first
fleet of trucks powered by LNG, that are fitted with an engine of 9 liters and 5
830 896
cylinders, capable of delivering a power 340 hp and a torque of 1600 Nm.
• With the increasing deployment of NGVs, the demand for the gas engine is
expected to remain high in the coming years. However, with the rising share of
Natural Gas Vehicles Fueling Stations
renewables and a slow-but-steady pace of deployment of electric vehicles, 2000 2004 2008 2012 2016
Source: IANGV Global
coupled with high natural gas prices, are expected to affect the demand for the
gas engines.

Argentina, 2010-2017 48.35 48.48
46.23 46.65
45.72 45.78
43.96
42.20
39.00
37.72 37.28 37.15
36.69
35.49
34.56 34.49
Source: BP Stats 2010 2011 2012 2013 2014 2015 2016 2017

REST OF SOUTH AMERICA Current GDP and Forecast in USD billion, Venezuela, 2010-
• In the past few years, the region has remained subject to constant economic and 2023
334.07
331.46
294.28
political instability, including severe corruption charges, violence between
242.60
236.12
234.40
government and Revolutionary Army Forces of Colombia (FARC-EP),
212.35
210.08
In USD billion
socioeconomic and political crisis in Venezuela, amongst others.
• However, with the expected improvement in the economic and political condition
96.33
87.01
81.35
77.89
75.04
68.22
in several countries of the region, such as Colombia in the coming years, the
industrial growth is expected to remain high, resulting in an increased demand
for electricity. In a bid to ensure sufficient and sustainable electricity 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
consumption, several of the industrial consumers in the country are preferring
Source: IMF
gas engine-based power generation. • However, with the rising population, expected increase in industrial and
• In Sep 2015, General Electric (GE) successfully demonstrated the feasibility of economic growth, primary energy consumption is expected to increase across
industrial-scale electricity generation using gas engines at the largest LPG several countries, such as Colombia, Peru, Bolivia, and in turn, the need for
storage facility in Colombia owned by Colgas. The installation is in line with the strengthening of gas pipeline infrastructure to ensure greater share of natural
government’s policy of strengthening natural gas infrastructure to promote gas in the energy mix.
usage of LPG in Colombia’s electricity and transportation industries. • In May 2018, the government of Peru announced its plans to promote
investments in infrastructure development projects, including the resumption of
• Despite large reserves of natural gas, the lack of associated pipeline system or
the natural gas pipeline projects, to boost domestic gas supply.
the delay in the implementation of the announced projects has resulted in the
delay in the greater deployment of the natural gas engines across sectors. Lack • China’s CNPC has already announced an investment of USD 4 billion for the
of capital support is one of the main reasons for the delay. development of Block 58, in Camisea (Peru), for the production of 360 million
cubic feet per day (MMcf/d) of gas.
• In addition, as the region is considered rich in natural gas (NG) reserves, several countries Consumption of Electricity in TWh, Colombia, 2010-2017
of the region, such as Colombia, Bolivia, and Peru, have been actively promoting the use of
natural gas vehicles (NGVs). The use of NGVs in Colombia dates back to 1984 and has 54 54 54
been witnessing a rapid increase in NGV deployment, since then. In a country where 52
51
transportation accounts for 18% of greenhouse gas emissions and on average 300,000
In TWh
49 49
new vehicles are brought every year, the government and several industry associations are
planning to further actively promote the use of NGVs, in the coming year. 46
• Thus, factors, such as the increasing deployment of NGVs, NG-based industrial power
generation, along with slow-but-steady deployment of CHPs and expected rise in domestic
fertilizer production is expected to supplement the demand for gas engines in the region,
Electricity Consumption
over the coming years. 2010 2011 2012 2013 2014 2015 2016 2017
Consumption of Electricity in TWh, Chile, 2010-2017 Consumption of Electricity in TWh, Venezuela, 2010-2017
68 70 71
66 67 99
63 90
55 58 84 87
80
73 70
66
In TWh
In TWh
Electricity Consumption Electricity Consumption
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017
Source: Mordor Intelligence Analysis Source: Mordor Intelligence Analysis

Primary Energy Consumption Share (%), by Fuel type, Primary Energy Consumption Share (%), by Fuel type,
Colombia, 2017 Venezuela, 2017
0.94% 0.0034%
23.39%
30.43% Oil 32.62% Oil
39.18%
Natural Gas 0.35% Natural Gas
Coal Coal
Hydroelectric Hydroelectric
9.26%
Renewables 43.63% Renewables
20.18%
Source: BP Stats Source: BP Stats
Primary Energy Consumption Share (%), by Fuel type, Primary Energy Consumption Share (%), by Fuel type,
Peru, 2017 Chile, 2017
2.14% 7.95%
25.10% Oil 13.19% Oil
46.60% Natural Gas 47.87% Natural Gas

Coal Coal
17.54%
3.77% Hydroelectric Hydroelectric
Renewables Renewables
22.39%
13.46%

Number of Natural Gas Vehicles (NGV), Bolivia, 2000-2016 Number of Natural Gas Vehicles (NGV), Colombia, 2000-2016
556,183
300,000
254,722
380,000
280,340
99,657
15,486 37,467
4,860 6,759
Natural Gas Vehicles Fueling Stations Natural Gas Vehicles Fueling Stations
2000 2004 2008 2012 2016 2000 2004 2008 2012 2016
Source: IANGV Global Source: IANGV Global
Number of Natural Gas Vehicles (NGV), Peru, 2000-2016 Number of Natural Gas Vehicles (NGV), Venezuela*, 2000-2016
233,772 226,100
185,073
152,734
90,000
57,532
44,146
0 0
Natural Gas Vehicles Fueling Stations Natural Gas Vehicles Fueling Stations
2000 2004 2008 2012 2016 2000 2004 2008 2012 2016
Source: IANGV Global *Data for 2008 is not available Source: IANGV Global

Total Renewable Energy Installation in megawatts (MW), Total Renewable Energy Installation in megawatts (MW),
Venezuela, 2010-2017 Colombia, 2010-2017
15,192 15192 15192 11879 12037
11,757
11,154
9914 9918 9980 10081
14932 14933
In MW
In MW
14625 14655 14655
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017
Source: IRENA Source: IRENA
Total Renewable Energy Installation in megawatts (MW), Total Renewable Energy Installation in megawatts (MW), Peru,
Chile, 2010-2017 2010-2017
10821
10139 5684 5768
8,329 8,502 4,662
7719
6719 7085 4,064
6175 3675 3812
In MW
3522
In MW
3504
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017


Colombia, 2010-2017
13.22
12.33
11.53 11.61 11.38 11.21
10.84 10.88 10.65
10.55 10.48
10.14 10.01
9.47
8.75 8.51
Source: BP Stats 2010 2011 2012 2013 2014 2015 2016 2017


Chile, 2010-2017
1.35
1.27 1.26
1.20 1.22
1.15
1.11
0.71 0.73
0.65 0.68 0.65
0.58 0.57
0.52
0.47
Source: BP Stats 2010 2011 2012 2013 2014 2015 2016 2017

117
8.5 MIDDLE EAST & AFRICA

8.5 MIDDLE EAST & AFRICA 118
UNITED ARAB EMIRATES Gas Engine Market: Size and Demand Forecast in USD billion,
• Owing to rising population, infrastructure development on the back of Expo Middle East & Africa, 2017-2023
2020, and growing industrialization activities, the demand for electricity
0.65
consumption has maintained 5% of average annual growth rate over the past 0.62
0.57
five years and is expected to maintain a similar growth rate of 5-6% until 2021. 0.54
0.51
In USD billion
0.48
• Natural gas is expected to overtake oil in the Middle Eastern region to become 0.45
the dominant fuel, accounting for around 60% of consumption by 2040,

underlining regional efforts to switch to the cleaner source to free up more crude
for export.
2017 (e) 2018 (f) 2019 (f) 2020 (f) 2021 (f) 2022 (f) 2023 (f)
• The United Arab Emirates has the seventh largest proven gas reserves in the
Primary Energy Consumption Share (%), by Fuel type, United
world. The rapid increase in natural gas demand for power generation and Arab Emirates, 2017
industrial development in the past decades has put pressure on the natural gas 1.47%
0.09%
supply in the United Arab Emirates.
• The share of natural gas in the country energy mix has been growing over the
Oil
last decade. The natural gas production in the country has increased to 60.4 41.36%
Natural Gas
billion cubic metres (BCM) in 2017 from 50.0 BCM in 2010. Natural gas plays a
Coal
57.08%
key role in UAE’S energy mix and accounts for approximately 57% of the total Renewables
primary energy mix in the country
• The consumption of natural gas in the country exceeds the production capacity.
Source: BP Stats
Natural Gas consumption increased to 72.2 bcm in 2017 from 59.3 bcm in 2010.


72.50 72.20
United Arab Emirates, 2010-2017 71.00
63.90 64.40
63.40
61.60
59.60 60.40
58.70 59.30
52.90 53.20 52.90

51.00
50.00
2010 2011 2012 2013 2014 2015 2016 2017

Source: BP Stats
• As part of its short and medium-term goal the country is actively promoting natural gas usage across power generation, industrial, and transportation sector, in a bid
to counter rising pollution levels and reduce GHG emission, which is expected to supplement the demand for natural gas based engines in the country. The
initiatives, such as 'Dubai Sustainable Energy Plan to 2021' actively promotes the use of natural gas across sectors.
• The country's natural gas production has been slowly declining and with ongoing geopolitical tensions with Qatar, there is an increasing need to boost domestic gas
supply. The government plans to fast-track development of domestic natural gas fields and associated pipeline & gas processing infrastructure, which is expected to
supplement the case for the use of gas engines in the coming years.
• In Jan 2018, The Abu Dhabi National Oil Company (ADNOC) awarded a Front End Engineering Design (FEED) contract for the company’s giant ultra-sour gas
project in the northwest area – consisting of the Hail, Ghasha and Dalma fields – to UK’s Bechtel and UAE’s TechnipFMC. This project is expected to meet 20% of
the UAE’s gas demand in the coming years.

• Further, the UAE government is promoting the conversion of fossil fuel based Number of Natural Gas Vehicles (NGV), United Arab Emirates,
vehicles to CNG based. As of December, 2017, more than 6,000 vehicles in Abu 2008-2018
9220
Dhabi have been switched from fossil fuels to CNG since 2010. The Emirates
Transport Corporation, a Federal entity, responsible for converting petrol and
diesel vehicles to CNG, started converting the vehicle to CNG in August, 2010 5,250
and is now gradually expanding its reach to other northern Emirates.

2,678
• Similarly, in April, 2018, Emirates Transport Corporation also launched the first
305
natural gas forklift truck, which emits 25% fewer carbon dioxide emissions than
other gas-powered vehicles. This modified forklift truck uses greener CNG instead 2008 2012 2016 2018
of LPG to power the truck's engine. Through the launch of this forklift, the Source: IANGV Global
Emirates Transport Corporation expects a “quantum leap” in the use of natural Consumption of Electricity in TWh, United Arab Emirates,
gas to power industrial vehicles and heavy plant machinery in the United Arab 2010-2017 119 119
Emirates. Since 2010, there has been no increase in prices of CNG. It’s still being 111
traded at AED 1.4 per cubic meter of CNG, while petrol prices crossed AED 2 per
101
liter.
In TWh
92
88
• In a bid to ensure sustained electricity supply, the industrial sector of the country 84
86
has been actively deploying gas engine based power generation systems. In
2011, Wärtsilä deployed the country's first gas engine based 39 MW plant
powered by four 20-cylinder Wärtsilä 34SG generating sets. Several other similar
2010 2011 2012 2013 2014 2015 2016 2017
contracts have been made since then, for supplying efficient power to the
industries.
• As of 2015, General Electric (GE) has already performed feasibility check for capturing Electricity Generation from Renewable Sources in Terawatt-
AG and minimizing gas flaring by utilizing NG engines for on-site energy generation. The Hours, UAE, 2010-2017.
utilization of such systems in the coming years is expected to further supplement the 92.90
77.10 77.80
demand for gas engines in the country, as gas flaring remains a common phenomenon
in the country. 58.60
In TWH
48.50
• According to the Gulf Petrochemicals & Chemicals Association, United Arab Emirates 35.90
29.50
accounts for the third largest share of fertilizer production in the GCC and has witnessed 22.60
a production growth of over 50% in the past ten years. Further, the country also plans to
venture into the manufacturing of specialty fertilizers. As gas engines are being
2010 2011 2012 2013 2014 2015 2016 2017
increasingly used across the world for power supply to these fertilizer manufacturing
Source: IRENA
plants, the demand for gas engine is expected to remain high.
• As natural gas currently accounts for 56% of primary energy share, the reduced
• The United Arab Emirates is home to 20 of the world’s leading ports and remains home
usage of natural gas through this initiative is expected to hinder the growth of gas
to a large number of marine ships, including large supply vessels and small boats for
fuelled engine in the coming years.
recreational purposes. As per Maritime Vision 2030, the country aims to become one of
• Moreover, in October, 2018, Dubai Electricity and Water Authority
the world’s top shipping countries over the next decade. With stringent 0.5% sulfur
(DEWA) announced its completion of its second phase of green charger initiative.
emission norms coming into effect by 2020, the demand for gas engines is expected to
Under this plan, DEWA installed 100 EV charging stations across Dubai making the
increase from the maritime sector, particularly from LNG fuelled ships.
total number of charging in the city to 200.
• However, in 2017, the government introduced UAE Energy Plan 2050, according to
• However, electric vehicles are expected to be implemented in the country on the
which the contribution of clean energy in the total energy mix will increase from 25% to
longer run, which offers growth opportunity for gas fueled vehicles in the near future.
50% by 2050 and carbon footprint of power generation will reduce by 70%, thus saving
Furthermore, the improving domestic natural gas supply and improving pipeline
AED 700 billion by 2050. Through this policy, the government aims to include 44% clean
infrastructure, are also expected to result in greater uptake of gas engine based
energy majorly solar and wind, 38% gas, 12% clean coal, and 6% nuclear in its primary
vehicles in the country.
energy mix.
SAUDI ARABIA Primary Energy Consumption Share (%), by Fuel type,

• Saudi Arabia holds 16% of the world’s proven oil reserves. Owing to heavily Saudi Arabia, 2017
0.04%
subsidized domestic oil prices, liquid petroleum accounts for approximately 65%
of its primary energy mix and around 60% of the total installed electricity
capacity, as of 2017.
35.71%
Oil
• However, electricity demand in the country has increased with an average peak
Natural Gas
demand growth rate of 7% - 9% over the past decade and is expected to 64.26% Coal
maintain similar growth in the coming years, primarily driven by increasing
population, demand for desalination activities, growth in construction projects,
and rapid urbanization and industrialization activities. Source: BP Stats
• To meet the electricity demand, the country is estimated to increase its power Consumption of Electricity in TWh, Saudi Arabia, 2010-2017
generation capacity from 77 GW in 2014 to 156 GW by 2040. It includes 311

305 307
installing 5 GW capacity and distribution infrastructure every year. To achieve
283
the aim, the government is planning to invest USD 5 billion in electricity
In TWh
generation and natural gas is expected to play a significant role in this 257
upgradation. 241
220
• Therefore, the government of Saudi Arabia is encouraging more use of the gas 212
and renewables to replace oil in power generation, as the gas is more
environment-friendly compared to liquid fossil fuel and reducing the usage of oil
2010 2011 2012 2013 2014 2015 2016 2017
allows the country to export more oil. Source: Mordor Intelligence Analysis


Saudi Arabia, 2010-2017
111.40 111.40
105.30 105.30
99.20 99.20
97.30 97.30
94.40 95.00 94.40 95.00
87.60 87.60
83.30 83.30
Source: BP Stats 2010 2011 2012 2013 2014 2015 2016 2017

Electricity Generation Share (%), by Fuel type,

• In a bid to ensure sustainable and efficient future, the country has been
Saudi Arabia, 2017
actively promoting the use of natural gas in its domestic energy mix. This is 0.03%
evident from the fact that despite of higher oil-based electrical power
generation plant, natural gas accounted for approximately 60% of the total
electricity generated in 2017. Oil
41.06%
Natural Gas
• In February, 2018, the government announced that it plans to double the
58.92% Renewables
domestic natural gas output in the next 10 years and ensure sufficient and
reliable pipeline infrastructure to ensure adequate availability of natural gas.
• Although utilities are investing billions to ensure that power supply keeps up Source: BP Stats
with escalating demand in the country, the rate of development has left a gap
Average Annual Peak Load in MW, Saudi Arabia, 2008-2016
for generator firms to power facilities which have not yet been connected, or 62,260 60,828
which may still be under construction, which in turn, is expected to offer 56,547
51,939 53,864
48,367
opportunity for the growth of gas engine based distributed power generation. 45,661
41,200
Improving domestic gas infrastructure is expected to further supplement the 38,000
In MW
case.
• Moreover, in a bid to curb GHGs emission, the potential for the use of NGVs is
expected to remain high in the country, in line to regional neighbors, such as
United Arab Emirates. However, the country has been favoring deployment of
more of electric vehicles and has not witnessed any favorable opportunity for 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Electricity & Regulatory Cogeneration Authority
NGVs or distributed gas engine based power generation.
Total Renewable Energy Installation in megawatts (MW),

• However, considering the climate change, most of the major companies in the
Saudi Arabia, 2010-2017
country are paying attention to the adoption of renewables in the country's 92
energy mix and are investing in the business of electric vehicles. 74 74
• In a bid to move forward toward the Saudi 2030 Vision, the Saudi Electricity
In MW
Company has signed an agreement with the Japanese firms Tokyo Electric
Power Company, Tecaoca Coco Energy Solutions Company, and Nissan Motor 22 24
14
Company to implement an electric vehicle pilot project.
2 3
• Similarly, in September, 2018, the country invested USD 1 billion in Lucid 2010 2011 2012 2013 2014 2015 2016 2017
Motors for the manufacturing of its first electric vehicle. Source: IRENA
• Such efforts of the country indicate its increasing interest toward electric vehicle adoption. The demand for gas engines in the country is about to increase, as the
number of electric vehicles being deployed in the country is rising.
• According to IEA, there will be 50 million electric vehicles on the road in the country by 2025 and 300 million by 2040, from close to 2 million now. This is expected to
cut domestic fuel demand in the country from fuel based vehicles, which in turn expected to prohibit the demand for gas engine in the country over the forecast
period. Furthermore, the falling cost of associated equipment, such as battery, which has witnessed a fall of 79% from 2010 to 2017, is expected to result in
reduction in the cost of electric vehicles and increase its uptake in the country, during the forecast period. This in turn, is expected to result in a reduced demand for
NGVs in the country.

QATAR Primary Energy Consumption Share (%), by Fuel type,

• At the end of 2017, Qatar holds the largest natural gas reserves of 24.9 trillion Qatar, 2017
cubic meters (TCM) of gas in the Middle East & Africa region and also accounts 0.09%
for the largest producer of natural gas in the region. As a result, the income from
the oil and gas industries has enabled Qatar to become one of the world’s richest 24.56%
countries, on per capita basis, with a modern and well-developed economic Oil
infrastructure. Natural Gas
Renewables
75.35%
• Additionally, the country has one of the lowest natural gas production costs in the
world, which in turn enables the country to operate some of the most cost-effective
LNG and GTL facilities, globally. Source: BP Stats
• Amidst the geo-political Persian Gulf crisis with neighboring countries, such as Electricity Generation in TWh, Qatar, 2010-2017
Saudi Arabia and United Arab Emirates, the government plans to further boost the
domestic natural gas output in the country. 43.8
41.5 42.3
• In 2013, the government announced its plan to take advantage of the vast
39
In TWh
availability of natural gas to promote natural gas based vehicles in the country, to
35 35
ensure sustainable energy, in future. Further, in April, 2012, Qatar Petroleum and
31
Mowasalat signed an MOU to jointly evaluate the feasibility of introducing CNG to 28
run public transport vehicles. Two buses were specially acquired and deployed by
Mowasalat as part of the CNG pilot scheme. The country has been actively Electricity Consumption
2010 2011 2012 2013 2014 2015 2016 2017
promoting NGVs since then, which in turn, is expected to result in an increased
demand for gas engines in the country.

Qatar, 2010-2017
175.24 177.01 175.71

167.68 169.09
162.55
150.36
123.87
44.07 47.39
43.09
38.84
33.72 34.99
24.75 27.34
Source: BP Stats 2010 2011 2012 2013 2014 2015 2016 2017

• Additionally, the country's domestic power sector is expected to grow at a Total Renewable Energy Installation in megawatts (MW),
significant level over the next few years, on account of strong government Qatar, 2010-2017
663
investment in new infrastructure and the effective utilization of public-private
partnerships to attract further investments. However, the country's power sector 482
can be considered as in transition and is aging, often resulting in power outages.
In MW
312
• In a bid to promote sufficient electricity supply, the opportunity for the use of 264
natural gas engine based CHP for heating and distributed power solution remains
39 39 40
high in the country. Furthermore, the government has also been actively promoting 0 0
solid waste management by converting the waste into gases and utilizing it for 2010 2011 2012 2013 2014 2015 2016 2017
electricity generation. These projects are expected to result in an increased Source: IRENA
demand for gas engines. LNG Exports in billion cubic meters, by Major Countries, Global, 2017
• In addition, Qatar is strategically located halfway between Europe and Asia France 1
through the marine route and remains as the largest LNG exporter across the Norway 5.8
UAE 7.4
world, which offers extreme potential of growth in demand for gas engines from the Trinidad & Tobago 13.4
marine sector, as IMO's strict regulation of 0.5% sulfur emission are set to be Russia 15.5
Algeria 16.6
implemented strictly from January, 2020. US 17.4
Indonesia 21.7
• As a result of huge natural gas reserves and a robust natural gas associated
Australia 75.9
infrastructure, there exists an excellent opportunity for growth of gas engines Qatar 103.4
0 20 40 60 80 100 120
usage in the country, particularly for NGVs, marine, and CHP based power
generation. Source: IGU

Primary Energy Consumption Share (%), by Fuel Type,

SOUTH AFRICA
South Africa, 2017
• South Africa has the world's ninth-largest amount of recoverable coal reserves
Nuclear Energy
Hydroelectric
of approximately 30.2 billion tons. Coal accounted for approximately 88% of the 2.98%
0.17%
total electricity generated in 2017 and approximately 70% of the total primary Renewables
1.66%
energy mix in 2017. However, as a result of heavy emissions from coal-fired
Oil
power plants, South Africa remains as the 13th largest emitters of CO2, across 23.86%
the world.
Coal
68.10%
• Furthermore, increasing economic growth, increased demand for electricity, and Natural Gas
3.23%
a lack of investment in ageing power plants have resulted in the shortages in
Source: BP Stats
the electricity supply and several power outages in the past few years, and in
turn, have supplemented the demand for energy diversification in the country. Electricity Consumption in TWh, South Africa, 2010-2017
• South Africa is one of the leading emitters of energy-related carbon dioxide 262.5
(CO2), ranking 15th globally in 2015. According to the country’s Intended 259.6
257.9
National Determined Contribution, submitted as part of the Paris Agreement, 256.1
254.8 255.1
In TWh
CO2 emissions are expected to decline by 2035. 252.7
250.1
• In a bid to reduce these emissions, South Africa is planning to diversify its
energy portfolio, replacing coal with lower CO2-emitting fuels, such as natural
gas and renewable sources.
2010 2011 2012 2013 2014 2015 2016 2017
Source: Stats SA


South Africa, 2007-2017
4.6
4.5
4.40
4.4
4.30 4.30
4.10 4.10
3.90
3.80
3.30
Source: BP Stats Natural Gas Consumption

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
• South Africa’s consumption capacity exceeds its production capacity. The country has been importing gas from its neighbors, including Mozambique. South Africa
already has a 25 year gas trade cooperation agreement with Mozambique. This cooperation is guided by an interest in exploiting oil and gas opportunities within the
region, as well as globally.
• The South African Government has instated various policies and programmes aimed at increasing the penetration of gas in South Africa's energy economy. The
department of energy also aims at publishing a gas utilization master plan to serve as a framework for establishing the infrastructure and incentives necessary to
realize this objective.
• In support of the vision for the South Africa’s gas programme, the government is actively promoting gas in the country. Country's Department of Energy has started
developing a Gas-to-Power IPP procurement programme, through its Independent Power Producer Office (IPPO). This programme is expected to serve as an
anchor for the gas market and infrastructure development in South Africa. The Department anticipates that the introduction of large-scale gas in the South African
economy may lower the country’s carbon emissions not just from electricity generation, but also from the energy sector as a whole, including the transport sector.

• In a bid to counter the power outage, the government has actively promoted Number of Natural Gas Vehicles (NGV), South Africa,
gas-based combined heat and power (CHP) solutions across the country, for 2008-2016
300 300
distributed power generation.
• The Sasol Gas Engine Power Plant, located south of Johannesburg, is

powered by 18 Wartsila 34SG gas-fired generating sets, with a combined
operating capacity of 140 MW. It remains as the largest power plant that runs
on gas engines in the Africa. 22
• A similar deployment of gas engine fired CHP solution has increased in the
2008 2012 2016
recent years, which, in turn, is expected to supplement the demand for gas Source: IANGV Global
engines in the country.
• Furthermore, cities in South Africa, are gradually adopting various sustainable solutions and technologies to enhance their public transport systems. This country
also saw an increasing number of CNG buses used in public transport. Moreover, in 2015, the city of Johannesburg launched its first batch of 70 dual-fuel CNG
buses.
• Similarly, in 2016, around 40 dual-fuel CNG buses were dedicated to public transport for the Tshwane bus rapid transit (BRT) service. Following the same trend,
Megabus, a Unitrans subsidiary, launched a trial of 10 CNG buses in the Free State province. The trial is expected to run for another three years.
• Although, the current infrastructure to support advanced transport solutions in the country is limited, South Africa is still making strides to improving the system, with
metros, such as Johannesburg, Pretoria, and Cape Town, as well as the Free State province already using CNG in public transport. Such efforts are expected to
increase in the near future, paving way for gas engine market to flourish in the country.

Total Renewable Energy Generation in Terawatt Hours, South Africa, 2010-2017
11559
10980 11,020 11,021 11085

10908
10760
In MW
10157
2010 2011 2012 2013 2014 2015 2016 2017

Source: IRENA
• However, owing to the environmental benefits offering, the South African government has identified installation of large-scale renewables, particularly solar and wind
energy to replace aging coal-fired power stations, which is expected to hinder the demand for gas engines in the county
• Similarly, as part of the South African Renewables initiative, the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) was introduced
in 2015, originally aimed to procure 3,725 MW of renewable energy capacity by 2016 and an additional 3,200 MW to be added by 2020, primarily from wind and
solar, through bidding rounds, and has resulted in the increase of several solar projects in the country. Declining cost of solar and wind power is expected to drive
the adoption and be competitive to gas fired power plants, hence, posing a threat to the demand of gas engines in the country.

REST OF MIDDLE EAST AND AFRICA

Electricity Generation Mix Share (%), by Fuel Type, Iran, 2016 and 2040
• Owing to factors, such as population increase, economic growth, increased
urbanization and industrialization activities, and improvements in the level of
1%
living standards, due to higher urbanization, the Middle East & Africa (MEA) is 6% Gas Gas
1%
expected to witness a continual increase in the consumption for electricity. Oil 2%
1% Oil
• According to Gas Exporting Countries Forum (GECF), the electricity demand in Nuclear 10% Nuclear
the Middle Eastern region grew substantially from 472 TWh in 2000 to 1132 TWh
22% Hydro 3%
Hydro
in 2016, indicating an average growth rate of 5.6% per annum. Furthermore, the 13%
2016 Others 2040
demand for electricity is expected to double reaching 2419 TWh by 2040 at an Coal
70% 71%
annual growth rate of 3.2% per annum. Renewables
Source: GECF
• However, on the flip side, the electricity supply networks are either aging or the
rate of electrification remains low in several countries of Africa, often resulting in • Countries, such as Iran, which witnessed an increase in electricity demand of
power outages. As a result, several countries across the region are promoting 137% between 2000 and 2016, rising from 121 TWh - 286 TWh, plans to further
the use of gas engine-based combined heat and power (CHP) solution to ensure integrate more of natural gas, both into its electricity generation mix and into its
sustainable and reliable power supply. primary energy share, in the coming years.
• In July 2018, MAN Energy Solutions secured a contract from Oman LNG for the • The Iranian government has been actively promoting natural gas vehicles
supply of nine gas engines, with a cumulative capacity of 120 MW of power to (NGVs). As of Aug 2017, the share of CNG among the various fuels for
an existing LNG facility of Oman LNG. The gas engines may replace the transportation is estimated to be around 21% and 23%, and government aims to
existing gas turbines and are capable of using a variety of differing gas further extend it to 45-50%, by offering favorable incentives, such as reduction in
compositions. Similar contracts are being witnessed in other countries, such as natural gas prices and improving associated infrastructure. Similar trend is also
Egypt, which, in turn, are expected to result in increased demand for gas observed across countries, such as Egypt and Nigeria, which in turn, is
engines. expected to result in an increased demand for gas engines.

• In addition, as the region is considered rich in natural gas (NG) reserves, Electricity Consumption in TWh, Algeria, 2010-2017
several countries of the region, such as Iran, Iraq, Algeria, and Nigeria have
64
been actively promoting the development of natural gas production and 58 60
53
associated infrastructure, which is expected to offer potential growth opportunity 49
46
for gas engines on the longer run. 41
37
In TWh
• The African region is home to countries with lowest electrification rate with
countries, such as Chad having only 8.83% of population with access to
electricity in 2016, as per World Bank. However, the region has been promoting
more of renewables-based electricity generation to meet rising electricity
2010 2011 2012 2013 2014 2015 2016 2017
demand, which in turn, is expected to affect gas engines demand in the region.
Electricity Consumption in TWh, Iran, 2010-2017 Electricity Consumption in TWh, Egypt, 2010-2017
160 165
148 154
243 141
224 226 138 138
207 214 124
202
188 191
In TWh
In TWh
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017
Source: Mordor Intelligence Analysis Source: Mordor Intelligence Analysis

Primary Energy Consumption Share (%), by Fuel Type, Primary Energy Consumption Share (%), by Fuel Type,
Iran, 2017 1.00% Iraq, 2017
1.35% 0.05% 0.03%
0.34% 0.58% 0.00% 0.00%
Oil 20.89% Oil

30.73%
Natural Gas Natural Gas
Coal Coal
Nuclear Energy Nuclear Energy
66.96% Hydroelectric 78.09% Hydroelectric
Primary Energy Consumption Share (%), by Fuel Type, Primary Energy Consumption Share (%), by Fuel Type,
Algeria, 2017 Egypt, 2017
0.22% 0.67%
0.09% 0.00% 0.02% 3.30%
0.00%
0.18%
Oil Oil
36.76% Natural Gas Natural Gas
43.32%
Coal Coal
Nuclear Energy 52.53% Nuclear Energy
62.90%
Hydroelectric Hydroelectric

Total Renewable Energy Installation in megawatts (MW), Total Renewable Energy Installation in megawatts (MW), Iran,
Algeria, 2010-2017 2010-2017
663
11824 12037
10,954 11,452
9858 10380
482
8588 8850
In MW
In MW
312
253 253 253 253 264
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017
Total Renewable Energy Installation in megawatts (MW), Iraq, Total Renewable Energy Installation in megawatts (MW),
2010-2017 Nigeria, 2010-2017
2274 2274 2,311 2311 2311 2042 2042 2,042 2,042 2042 2042
1865 1895 1,902
In MW
In MW
1941 1941
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017


Iran, 2010-2017
223.89
214.44
203.16 201.35
191.42 191.91
183.05 180.91
163.67 164.28 159.76 159.09 160.43
157.46
150.08 150.58
Source: BP Stats 2010 2011 2012 2013 2014 2015 2016 2017


Algeria, 2010-2017
91.39 91.25
80.17 81.41
79.60 78.44 79.34
77.40
37.92 38.60 38.89

36.09
32.12
29.87
25.33 26.80
Source: BP Stats 2010 2011 2012 2013 2014 2015 2016 2017

139
9.1 Caterpillar Inc.
9.2 Cummins Inc.
9.3 Siemens AG
9.4 Rolls-Royce Holdings PLC
9.5 Wartsila Oyj Abp
9.6 Mitsubishi Heavy Industries Ltd

9. KEY COMPANY PROFILES 9.7 Hyundai Heavy Industries Co. Ltd
9.8 Man SE
9.9 General Electric Company
9.10 Kawasaki Heavy Industries Ltd
9.11 JFE Engineering Corporation
9.12 Liebherr Group

9.1 CATERPILLAR INC. – COMPANY OVERVIEW 140
Introduction: Caterpillar Inc. is the global leading manufacturer of construction and mining equipment, diesel and natural gas
engines, industrial gas turbines, and diesel-electric locomotives. It is also a leading financial services provider through
Caterpillar Financial Services. Caterpillar principally operates through its three primary business segments – Construction
Industries, Resource Industries, and Energy and Transportation. The company serves in 192 countries across the world with
the manufacturing and distribution of more than 300 products. Its manufacturing, marketing, logistics, service, R&D and
related facilities in addition to its dealer locations adds to more than 500 locations globally. Caterpillar has been making
Founded in 1925
sustainable progress for more than 90 years on every continent. The company is renowned for producing the finest gas
engines to various industries including construction, agriculture, mining, and waste industry among others. These gas
engines are being sold through the power system segment. Illinois,
HQ United States
Financial Overview
Revenue in USD billion, 2015-2017 Operating Profit in USD billion, 2015-2017 Operations: North America.
Asia-Pacific, Middle East &
Africa, Europe, South America
47.00 45.50 4.40
38.50 3.80 ~ 98,400 Employees
In USD billion
In USD billion
Revenue (2017)
USD 45.50 billion
0.50
+1 (309) 675-2337
2015 2016 2017 2015 2016 2017 www.caterpillar.com

Source: Annual Report

9.1 CATERPILLAR INC. – BUSINESS OVERVIEW 141
Revenue Share (%), by

Operating Business Segment
Business Segment, 2017
Construction Energy and

Resource Industries Financial Products 6.2%
Industries Transportation 15.9%
39.1%
• Construction Industries – The Construction Industries segment is majorly responsible for the supply of machinery in
infrastructure, forestry and building construction. The majority of machine sales in this segment are made for heavy and
general construction, rental, quarry and mining. 38.8%
• Resource Industries – This segment deals in mining automation, with the autonomous fleet of haul trucks and proven
solutions for drills, dozers, underground loaders and longwall systems.
Energy and Transportation
• Energy and Transportation – The Energy and Transportation (E&T) segment is responsible to move goods by sea and
Construction Industries |
rail and also powers buildings and equipment.
Resource Industries
• Financial Products – Through this segment, the company provides financing and related services. Financial Products

9.1 CATERPILLAR INC. – RELEVANT PRODUCTS 142
SERIES G3300 G3400 G3500 G3600
G3406 G3408C G3412C G3508B G3512B G3516B G3520B G3606 G3608 G3612 G3616
G3304 G3306
(TA) LE LE LE LE LE LE (TA) (TA) (TA) (TA)
121 x 121 x 170 x 170 x 170 x 300 x 300 x 300 x 300 x

Bore x 152 mm 152 mm 137 x 137 x 137 x 170 x 190 mm 190 mm 190 mm 300 mm 300 mm 300 mm 300 mm
Stroke (4.75 x (4.75 x 165 mm 152 mm. 152 mm 190 mm (6.7 x 7.5 (6.7 x 7.5 (6.7 x 7.5 (11.8 x (11.8 x (11.8 x (11.8 x
6.0 in) 6.0 in) in) in). in) 11.8 in) 11.8 in) 11.8 in) 11.8 in)
18 liters 27 liters 127.2 169.6 254.4 339.2

Displace 7.0 liters 10.5 liters 14 liters 34.5 liters 51.8 liters 69.0 liters 86.3 liters
(1099 in3 (1649 in3 liters (37 liters (10 liters (15 liters (20
ment (425 in3 ) (638 in3) (893 in3) (2105 in3 (3158 in3) (4211 in3 (5263 in3)
). ) 762 in3) 350 in3) 528 in3) 698 in3)
Ship 15 640 19 000 25 084 29 892

757 kg 948 kg 1362 kg 2245 kg 2141 kg 3941 kg 4950 kg 8401 kg 11 168 kg
Weight kg kg kg kg

9.1 CATERPILLAR INC. – RECENT DEVELOPMENTS 143
Nov 2017
Caterpillar has announced its new Cat G3516

TA gas engine, aiming to provide high fuel
efficiency and low emission output for the
customers. Through this product, the company
aims, in order to meet 0.15 g/bhp per hour NOx
emissions when configured with an
appropriately sized customer supplied three-
way catalyst.

9.1 CATERPILLAR INC. – ANALYST VIEW 144
The company strives to introduce new products, and develop its digital capabilities. The revenue of the company increased by 18% in 2017 and
the operating profit also increased by 780% in the same year. Taking the advantage of the increasing profit of the company, the company needs
to collaborate with more partners to increase its market share and product line.
The company is focusing to expand its sales & distribution network worldwide. The company needs to strengthen its position to capture on the
expected increase in the demand for gas engines in the coming years. The company needs to take advantage of its global reputation for the
distribution of its efficient and advanced products and services, in order to capture the gas engine market across the world.
“Caterpillar is a well-established organization having a global renowned name, strong financials, and a strong client base. The
product portfolio of a wide range of specifications of gas engines is likely to give an edge to the company over its competitors to
establish its consumer base worldwide, during the forecast period.”
– Mordor Analysis

9.2 CUMMINS INC. - COMPANY OVERVIEW 145
Introduction: Cummins provides natural-gas and diesel engines and power generators to the various sectors. The company
serves industrial, telecom, oil and gas, mining, commercial, agriculture, and residential sector, amongst others. The company
operates through four business segments, namely engine, distribution, component, and power systems. Cummins Inc. provides
gas engines under power system segments and also offers after sales services to gas engines under component and
distribution business segments.
Founded in 1819
Cummins has a global distribution network that operates through 28 wholly-owned and 10 joint venture distributors.
Columbus,
HQ United States
Financial Overview
Revenue Share (%), by Region, 2017 Operations: North America,
Revenue in USD billion, 2015-2017 Latin America, Europe, Asia-
Pacific, and Middle East &
Africa.
20.43
~58, 600 Employees

In USD billion
19.11
United States
46%
Revenue (2017)
17.51
USD 20.43 billion
54%
Rest of the World
+1 812-377-3121
2015 2016 2017
www.cummins.com
Source: Annual Report Source: Annual Report

9.2 CUMMINS INC. – BUSINESS OVERVIEW 146

CUMMINS INC.:
Business Segment , 2017
Major Business Segments
Engine Distribution Component Power System

16%
34%
• Engine: Under this segment, the company manufactures and markets the diesel and natural gas power engines. The
product are marketed under Cummins brand name, and certain other customers brand names. The engines are
23%
manufactured for wide range of vehicles, industrial sector and agriculture sector.
• Distribution: Under this segment, the company distributes and provide services for the products through 28 wholly-
owned and 10 joint venture distributors to the customer base in 450 locations in 90 distribution territories. 27%
• Component: Under this segment, Cummins supplies components for the products sold under Engine and Power System
segments. The company also provide after treatment systems, turbochargers, transmissions, and filtration production and
Engine Distribution
fuel systems for commercial diesel application.
• Power System: Under this segment, the company provides backup and prime power generators, customized diesel and
natural gas high-horsepower engines up to 5,500 horsepower and A/C generator/alternator products for internal
consumption and for external generator set assemblers to customers in all sectors. Component Power System

9.2 CUMMINS INC. – RELEVANT PRODUCTS 147
C GAS PLUS ISB5.9 G
• It can operating on compressed or liquid natural gas (CNG, LNG). Has “plus • It has wide range of applications, including shuttles, buses, local pickup and
technology”, which features highly efficient Energy Control Module, in order to delivery trucks, step vans, terminal tractors, and street sweepers.
control its fuel system, engine sensors, and high-energy ignition system • This engine is designed for either compressed (CNG) or liquefied (LNG) natural
gas fuels and is compatible with 100% bio-methane, offering a greenhouse gas
neutral option.

9.2 CUMMINS INC. – RELEVANT PRODUCTS 148
ISL G
Engine Displacement Peak Torque Emission

Rated Power (HP @ RPM) Application
Model (Litre) (Nm @ RPM) Norms
ISL Gas 8.9 320 @ 2200 1356 @ 1300 Truck and Bus Euro - V/VI

9.2 CUMMINS INC. – RECENT DEVELOPMENTS 149
May 2017
Cummins Westport has announced its model-

year 2018 lineup of renamed natural gas
engines for regional haul, vocational, transit,
bus, and refuse applications. The new natural
gas engines series is likely to be added under
the “N” designation.

9.2 CUMMINS INC. – ANALYST VIEW 150
The company undertook a series of cost optimization, such as reduction of overall material and manufacturing cost, warranty costs along with the
big step of business restructuring for greater profitability. With the improving performance of several of the major end-user industries, such as oil and
gas and mining, the company is expected to further profit from the earlier implied steps.
Cummins strategy of unification of Cummins, Cummins Power Generation and Cummins Onan brands under the sole brand of unification of
Cummins under the Power Systems business segment, is expected to benefit the company significantly, as the company plans to move ahead
focusing on one cohesive brand and further continue to deliver on its brand promise of dependability across the world. The company is expected to
further solidify its sales and distribution channel and strengthen its market share across power systems market, which includes high-speed engines,
generators, and alternators, amongst others.
Cummins recorded the strong financial year 2017 where sales hit USD 20 billion as well as the company expanding its presence
across 190 countries, strengthening its position as a global conglomerate of power equipment sales, including gas engines. Cummins
have strategically defended and maintained its market share across dozens of markets, despite witnessing financial backdrop in
several past quarters. The company also enjoys a strong brand name and sales & distribution channel and gives prime importance to
constant innovation and improvement, which in turn, is expected to benefit the company significantly during the forecast period.
- MORDOR ANALYSIS

9.3 SIEMENS AG– COMPANY OVERVIEW 151
Introduction: Siemens AG engages in the production and supply of products for power generation, power transmission, and
medical diagnosis. The company operates through multiple segments, such as power and gas; wind power and renewables;
energy management; building technologies; mobility; digital factory; and process industries and drives; healthiness (formerly
called healthcare), and the division financial services (SFS).
Siemens has marked its business presence in almost every country with a focus on the areas of electrification, automation, Founded in 1847
and digitalization. In the fiscal year 2017, which ended on September 30, 2017. The company provides gas engines under its
energy segment.
Munich,
HQ Germany
Financial Overview
Operations: North America,

Total Revenue in EUR billion, 2015-2017 Revenue Share (%), by Region, 2017 Latin America,
83.04 Europe/CIS/Africa, and Middle
East & Asia
21%
79.64
~372, 000 Employees
in EUR billion
Europe, C.I.S., Africa,

Middle East
75.63 Americas Revenue (2017)
EUR 83.04 billion
Asia, Australia
52% +49 89 63600
27%
2015 2016 2017 Source: Annual Report www.siemens.com

9.3 SIEMENS AG– BUSINESS OVERVIEW 152
Seimens AG: Revenue Share (%), by

Operating Business Segment Segment, 2017
Power Process
Building Digital Energy Financial Power Wind 1%
Mobility Generation Industries Healthiness 9%
Technology Factory Management Services and Gas Power
Services and Drives 19%
• The Building technologies provide automation technologies and digital services for safe, secure, and efficient buildings 17%
and infrastructures.
14%
• Digital Factory business segment is associated with providing technological solutions to manufacturing industries.
• The Energy management segment of Siemens is involved in activities, such as transmission and distribution, power 9%
management, and intelligent infrastructure. 8%
• The Financial Services (SFS) division is associated with providing investments with leasing solutions. 13%
10%
• The Mobility Division is associated with the transportation industry.
Power and Gas
• The Power and Gas division of the company is involved in energy generation from fossil fuels to transportation of oil and
Energy Management
gas. Building Technologies
• The Power Generation Services segment provides technological assistance and equipment to the power and gas Mobility
sector. Digital Factory

Process Industries and Drives
• The Process Industries and Drives division provides product, software, solution, and service portfolio for moving,
Healthineers
measuring, controlling, and optimizing all kinds of mass flows.
Financial Services (SFS)
• Healthineers segment provides technology to the healthcare industry. Renewable Energy

9.3 SIEMENS AG – RELEVANT PRODUCTS 153
F series Engines
FL Engines
• Its outputs ranging from 260 to 800 kWb at 50 Hz and 60 Hz.
• FL engines also operate with a variety of fuel types, including natural gas, landfill gas, and sewage gas.
• These engines include features, such as fuel flexibility and a high degree of modularity.
• FL engine comprises of a two-circuit cooling system, which offers a high temperature option for heat demand, with temperatures of 120ºC in the main
circuit and 80ºC in the auxiliary circuit possible.
• FL Series engines are Otto cycle units that are turbocharged and also feature charge-air cooling.
FR Engines
• These engines have outputs ranging from 150 to 238 kWb at 50 Hz and 60 Hz.
• FR engines have a single circuit cooling system and complete heat recovery is available from both the water jacket and exhaust.

9.3 SIEMENS AG - RELEVANT PRODUCTS 154
S series Engines
SL Engines
• It is fueled by natural gas, landfill and sewage gas, flare and well gas and syngas.
• It has an output range from 209 to 1150 kWb at 50 Hz and 60 Hz.
• The SL engines are ideal for power generation, cogeneration/tri-generation, mechanical drive, and marine applications.
• Models include: SGE-18SL, SGE-24SL, SGE-36SL, SGE-48SL, and SGE-56SL
SM Engines SR Engines
• It is fueled by natural gas, landfill and sewage gas and propane LPG. • It is fueled by fueled natural gas and well gas, and have fuel flexibility.
• Its output range when fuel is natural gas is 1055 to 1100 kWb. • Output range from 180 to 870 kWb at 60 Hz.
• Output range when fuel is propane or LPG is 275 to 906 kWb at 50 Hz and • It has great flexibility for load acceptance.
60 Hz, respectively.
• These engines also feature a double circuit cooling system, in which
different auxiliary cooling circuit temperatures are achievable.

9.3 SIEMENS AG - RELEVANT PRODUCTS 155
H series Engines E series Engines
HM Engines EM Engines
• It has an output range that goes from 520 to 1350 • Robust, compact design
kWb at 50 Hz and 60 Hz.
• Spark-ignited lean-burn unit
• It is turbocharged and feature single or double
• Innovative pre-combustion chambers
stage charge-air cooling
• 12 unique high-volume cylinders
• Less maintenance
• Fast cycle times and implementation
• Smallest footprint in the competitive set.

9.3 SIEMENS AG – RECENT DEVELOPMENTS 156
May 2017
Siemens AG has launched its new gas engine E-

series which includes SGE-86EM and SGE-
100EM for 50 Hz and 60Hz market respectively.
This engine series comes with a power output of
2 megawatts (MW). The E-series engine has 12
cylinders and offers a large volume per cylinder,
and high displacement.

9.3 SIEMENS AG - ANALYST VIEW 157
With active collaborations and supply contracts across the industrial, commercial, and residential applications, Seimens continues to provide
world-class customized CHP systems and associated services to different business verticals, thereby, helping in improving the energy
efficiency and the viability of the end user’s energy project. Recent notable collaborations and contracts could be noted in countries across the
globe, such as Saudi Arabia, United States, Turkey, and others.
The Asia-Pacific region, particularly India, is expected to be the prime target of business expansion for the company in the coming years. The
company is planning to promote its expertise in the entire value chain of electrification, automation, and digitalization, as the prime driver of
business expansion in the region. The company already offers a wide range of products and have 22 factories in India and plans to further
strengthen its position and business activities in the country for increasing revenues.
“Siemens enjoys the support of a sound financial cushion and a strong sales & distribution network. The company has always
remained as a pioneer of technological innovation across products including gas engine and is a company that always has a clear cut
long term strategy such as 'Vision 2020 '. The company remains open to possible merger & acquisition opportunity, in a bid to further
strengthen its business in the coming years.”
- Mordor Analysis

9.4 ROLLS-ROYCE HOLDING PLC – COMPANY OVERVIEW 158
Introduction: Rolls-Royce Holding PLC provides a wide range of highly-efficient integrated power and propulsion solutions,
which are widely appreciated across the aerospace, energy, marine, and off-highway applications. The company is the one of
the leading manufacturers of aero engines for business aviation jets and large civil aircraft, and also provides defense aero
engines in the world with significant establishment across the nuclear and marine sectors.
The company offers gas systems and engines through the marine and power segments. Founded in 1884
London,
HQ United kingdom
Financial Overview
Revenue in GBP billion, 2015-2017 Revenue Share (%), by Geography, 2017 Operations: Asia-Pacific,
Europe, North America, South
1% Europe
2% 1% America, Middle East, Africa
16.30
14.95 North America
13.35 ~4,400 Employees
in GBP billion
South America
24% 34%
Middle East
Revenue (2017)
Asia GBP 16.30 billion
8% Africa
Australasia +44 20 7222 9020

1%
2015 2016 2017 29%
Other
Source: Annual Report www.rolls-royce.com

9.4 ROLLS-ROYCE HOLDING PLC – BUSINESS OVERVIEW 159

Rolls Royce Holding PLC: Operating segments Segment, 2017
7% 6%
Civil Aerospace Defense Power Systems Marine Nuclear
19%
• Civil Aerospace: Through this segment, the company manufactures aero engines for the large commercial aircraft, regional jet,
and business aviation markets. The business uses its engineering expertise, in-depth knowledge, and capabilities to provide
through-life support solutions for its customer. 15% 53%
• Defense: Through this segment, the company provides defense aero engines for military transport and patrol aircraft and has
strong positions in other sectors, including combat, training aircraft, and helicopters.
• Power Systems: Through this segment, the company provides high-speed and medium-speed reciprocating engines, complete
propulsion systems, and distributed energy solutions. The business also serves the marine, defense, power generation, and
industrial markets.
Civil Aerospace Defence Aerospace
• Marine: Through this segment, the company manufactures and provides propulsion and handling solutions for the maritime,
Power Systems Marine
offshore, merchant, and naval markets, ranging from standalone products to complex integrated systems.
• Nuclear: Through this segment, the company functions as the technical authority for the UK nuclear steam raising plant, which Nuclear
powers the Royal Navy’s nuclear submarine fleet and manages plant design, safety, manufacture, and service support. The
company's civil nuclear operation supplies safety-critical systems to about half the world’s nuclear power plants. Source: Annual Report

9.4 ROLLS-ROYCE HOLDING PLC – RELEVANT PRODUCTS 160
Bergen B35:40V Gas Engine
Technical Specifications
Number of cylinders 12
Engine speed r/min 750
Mean piston speed m/s 10
Max. Continuous Rating (MCR) kW 5400
Max. continuous rating (MCR) BHP(metric) 7750 Key Features
• Compact and powerful

Mean effective pressure (BMEP) bar 20 • Low emissions of NOx, CO2, Sox, and particulate
• Low energy consumption
Specific energy consumption kJ/kWh 7475
• Service friendly
• Optimum response at all engine load points (variable turbo geometry)
Specific lubricating oil consumption g/kWh 0.4
• Super silent resilient mounting
Cooling water temp. engine outlet °C 90

9.4 ROLLS-ROYCE HOLDING PLC – RECENT DEVELOPMENTS 161
April 2018
Rolls-Royce Holding PLC has announced its

deal with Hurtigruten Cruise, through which it
will supply the gas engine to six existing
passenger cruise vessels, with an option for a
further three. The ships will completely change
their power system with the installation of new
Rolls-Royce LNG-engines as part of a new
hybrid system.

9.4 ROLLS-ROYCE HOLDING PLC – ANALYST VIEW 162
Europe and its shipping industry remain as a prime area of interests for the company. The company has been actively working in marine transport
industry, in a bid to capitalize on the upcoming stringent SOx regulations. The company not only has a strong customer base across sectors but also
has a strong government customer base. The company is expected to benefit significantly in the gas engine business, as the sulfur emissions norms
are implemented.
Over the past few years, the company has invested heavily in the power segment. Over the last two years, the company has almost doubled its
customer base, particularly in the Asia-Pacific region. The company has also given equal importance to the technological innovations, such as the
launch of the V line range of gas engines, which in turn, is expected to benefit the company significantly during the forecast period.
“Rolls-Royce’s Power Systems and its core brand MTU have a long history and excellent reputation as providers of high-end-quality
solutions. The company holds extensive brand presence and brand name, across the world. In a bid to maintain the similar position, the
company is working with the Power Systems 2030 strategy, aimed to transform itself from a classic engine maker to a provider of pioneering,
integrated solutions for the marine and infrastructure sectors, is expected to benefit the company significantly during the forecast period.”
- Mordor Analysis

9.5 WARTSILA OYJ ABP – COMPANY OVERVIEW 163
Introduction: Wärtsilä is one of the leading providers of smart technologies and complete lifecycle solutions for the energy
and marine markets. The company’s operating segment is sub-divided into two mutually supportive market areas, Marine
Solutions and Energy Solutions, which are supported by Services.
The company provides solutions for base load power production, grid stability and peaking, and industrial self-generation.
Additionally, the company offers ship power solutions, such as ship design, generating sets, engines, reducing gears,
Founded in 1834
propulsions equipment, automation, and power distribution systems, and sealing solutions for the marine industry. The
company operates in over 200 locations in more than 80 countries around the world.
Helsinki,
HQ Finland
Financial Overview
Net Sales in EUR billion, 2015-2017 Net Sales Share (%), by Region, 2017 Operations: Europe, Asia,
Americas, Africa, Middle
East
5.03 2.1%
4.7%
~18,000 Employees
4.92 Europe
in EUR billion
31.0% Asia
22.6%
Americas Net Sales (2017)
4.80
EUR 4.92 billion
Africa
Others
+358 10 709 0000
39.6%
2015 2016 2017
Source: Annual Report www.wartsila.com

9.5 WARTSILA OYJ ABP – BUSINESS OVERVIEW 164
WARTSILA OYJ ABP : Market Areas

Net Sales Share (%), by Segment,
ENERGY SOLUTIONS 2017

Main Competitors in Gas-fired Power MARINE SOLUTIONS
SERVICES Projects – GE, Siemens, MAN Diesel Major competitors in the engine market
& Turbo, Caterpillar (MAK), and – MAN D&T, Caterpillar, and HiMSEN
Rolls-Royce
SERVICES - This business segment supports its customers throughout the lifecycle of their installations by optimizing 26.5%
efficiency and enhancing their operations. Operates in the marine, energy, and oil and gas industries, as well as in hydro
45.0%
and industrial related businesses.
ENERGY SOLUTIONS – The company provides ultra-flexible internal combustion engine based power plants, utility-scale
solar photovoltaic (PV) power plants, energy storage systems, and LNG (liquefied natural gas) terminals and distribution
systems. It serves three main customer segments: utilities, independent power producers (IPPS), and industrial customers. 28.5%
It has delivered over 4800 power plants ranging from 10 MW to over 600 MW in 177 countries, globally.
MARINE SOLUTIONS - It enhances company’s business in the marine and oil and gas industry by providing innovative
Services
products and integrated solutions, that includes medium-speed diesel and dual-fuel engines, propulsion systems and
Energy Solutions
gears, energy management systems, and hybrid solutions among others. The company serves both shipyards and ship
Marine Solutions
owners and offers a solution from the initial vessel design choices to everyday operations throughout the vessel’s lifecycle.

9.5 WARTSILA OYJ ABP – RELEVANT PRODUCTS 165
Gas Engines
WÄRTSILÄ 31SG WÄRTSILÄ 31SG
• Gas, oil and dual fuel versions • Can run on a wide range of gases, including liquefied petroleum gas (LPG) and
• Improved efficiency and reduced emissions ethane.
• Longer component lifetime • It is the first medium-speed engine capable of running on LPG.
• Lower overall lifecycle cost

Dual Fuel Engines
Wärtsilä 20DF Wärtsilä 31DF

• Dual fuel engine capability enables ships to be operated on either conventional
• Available in 8 to 16 cylinder configurations and has a power output ranging from
liquid marine fuels (LFO, HFO or liquid bio fuel) or LNG
4.2 MW to 8.8 MW, at 720 rpm and 750 rpm
• When operating in gas mode, the Wärtsilä 20DF engine is already compliant
• Available in Diesel, Dual Fuel (DF), and Pure Gas (SG) versions
with IMO Tier III regulations without any secondary exhaust gas purification
• Meets the coming IMO Tier 3 regulations when operating on gas
systems
• Lowest fuel consumption over a wide operating range
• When fuelled by gas, the SOx and CO2 emissions are notably reduced and
• Suitable for a broad range of ship types and applications, both as a main
smokeless operation is attained
propulsion engine and in diesel-electric configurations, or as an auxiliary engine
• Compact and light
• In the Offshore sector, the Wärtsilä 31 is a perfect solution for OSV´s and
• Ideal mechanical-drive prime mover in smaller applications, such as small
drilling or semi-submersible vessels, where operational flexibility, high power
cargo vessels, ferries or tug boats
density, long intervals between overhauls, and high levels of safety are of
• An excellent choice for harbor generating set applications in a wide range of
paramount importance
vessel types

Dual Fuel Engines
Wärtsilä 34DF Wärtsilä 46DF

• Advanced dual-fuel technology and efficiency, and can be used for both main • Optimal prime mover solution for: LNG Carriers, Cruise ships, RO-RO/PAX,
engine and generating set applications Ferries, and large Offshore units
• Enables ships to be operated on either conventional liquid marine fuels (LFO, • A four-stroke dual-fuel engine that can run on natural gas, heavy fuel oil (HFO)
HFO or liquid bio fuel) or LNG or marine diesel oil (MDO)
• When operating in gas mode, the Wärtsilä 34DF engine is already compliant with • Lowest gas fuel consumption in the industry
IMO Tier III regulations without any secondary exhaust gas purification systems • IMO Tier III Compliant
• When fuelled by gas, the SOx and CO2 emissions are notably reduced and • Most powerful 4-stroke gas engine in the market
smokeless operation is attained
• Low exhaust gas emissions and gas feed pressure
• Obtained certification of emission standard compliance from the US
• Embedded automation system
Environmental Protection Agency (EPA)
• Proven and reliable dual-fuel technology
• Ideal choice for main power source in a vast range of applications, including
• Designed for a broad range of marine applications
offshore support vessels and platforms, small LNG carriers, and ferries and tugs
Dual Fuel Engines
Wärtsilä 50DF
• Designed to give high output with fuel flexibility, low emissions, efficiency, and reliability
• The engine can run on either natural gas, light fuel oil (LFO), or heavy fuel oil (HFO), and switching
between fuels can take place seamlessly during operation, without loss of power or speed
• Ensures safety and continuous installation operability
• When operating in gas mode, the nitrogen oxide (NOx) emissions are at least 85% below those
specified current IMO regulations
• The sulfur oxide (SOx) and particle emissions are negligible at almost zero percent.
• Applications: shipping industry, offshore oil and gas industry, and LNG Carrier.

9.5 WARTSILA OYJ ABP – RECENT DEVELOPMENTS 169
Oct 2017 Jan 2018
Wartsila received an order to supply six Wärtsilä

Wartsila provided gas engine generating sets
31DF dual-fuel engines running primarily on
for two power plants operated by Tokyo Gas
liquefied natural gas (LNG), the navigation system,
Engineering Solutions Corporation (TGES), a
and broad scope of other products and systems for
subsidiary of Tokyo Gas.
new luxury and environmentally friendly ferry being
built for the Finland based operator, Viking Line.

9.5 WARTSILA OYJ ABP – ANALYST VIEW 170
Since its inception, the company have focused on providing the customers with the best lifetime efficiency and reliability in the market
through an integrated offering that meets the business needs throughout the world. Moreover, the company strives to maintain its position in
the market by strengthening its offering of solutions for environmentally safe and reliable power system operation through a combination of
organic growth, partnerships, and acquisitions.
Wartsila’s engine power generation solutions provide a unique combination of energy efficiency, and both fuel and operational flexibility. The
company supports the continued development of the gas infrastructure with small and medium size LNG terminals and liquefaction solutions.
Moreover, the company’s increasing investments in R&D has created a strong foundation for securing and strengthening a position at the
forefront of market innovation in the gas engine market.
“Wärtsilä constantly seeks new ways to maintain high quality and cost efficiency for the products offered by them, often in co-
operation with the customers and leading industrial partners. Moreover, with the wide portfolio of products, systems, and
solutions, combined with the vast installed base and industry know-how, Wärtsilä is expected to continue to be one of the
leading players in the gas engine market.”
– Mordor Analysis

9.6 MITSUBISHI HEAVY INDUSTRIES LTD – COMPANY OVERVIEW 171
Introduction: Mitsubishi Heavy Industries (MHI) Ltd. manufactures and sells heavy machinery, globally. It operates through
three business segment: Power Systems, Industry & infrastructure and Aircraft, Defense & Space. Mitsubishi Heavy Industries
Engine & Turbocharger, Ltd. deals with the design, manufacture, procurement, quality assurance, construction, sales and
Founded in 1884
servicing of engines; power System (Engineering and Energy Management Services (EMS)); lease and rental of generator
sets; and design, manufacture, procurement, quality assurance, sales and servicing of turbochargers.
Tokyo,
MHI operates in the gas engine market through its Industry & Infrastructure business segment. HQ Japan

Financial Overview Latin America, Europe,
Africa, Asia and Oceania,
Net Sales Share (%), by Geography, 2017 Middle East
Net Sales in JPY billion, 2015-2017
1.9% Japan Net Sales (2017)
3.0% 3.5% JPY 3914.00 billion
4,046.80 USA
2.8%
3,992.10 Asia
In JPY billion
80,652 Employees
10.1% Europe (As of March 2018)
3,914.00
46.5% Central and South America
15.8% Middle East 81-3-6716-3111
Africa
2015 2016 2017 16.4% Oceania www.mhi.com/

9.6 MITSUBISHI HEAVY INDUSTRIES LTD – BUSINESS OVERVIEW 172
• The company aims to be among the industry leaders in the energy solutions and
turbomachinery businesses. Net Sales Share (%), by
• Core business of this segment includes: Thermal power generation systems, Industry Segment, 2017
compressors, aero engines, nuclear power, renewable energy, and others
4.3%
POWER SYSTEMS DOMAIN
• Core business includes: Under this segment, the company provides Material
17.3%
handling equipment, turbochargers, engine and energy, metals machinery, air-
35.5%
conditioning and refrigeration, automotive thermal systems, Mechatronics systems
intelligent transport systems (ITS), industrial and precision instruments, machine
tools, environmental systems, land transportation systems, chemical plants,
INDUSTRY AND
commercial ships, and others. 42.9%
INFRASTRUCTURE DOMAIN
Power Systems
• Core business includes: The company offers commercial aviation systems, Industry & Infrastructure
and integrated defense and space systems Aircraft Defense & Space
Others
AIRCRAFT, DEFENSE AND SPACE DOMAIN

9.6 MITSUBISHI HEAVY INDUSTRIES LTD – RELEVANT PRODUCTS 173
Mitsubishi Miller Cycle Gas Engine GSR Series
GS6R2-PTK GS6R-PTK GS12R-PTK GS16R-PTK GS16R2-PTK

50Hz 60Hz 50Hz 60Hz 50Hz 60Hz 50Hz 60Hz 50Hz 60Hz 60Hz
Output (kWe) 315 380 320 305 700 610 930 815 1500 1000 1200
RPM 1000 1200 1500 1200 1500 1200 1500 1200 1500 1200 1200
Fuel consumption
73.0 89.5 79.8 72.9 168.6 143.4 223.9 190.6 351.5 233.4 274.5
(Nm3/h)
Voltage 380V 480V 380V 480V 380V 480V 380V 480V 380V 480V 480V
Meganinja GS16R2-PTK
Rated Power Parallel Options between Gensets is Available

Output (Min. Load 50%) 1875kV/A 1500kW(50Hz), 1500 kV/A 1200kW(60Hz)
Frequency 50Hz / 60Hz
6600V / 10000V / 1100V (50Hz)
Voltage
480V / 4160V / 6600V (60Hz)
Power Factor 0.8 Lagging
Gas Engine
Fuel Gas Natural Gas
Pressure 350kPa ~ 600kPa3
Lubricating oil Exxon Mobil Pegasus 1005
Speed 1500 min-1 50(Hz), 1200 min-1(60Hz)
Cooling system Radiator cooling system (air-cooled)
KU30GSI
Features
• KU30GSI is one of the most advanced spark ignition gas engines with 48.8% efficiency
• A wide range of combined heat and power (CHP) designs
• Multi-engine plant design:
• Maintains overall plant efficiency at optimum levels
• Provides savings through spinning reserve
• Reduces plant maintenance and life-cycle costs
• Allows independent engine start and control
Model 12KU30GSI 14KU30GSI 16KU30GSI 18KU30GSI
Generator Frequency (Hz) 60 50 60 50 60 50 60 50
No. of Cylinders 12 14 16 18
Bore x stroke (mm) 300 x 380
RPM 720 750 720 750 720 750 720 750
Generator Rated Output

3,650 3,800 4,250 4,450 4,900 5,100 5,500 5,750
(kWe)
Engine Weight (Metric Ton) 40 48 54 60
NOx Emissions (ppm) 320 or less (O2: 0%), 92 or less (O2: 15%)

KU30GA
Features
• Micro-pilot gas engine with low NOx emissions (30 ppm @ O2 = 15%, 1/3 TA LUFT)
• Flexible, Fuel Efficient, and Reliable
• Multi-engine plant design:
• Maintains overall plant efficiency at optimum levels
• Provides savings through spinning reserve
• Reduces plant maintenance and life-cycle costs
• Allows independent engine start and control
Model 12KU30GA 14KU30GA 16KU30GA 18KU30GA
Generator Frequency (Hz) 60 50 60 50 60 50 60 50
No. of Cylinders 12 14 16 18
Bore x stroke (mm) 300 x 380
RPM 720 750 720 750 720 750 720 750
Generator Rated Output

3,650 3,800 4,250 4,450 4,900 5,100 5,500 5,750
(kWe)
Engine Weight (Metric Ton) 40 48 54 60
NOx Emissions (ppm) 200 or less (O2: 0%), 58 or less (O2: 15%)

9.6 MITSUBISHI HEAVY INDUSTRIES LTD – RECENT DEVELOPMENTS 176
May 2017
Toho Gas Co., Ltd. (Toho Gas) along with Mitsubishi

Heavy Industries Engine & Turbocharger, Ltd. (MHIET)
have developed a new 450 kW gas engine
cogeneration system that utilizes air-cooled remote
radiator. Both the companies intend to promote this
energy-efficient new system for use in hospitals,
commercial facilities, offices, and factories.

9.6 MITSUBISHI HEAVY INDUSTRIES LTD - ANALYST VIEW 177
MHI Group maintains close ties between its R&D and business domains. The company focus on expanding gas engine models to
accommodate a broad array of needs, both in Japan and overseas, for distributed power supplies, regular power generation and cogeneration
systems, and emergency power supplies in preparation for disasters of all kinds.
Moreover, the company is focusing on strengthening cross-domain functions, for which the company is anticipating new synergies in
technologies and skills, enhanced development of human resources, and greater efficiency in work performance and facility utilization.
“MHI group has been focusing on leveraging technological expertise through alliances with other companies to cultivate business in new areas.
Moreover, the company is increasingly focusing on expanding its overseas business to maintain a positive growth trajectory and is planning to
undertake reforms in its management policies, business execution practices, and business administration processes for achieving the same. ”
– Mordor Analysis

9.7 HYUNDAI HEAVY INDUSTRIES CO. LTD – COMPANY OVERVIEW 178
Introduction: Hyundai Heavy Industries Co. Ltd is one of the leading manufacturers of ships, offshore structures, plants,
engines, and other products. The company operates through three business divisions, including shipbuilding, offshore and
plant, and engine and machinery. The company manufactures and sells large and medium gas engines under its engine and
machinery business division, under the brand name HiMSEN. Since the first production of the four units of the HiMSEN gas
engines in 2001, Hyundai Heavy Industries’ engine machinery division has delivered more than 10,000 units of HiMSEN
engines to 550 clients from 43 countries. The company’s business activities are further expanded into diverse fields of marine
Founded in 1972
machinery, such as marine pumps and turbines, ballast water treatment system, and LNG gas solutions. In addition, EPP
(land-based engine power plant), including portable power generation equipment, is supplied to electric power plants in Cuba,
Brazil, Middle East & Africa, Europe, and Asia. Ulsan,
HQ South Korea
Financial Overview
Total Revenue, In KRW trillion, 2015-2017 South America, Europe,
Middle East and Africa, Asia-
27.488 Pacific
22.300
16,000 Employees
In KRW trillion
15.468
Revenue (2017)
KRW 15.468 trillion
+ 052-202-2114
2015 2016 2017

www.hhi.co.kr

9.7 HYUNDAI HEAVY INDUSTRIES CO. LTD – BUSINESS OVERVIEW 179
Operating Segments
Segment, 2018
Ship Building Offshore and Plant Engine Machine
13%
32% 55%
• Ship Building: Under the ship building segment, the company offers container line, oil tankers, refinery product carriers,
saline water ships, LNG and LPG carriers, RO/ RO line, drillships, and car carriers, among others.
• Offshore and Plant: Under this segment, Hyundai Heavy Industries (HHI) designs, purchases, manufactures,
transports, installs, and commissions various types of equipment, such as fixed and floating facilities that develop and Shipbuilding Offshore and Plant
produce offshore oil and gas fields and modules of onshore plant facilities.
• Engine Machine: Under this segment, the company produces large-sized and medium-sized engines, as well as gas
Engine Machine
fuel supply systems, gas regeneration/remelting systems, and nitrogen reduction systems, among others. HHI offers its
products under three sub segments, namely, engine and products, park machinery, and engine power plant. Source: Annual Report

9.7 HYUNDAI HEAVY INDUSTRIES CO. LTD – RELEVANT PRODUCTS 180
HiMSEN engine features light weight, high-output, and high-efficient design, as well as a wide range of lineup models
HiMSEN 4-Stroke Gas Engines
that can run on diesel and natural gas.
Sl. No Model RPM
1. H17/21V 1500/1800
2. H17/28 900/1000
3. H17/28E 900/1000
4. H17/28U 900/1000
720/750
5. H21/32
900/1000
6. H21C 900/1000
7. H25/33 720/750
8. H32/40 720/750
9. H32/40V 720/750
10. H22CDF 720/750

720/750
11. H27DF
900/1000
12. H35DF 720/750
13. H35DFV 720/750

9.7 HYUNDAI HEAVY INDUSTRIES CO. LTD - RECENT DEVELOPMENTS 181
Jan 2018 Mar 2018
Hyundai Heavy Industries won a USD 47

Hyundai Heavy Industries in collaboration with
million order to supply dual fuel power
Man Diesel & Turbo is planning to build a new
generation facilities to the Indonesian state
test-engine facility in Ulsan, South Korea. The
power company, PLN. Under this contract,
new venture aims to expand the Man Diesel’s
HHI is expected to supply 21 units of 4.1 MW
test capacity, in the process strengthening its
dual-fuel HiMSEN engine and related
development of dual-fuel gas engines. The
equipment for the power plant.
test facility is expected to be located in Ulsan
at HHI-EMD and is scheduled to begin
operation in early 2019.

9.7 HYUNDAI HEAVY INDUSTRIES CO. LTD – ANALYST VIEW 182
Since its establishment in 1972, the Hyundai Heavy Industries has grown as one of the leading heavy industry companies by
successfully diversifying from shipbuilding into offshore and engineering, industrial plants, engine and machine. HHI’s engine
and machinery division reached a milestone of 10,000 HiMSEN diesel and gas engines, which helped it to strengthen its
position in the global engine market.
“The company is playing a pivotal role in the future growth of the engine industry by supplying domestic and overseas market its
power generation equipment. As one of the leading engine manufacturers in the world, HHI-EMD accounts for a significant share
of the world’s major engine market.”
– Mordor Analysis

9.8 MAN SE - COMPANY OVERVIEW 183
Introduction: MAN SE is among Europe’s leading commercial vehicle and mechanical engineering groups, and focuses on
activities in the areas of transportation and energy.
The company's business activities are grouped into two business areas:
• Commercial Vehicles, comprising MAN Truck & Bus and MAN Latin America
• Power Engineering, featuring MAN Energy Solutions (formerly MAN Diesel & Turbo) and Renk
The company has 14 production sites across the world, namely, Germany, Denmark, France, Switzerland, Czech Republic, Founded in 1758
Brazil, Turkey, China, India, Austria, Poland, Russia, Mexico , and South Africa.
Munich,
HQ Germany
Financial Overview
Total Revenue in EUR billion, 2015-2017 Operations: North America,

Revenue Share (%), by Region, 2017 Latin America, Europe,
14.34 Africa, and Asia
13.70 13.56
-1.0%
~54,297 Employees
in EUR billion
23.2% Germany
Revenue (2017)
EUR 14.34 billion
Other Countries
76.8%
+49 89 36098 0
2015 2016 2017

Source: Annual Report Source: Annual Report www.corporate.man.eu

9.8 MAN SE – BUSINESS OVERVIEW 184
MAN SE: BUSINESS AREAS
Commercial Vehicles Power Engineering
• Commercial Vehicles: MAN Truck & Bus is one of the leading manufacturers of commercial vehicles in Europe. The company
has production facilities in three European countries, Russia, South Africa, India, and Turkey. Product portfolio includes vans,
trucks, buses, and diesel and gas engines, as well as passenger and freight transportation services.
• MAN Latin America is one of Brazil’s largest manufacturers of trucks and buses. The company has a nationwide sales and
service network in Brazil and neighboring countries. Most important markets for the company are Latin America and Africa.
• Power Engineering: MAN Diesel & Turbo is one of the leading developers and manufacturers of large-bore diesel and gas
engines, turbo compressors, industrial turbines, and chemical reactor systems, globally.
• Renk, a listed subsidiary of MAN SE, is a global manufacturer of special gear units, propulsion components, and testing
systems. The company is also a leading manufacturer of tracked vehicle transmissions of different sizes, as well as of slide
bearings for electrical machinery.
MAN Truck & Bus MAN Latin America MAN Diesel & Turbo Renk
Net Sales
10.037 1.141 2.832 0.469
(EUR billion)

9.8 MAN SE – RELEVANT PRODUCTS 185
MAN ENGINES AND COMPONENTS
• MAN Engines, a division of MAN Truck & Bus, develops, produces and sells a wide range of efficient diesel and gas engines for various applications in many
industries.
• MAN Engines are being installed in trucks and buses produced by the MAN Group, and are used in commercial vehicles produced by other suppliers, for power
generation in cogeneration plants, and as drive units in agricultural machinery, rail vehicles, marine vessels and special-purpose vehicles.
• Offers maximum efficiency.
• The output offered by these engines range from 37 kW to 1,471 kW (50 HP to 2,000 HP) in the form of 4 and 6-cylinder in-line units and 8- and 12-cylinder V
engines.
• Toward the end of 2015, MAN Engines laid the foundation for environmental-friendly propulsion for the passenger ferry, MS HELGOLAND. The company delivered
three powerful, 12-cylinder gas engines (MAN E3262 LE222 engines) to MAN Rollo.

MAN ENERGY SOLUTIONS – Relevant Products
Gas Engines for Power Plants Dual Fuel Engines
• MAN Energy Solutions designs and produces spark ignited gas engines that • Dual fuel engines offered by the company run on gas, diesel, biofuel or heavy
ranges from 7 to over 20.7 MW. fuel oil (HFO).
Product Portfolio Includes: Product Portfolio Includes:
• 51/60G TS - A superior efficient two-stage turbocharged gas engine • 51/60DF - A dual fuel engine that converts liquid fuel (diesel operation)
delivered in 18-cylinder versions with electrical outputs of 18.7 MW and or natural gas into electrical power efficiently and with low emissions.
20.4 MW. The engine delivers maximum output combined with maximum flexibility
and reliability.
• 51/60G - Available in a V-engine version with 18 cylinders with electrical
outputs of 100 to 300 MW. • 35/44DF - Designed for gas operation. The engine uses a separate pilot
ignition system based on a well-proven high-pressure injection
• 35/44G TS - Available in 12V and 20V-cylinder versions with electrical
technology, when in gas mode.
outputs of 6.9 MW up to 12.4 MW.
• 28/32S-DF - Can run on 100% diesel liquid fuel, and it can operate
• 35/44G – Available in a V-type version with 20 cylinders with electrical
optimally in gas-sharing. It is ultra-reliable and robust
outputs up to 200 MW

MAN ENERGY SOLUTIONS – Relevant Products
Two-stroke Engines for Marine Applications
Product Portfolio Includes:
• ME-B Applications - The ME-B engine is MAN Energy Solutions’ most Four-Stroke Engine - MAN 51/60DF Dual Fuel Flexibility
modern, two-stroke design, and the most popular two-stroke diesel • The MAN 51/60DF provides optimum fuel flexibility by combining diesel and
engines. These engines are being retrofitted to dual-fuel operation, so gas technologies in one engine.
they can run on natural gas.
Features:
• ME-GI Applications - The ME-GI engine gives ship owners and
• Performance range for this marine engine from 5,850 kW to 18,000 kW
operators the option of dual-fuel, using either HFO or gas, predominantly
natural gas but also LPG and methane. Delivers significant reductions in • Ideal for LNG carriers as well as other marine applications.
CO2, Nox, and SOx emissions. • It is a highly efficient engine that produces low emissions and can be
• ME-LGI Applications - With the designation LGI (liquid gas injection), conveniently switched from gas mode to liquid fuel mode without
all ME/ME-C/ME-B engines are available for operation on low flashpoint interruption.
liquid (LFL) fuels like methanol, ethanol, LPG and DME. These engines
operate as dual-fuel engines with high-pressure injection and has same
fuel consumption as similar diesel engines.

9.8 MAN SE – RECENT DEVELOPMENTS 188
Sept 2017 Jan 2018 Jun 2018
MAN Diesel & Turbo received an order from As part of a strategic and technological
Indonesia's state-run electricity supplier, transformation, former MAN Diesel &

MAN Diesel & Turbo developed a new Turbo Name had been replaced with the
Perusahaan Listrik Negara (PLN) to deliver a
cylinder bypass function enabling ME-GI rebranded MAN Energy Solutions. This
total of 20 MAN 51/60DF engines. Ten of these
engines to continue to run on LNG, even strategic realignment is supported by the
engines will power five new power plants, each
when an individual cylinder misfires. expansion of MAN Energy Solutions’
with a capacity of 15 or 20 MW. The engines
are to be fuelled first by diesel and later by product range to include hybrid, storage,
natural gas. and digital service technologies.

9.8 MAN SE – ANALYST VIEW 189
As part of company’s strategic and technological transformation, MAN Diesel & Turbo was replaced with rebranded Man Energy Solutions.
The rebranding is expected to expand its business with sustainable technologies and solutions, such that they become its main source of
revenue by 2030. Moreover, the strategic realignment will witness electrical energy in the future generated either from renewable sources or
by decentralized, flexible power plants that will increasingly be powered by carbon-neutral fuels.
“MAN SE, through its operating companies, has continued to focus on expanding and optimizing the product portfolio in the gas engine
market with increased efficiency and improved reliability. The company also focus on securing market superiority through advancement
and differentiation, optimizing the global production network by leveraging the market opportunities.”
– Mordor Analysis

9.9 GENERAL ELECTRIC COMPANY – COMPANY OVERVIEW 190
Introduction: General Electric Company (GE) GE is a US multinational conglomerate, and is a global digital industrial
company, transforming industry with software-defined machines and solutions that are connected, responsive, and predictive.
The company offers products and services ranging from aircraft engines, power generation and oil and gas production
equipment to medical imaging, financing, and industrial products. The company serves customers in over 180 countries across
the world.
The company operates through the following segments: Power, Renewable Energy, Oil and Gas, Aviation, Healthcare,
Founded in 1892
Transportation, Lighting, and GE Capital. Under the Power business, the company provides technologies, solutions and
services related to energy production, including gas and steam turbines, engines, generators, high voltage equipment, and
power generation services and digital solutions. Boston,
HQ United States
Financial Overview
Operations: Americas, Asia,
Total Revenue in USD billion, 2015-2017 Total Revenue Share (%), by Region, 2017 Europe, and Middle East &
Africa
123.69 10%
122.09 US
~313,000 Employees
117.39 16% 38% Europe
In USD billion
Asia Revenue (2017) -

USD 122.09 billion
18% Middle East & Africa
18% Americas +1-617-443-3000
2015 2016 2017

Source: Annual Report www.ge.com

9.9 GENERAL ELECTRIC COMPANY – BUSINESS OVERVIEW 191
General Electric: Segments
Renewable Total Revenue Share (%), by

Power Lightning Oil and Gas Aviation Healthcare Transportation Capital
Energy Operating Segment, 2017
• Power: GE Power includes products and technologies, which serve power generation, industrial, government, and other customers,
globally, to reuse water or harness resources, such as oil, gas, coal, diesel, nuclear, and water, to produce electric power. This segment
2%
includes gas and steam turbines, upgrade and service solutions, and data-leveraging software. 3% 7%
• Renewable Energy: GE Renewable Energy segment offers onshore and offshore wind turbines, wind turbine blades, solar, and
29%
hydropower solutions.
15%
• Lightning: GE Lighting business is primarily focused on consumer lighting applications in the United States, and providing energy
efficiency and productivity solutions, for commercial and industrial customers.
8%
22%
• Oil and Gas: This segment serves all segments of the oil and gas industry, from drilling, completion, production, and oil field operations, to
14%
transportation via liquefied natural gas (LNG) and pipelines. The segment provides oilfield services, oilfield equipment, turbo machinery
and process solutions, and digital solutions.
Power Renewable Energy
• Aviation: GE Aviation designs and produces commercial and military aircraft engines, integrated digital components, electric power, and
mechanical aircraft systems, in addition to providing aftermarket services, to support the company’s products.
Oil and Gas Aviation
• Healthcare: GE Healthcare provides essential healthcare technologies and services to hospitals, medical facilities, pharmaceutical, and
biotechnology companies, in addition to the life science research market, in the developed and emerging markets. Healthcare Transportation
• Transportation: Under this segment, the company offers locomotives, rail services, digital solutions, mining equipment, as well as diesel
Lighting Capital
and gas engines.
• Capital: GE Capital business segment provides industrial-aligned financial structuring and product support in aviation (GECAS), energy Source: Annual Report
(EFS) and healthcare.
9.9 GENERAL ELECTRIC COMPANY – RELEVANT PRODUCTS 192
Reciprocating Engines
• GE has been recognized as a manufacturer in the development and production of gas engines for the efficient generation of power and heat.
• The company’s distributed power gas engines offer a diverse product portfolio that includes highly efficient, fuel-flexible, industrial gas engines generating 100 kW to
10 MW of power for numerous industries, globally.
• The products developed in the company are tested, and well-matched to each customer’s specific requirements. Moreover, essential components necessary for
reliable engine operation s, such as spark plugs, gas mixer, and engine controls are developed directly in Jenbach and Waukesha.
• Durable design and unsurpassed flexibility.

• These gas engines give a power range of 250 kW
• Designed to perform reliably in isolated, mission-
to 10 MW with fuel flexibility to run either on
critical, and demanding applications, such as in
natural gas or a number of other gases.
oilfield power generation, gas compression, or
• Suitable for a variety of commercial, industrial,
mechanical drive applications.
and municipal applications, particularly renewable
• Delivers a power output of 160 hp to 5,000 hp (100
and waste-to-energy, industrial power generation
kW to 3,600 kW).
JENBACHER GAS and cogeneration/combined heat and power WAUKESHA GAS
ENGINES ENGINES • Can run on a wide range of fuels including high-BTU
(CHP), and oilfield power generation.
hot fuels, shale gases, and variable quality field gas.
JENBACHER GAS ENGINES
1. Jenbacher Type 2 Gas Engine 2. Jenbacher Type 3 Gas Engines 3. Jenbacher Type 4 Gas Engines
• Offers high efficiency power with a robust design. • Long service intervals, a maintenance-friendly
• Characterized by high power density and
• The stationary engine concept provides engine design, and low fuel consumption
efficiency.
durability, while enhanced components and a ensures efficiency
• Enhanced control and monitoring provide easy
proven control and monitoring model give the • Jenbacher Type 3 engines offer proven savings
maintenance capabilities, as well as reliability
Type 2 engine outstanding reliability. on service and fuel consumption
and availability.
• Applicable heat sources include engine cooling • A range of applicable gas types increases the
• Major Products Offered:
water, oil, mixture gas, and exhaust gas. efficiency levels and reduces the industrial
• J412
• High-performance long-life spark plug for reliable emissions. Applicable gas types include natural
• J416
operation. gas, associated petroleum gas (flare gas),
• J420
• Applicable gas types include natural gas, propane gas, biogas, sewage gas, landfill gas,
associated petroleum gas (flare gas), propane coal mine gas, and other special gases (e.g.,
gas, biogas, sewage gas, landfill gas, coal mine coke, wood, and pyrolysis gases).
gas, and other special gases (e.g. coke, wood, • Major Products Offered:
and pyrolysis gases). • J312
Major Products Offered: • J316
• J208 • J320

JENBACHER GAS ENGINES
4. Jenbacher Type 6 Gas Engine 5. Jenbacher J624 6. Jenbacher J920 FleXtra
• The 1,500-rpm engine speed results in a high • Available with 2-stage turbocharging, offering • Superior Performance - Operating a Jenbacher
power density with low installation costs, and its high efficiency and improved flexibility, and can J920 FleXtra at 49.9% electrical efficiency level
pre-combustion chamber achieves high power up to 10,000 households. has the capacity to produce approximately 68
efficiency with low emissions. • Suited for operations in hot environments, and in million kWh of electricity.
• Can run either on natural gas or bio gas multiple engine power plants for independent • Modular design for flexibility.
Major Products Offered: power production, and combined heat and power • 2-stage technology.
• J612 (CHP) applications. • Quick startup for grid stabilization and easy
• J616 • Low specific fuel consumption reduces operating maintainability.
• J620 costs. • Has high power density at low investment costs.
• Flexible and modular design promotes ease of • It has a smaller carbon footprint and an
transportation and installation. ecomagination* certification, helping it to be
• 4.4 MW electrical output is achieved at 1,500 more energy-efficient.
rpm • Stable power output and reliable efficiency in any

ambient condition.

WAUKESHA GAS ENGINES
1. Waukesha VHP Series Engine and Generator Sets 2. Waukesha VGF Engines
• Durable, compact, and fuel-flexible VHP engines have a power output of • Can consistently perform under extreme conditions in a wide range of
120 kW to 800 kW (265 bhp to 1,175 bhp). power generation, gas compression, and mechanical drive applications.
• Can run either on natural gas or propane gas. • Durable, Compact, and Fuel-Flexible VGF engines have a power output
• Suitable for natural gas production applications. of 120 kW to 800 kW (265 bhp to 1,175 bhp).
• Wide turndown range available (700-1,200 RPM). • Can run either on natural gas or propane gas.
• Low emissions across varying applications. Major Products Offered:
• Hot-fuel tolerant. • VGF48 (Includes VGF48GSID, VGF48GL/GLD, VGF48GL
• Extended service intervals. (LCR))
Major Products Offered: • VGF36 (Includes VGF36GSID, VGF36GL/GLD, VGF36GL
• VHP9504GSI emPact (LCR))
• VHP7104GSI emPact • VGF24 (Includes VGF24GSID, VGF24GL/GLD, VGF24GL
• VHP7100GSI S4 emPact (LCR))
• VHP7100GL • VGF18 (Includes VGF18GSID, VGF18GL/GLD, VGF18L (LCR))
• VHP5904GSI emPact
• VHP5904LT • All models: ratings conform to ISO 3046/1 (latest version) with a
• VHP3604GSI mechanical efficiency of 90%

WAUKESHA GAS ENGINES
3. Waukesha 275GL+ Engine 4. Waukesha mobileFLEX
• Latest advancement from GE to deliver lower-cost, lower-emission power

to drill rigs, and artificial lift enhanced oil recovery and oilfield equipment.
• The 275GL+ lean-burn engine delivers fuel flexibility, efficiency, power
• The mobileFLEX engine portfolio is a power solution for drill rigs, liquids
output, and emissions for improved performance.
reinjection, lift pumps, and temporary accommodations.
• Ideal for rugged oilfield power generation and associated gas applications. • Operates on LNG, CNG HD-5 propane, and high-BTU field gases with
minimal gas treatment.
• High power output and efficiency.
• Lower operational costs, up to 80%, when compared to diesel.
• Provide low unburned methane, thereby, minimizing its carbon footprint • Operation on natural gases 950-1,650 BTU/ft3 HHV without component
and effect on the environment. changes and on propane gas 2600 BTU/ft3 HHV without component
• Ratings conform to ISO 3046/1 (latest version) with a mechanical changes.
efficiency of 90%. Major Products Offered:

• VHP7104GSI
Major Products Offered:
• VHP L7044GSI
• 16V275GL+ • VHP5904GSI
• VHP L5794GSI
• 12V275GL+
• All models: ratings conform to ISO 3046/1 (latest version) with a
mechanical efficiency of 90%.

9.9 GENERAL ELECTRIC COMPANY – RECENT DEVELOPMENTS 197
Jun 2018 Oct 2018 Oct 2018
GE signed an agreement to sell its Distributed

GE expanded the Waukesha VHP series
Power business to one of the largest and most
GE announced the latest enhancement to its five family of rich-burn gas engines, with
experienced global private equity investors,
Waukesha* 275GL+* lean-burn gas engines, the addition of the P9394GSI S5, rated
Advent International, for USD 3.25 billion.
the 275GL+ with ESM*2 to meet high at 2,500 horsepower (HP), which
horsepower gas compression needs. These includes the L7042GSI S5 at 1,500 HP
engines are offered in a 16-cylinder model, and L7044GSI S5 at 1,900 HP.
rated at 5,000 bhp, and a 12-cylinder model,
rated at 3,750 bhp.

9.9 GENERAL ELECTRIC COMPANY – ANALYST VIEW 198
GE’s decision to sell the Distributed Power business to Advent International (which is one of the most experienced global investors in these
sectors) is expected to help in strengthening GE’s capabilities for the benefit of its customers worldwide. Moreover, this transaction is expected
to not only accelerate the reinvestment in its business, but also enables Distributed Power to be best positioned to pursue its growth strategy.
Further, Advent has a strong global network, as well as extensive experience in carve-outs of large industrial companies that significantly
supports the Distributed Power business in expanding its market position and establishing a strong standalone entity.
“Over the years, GE has maintained a well-established relationship with the distributors and wholesalers, which has supplemented to the
growth of the company. The company's experience, combined with its strategic merger and acquisition activities, is likely to provide a
competitive edge against the rival companies, during the forecast period”
– Mordor Analysis

9.10 KAWASAKI HEAVY INDUSTRIES LTD – COMPANY OVERVIEW 199
Introduction: Headquartered in Japan, Kawasaki Heavy Industries, along with its subsidiaries, engages in ship and offshore
structure, rolling stock, aerospace, gas turbine and machinery, plant and infrastructure, motorcycle and engine, and precision
machinery businesses. Moreover, the company provides innovative products and services as well as integrates diverse, high-
level technologies. It supplies its products in Japan, the United States, Europe, and Asia. Founded in 1878
The company provides gas engines under its Gas Turbine and Machinery segment. In 2007, Kawasaki Green Gas Engine
achieved the world record for generating efficiency. Tokyo,
HQ Japan
Financial Overview Operations: Japan,

Asia/Oceania, the Americas,
Europe, and Middle East
Net Sales in JPY billion, 2015-2017 Net Sales (%), by Region, 2017
6.6% Revenue (2017)

1,541.00 Japan United States JPY 1518.80 billion
1,518.80
14.5%
in JPY billion
~35,127 Employees
42.7% Europe Asia
1,486.10 11.7%
+81-3-3435-2111
Other Areas
24.4%
2015 2016 2017

global.kawasaki.com

9.10 KAWASAKI HEAVY INDUSTRIES LTD – BUSINESS OVERVIEW 200
Kawasaki Heavy Industries Ltd: Operating Segments Net Sales (%), by Operating
Segment, 2017
Ship and
Gas Turbine Plant and Motorcycle Precision Other
Aerospace Offshore Rolling Stock
and Machinery Infrastructure and Engine Machinery Segments 5.1%
Structure
10.2%
6.8%
• Aerospace: Under this segment, the company provides aircraft to the Japanese Ministry of Defense and component parts for 9.0%
commercial aircraft, commercial helicopters, and missiles/space equipment.

• Gas Turbine and Machinery: Kawasaki’s Gas Turbine and Machinery segment offers jet engines, industrial-use gas 20.6% 21.7%
turbines/cogeneration systems, gas engines, diesel engines, steam turbines for marine and land, and aerodynamic
machineries/ marine propulsion systems.
10.6%
• Plant and Infrastructure: The company’s Plant and Infrastructure segment provides industrial plants (cement, fertilizer, etc.), 15.9%
power plants, LNG tanks, municipal waste incineration plants, tunnel boring machines, and crushing machines.
• Motorcycle and Engine: Under this segment, the company offers motorcycles, utility vehicles, all-terrain vehicles (ATVs),
Ship and Offshore Structure
personal watercrafts (PWCs), and general-purpose gasoline engines.
Rolling Stock
• Precision Machinery: The Precision Machinery segment provides hydraulic components for the construction of machineries, Aerospace
hydraulic components and systems for industrial machineries, marine steering gears, hydraulic deck machineries, and Gas Turbine and Machinery
industrial robots, medical, and pharmaceutical robots. Plant and Infrastructure
• Ship and Offshore Structure: The company’s Ship and Offshore Structure offers LNG carriers, LPG carriers, bulk carriers, Motorcyle and Engine
and submarines. Precision Machinery

Other Segments
• Rolling Stock: Under this segment, the company provides electric train cars, including Shinkansen (bullet trains), electric and
diesel locomotives, passenger coaches, and bogies. Source: Annual Report

9.10 KAWASAKI HEAVY INDUSTRIES LTD – RELEVANT PRODUCTS 201
GREEN GAS ENGINES
STANDARD MODEL HIGH EFFICIENCY MODEL

ENGINE MODEL KG-12 KG-18 KG-12-V KG-18-V
Number of
12 18 12 18
Cylinders
Frequency
50 60 50 60 50 60 50 60
(Hz)
RPM 750 720 750 720 750 720 750 720

Features
Electric Output 5,2
5,000 7,800 7,500 5,200 5,000 7,800 7,500
• Low operating costs and low emissions (Kw) 00
Efficiency at
• Ideal for power generation and simple cycle or combined Generator 49.0 49.5
heat and power (CHP) applications. Terminal (%)
• The Kawasaki Green Gas Engine lineup includes types Ignition System Spark plug ignition
with a single unit capacity in the 5 MW class (12 cylinders) Minimum

Continuous
and 8 MW class (18 cylinders). 35
Operation Load
(%)
• The lineup comprises of two models: a standard model with
high generating efficiency of 49.0% and a high-efficiency Starting Time Within 10 minutes
model, which improves the generating efficiency to

49.5%.

9.10 KAWASAKI HEAVY INDUSTRIES LTD – RECENT DEVELOPMENTS 202
July 2017
Kawasaki Heavy Industries Ltd received an

order for three Kawasaki Green Gas Engines
from Jurong Engineering Limited (JE). These
engines were used in the company’s Berkprai
Cogeneration Project in Thailand.

9.10 KAWASAKI HEAVY INDUSTRIES LTD - ANALYST VIEW 203
The company reinforced the development of new products and businesses that primarily focus on system solutions and high-value-added
products that use concurrent engineering, while promoting the development of fundamental and core technologies. Moreover, the company
has continuously promoted its capital investments to strengthen the business foundations and for the expansion of its geographical reach.
As a part of its expansion plan, the company is planning to strengthen its ability to sell solutions that meet customer requirements, improve
engineering, procurement, and construction (EPC) capabilities, expand international energy business, establish an integrated business
structure, and use internal resources effectively. These factors are expected to enable the company to develop energy and environmental
engineering business in the near future.
“As one of the integrated technology leaders, Kawasaki is committed to provide high-performance products and services of superior safety
and quality, thereby maintaining its customer relationships. Moreover, the company secured market superiority and higher added value by
providing optimal solutions. It is primarily focusing on partnerships and joint ventures, in order to achieve greater dominance in the market.”
– Mordor Analysis

9.11 JFE ENGINEERING CORPORATION – COMPANY OVERVIEW 204
Introduction: Headquartered in Japan, JFE Engineering Corporation provides engineering services in the areas of energy and
environment, urban infrastructure, and industrial machinery. Established in 1912, the company was formerly known as NKK
Corporation, and changed its name to JFE Engineering Corporation in 2003. It is the comprehensive engineering subsidiary of
the JFE Group and as of 2001, the company started operating as a subsidiary of JFE Holdings Inc. The company primarily deals
with steelmaking and shipbuilding businesses, however, it expanded its engineering business by evolving its technologies as well
Established in 1912
as by using a wide variety of energy utilization methods, including natural gas plants and pipelines and a power generation plant,
which is fueled by waste and sewage sludge.
Tokyo,
Furthermore, the company is engaging in renewable energy projects, catering to various areas, such as biomass energy, HQ Japan
geothermal power engineering, and photovoltaic generation. It expanded its engineering business to cater to the requirements of
medical and agricultural fields. Operations: Asia-Pacific,
Financial Overview Saudi Arabia, United States,
and Germany.
Net Sales (%), by Operating Companies*,
Net Sales in JPY billion, 2015-2017
2017
Revenue of JFE
Holdings Inc. (2017)
3,678.61 JPY 3678.6 billion
Steel
in JPY billion
~9,000 Employees
3,431.70 38.0%
Engineering
3,308.99
54.1%
+81-3-3597-3842
Trading
7.8%
2015 2016 2017
http://www.jfe-eng.co.jp/en/
Note: *Excluding Other Adjustments

9.11 JFE ENGINEERING CORPORATION – RELEVANT PRODUCTS 205
GAS ENGINE POWER GENERATION EQUIPMENT
E3G Gas Engine

Dual Fuel Engine
• Gas combustion engine was developed based on the highly reliable and widely • The company provides dual fuel engine that can switch between diesel and gas
adopted PC Diesel Engines. Features
• Improves fuel security through the dual fuel system.
• Achieves high efficiency and low NOx emissions.
• Reduces power generation suspension time through the modification of existing
Features equipment.
• It is the first engine of its class to adopt exhaust gas recirculation (EGR) • Reduces power generation cost.
system, which reduces NOx emissions and increases efficiency and output, • Achieves environmental protection measures, and thereby, reduces the
primarily by extending the knock limit. emission of CO2, SOx, and Nox.
• Extends the life-span of existing equipment.
• A spark plug system is adopted for the bore apparatus, and therefore, fuel oil
for ignition is no longer required.

9.11 JFE ENGINEERING CORPORATION – RELEVANT PRODUCTS 206
GAS COGENERATION
• The company designs and offers optimum models, such as decentralized

power generation systems, and contingency solutions that are a part of the
plant’s BCP, mainly in case of an electric power shortage or other disasters.
• Till date, the company supplied more than 100 gas engine cogeneration
systems, globally.
• Furthermore, it offers expertise for the transformation of existing diesel power
generation equipment into gas systems and provides full support regarding the
usage of natural gas.

9.11 JFE ENGINEERING CORPORATION – KEY PROJECTS 207
BIOMASS TREATMENT (SHENYANG, CHINA)
• The Shenyang Project is one of the projects targeted at 30 cities in China, designated as a critical model for
the treatment of kitchen waste from restaurants in the twelfth 5-Year Plan, which focuses on economic
growth, promoted by the Chinese government.
• The company, along with a local environmental engineering company, is working to treat the 200 ton of raw
garbage disposed from restaurants per day
• Core technologies for the project.
• Digestion tank stirrer

Restaurant Kitchen waste methane
• Biogas biological desulfurizer
fermentation and power generation model
project for Shenyang • Gas engine power generation system

9.11 JFE ENGINEERING CORPORATION - ANALYST VIEW 208
Since its inception, the company focused on becoming one of the world’s leading engineering companies that address ever-changing needs of
their customers. In order to achieve this, the company expanded its engineering business in the fields of energy and environment, by evolving
its state-of-the-art technologies, accelerating localization, and focusing on areas where the company has competitive advantage.
The company has been continuously working together with various international companies, primarily to expand its global reach. It is making
steady progress by developing systems for overseas businesses, contributing to the infrastructure creation in Southeast Asia, expanding
renewable energy power generation business and electric power sales, and steadily improving proposal-based integrated services that focus
on the environment.
“The company’s engineering business had grown significantly over the years, primarily due to its expansion into the operations
management, mainly in electricity, water, and sewerage sectors. Currently, it is focusing on enhancing its brand value, by upgrading facilities
and refining the company’s strengths in technology and products, including gas engines. Moreover, it is improving its global engineering
structure through M&A as well as by expanding overseas business by accurately grasping the needs in the emerging markets.”
– Mordor Analysis

9.12 LIEBHERR GROUP – COMPANY OVERVIEW 209
Introduction: Liebherr Group is one of the largest manufacturers of construction machinery. The company is an
acknowledged supplier of technically advanced products and services in many fields. It operates through eleven business
divisions, including earthmoving, mining, mobile cranes, tower cranes, concrete technology, maritime cranes, aerospace and
transportation systems, machine tools and automation systems, domestic appliances, components, and hotels. It offers its
gas engines under the Components segment. The product portfolio of its gas engines ranges from 4-cylinder in-line to 20-
cylinder V-engines. All the gas engines are designed to be used in combined heat and power units for biogas plants. As the Founded in 1949
divisional controlling company, Liebherr Component Technologies AG, Switzerland, coordinates all activities of its
Components segment.
Freiburg,
HQ Switzerland
Financial Overview
Total Revenue in EUR billion, 2015-2017 Revenue share (%), by Region, 2017
South America, Europe,
4% Middle East and Africa, and
9.84 Africa Asia-Pacific
16% Americas 43,869 Employees

In EUR billion
9.23 Far East/ Australia

9 Revenue (2017)
13% Near and Middle
54% EUR 9.84 billion
East
Eastern Europe
10% 3% + 41-26-913-3111
Western Europe
2015 2016 2017
Source: Annual Report Source: Annual Report www.liebherr.com

9.12 LIEBHERR GROUP – BUSINESS OVERVIEW 210
BUSINESS DIVISIONS
Segment, 2017
• Earthmoving: Under this division, the company produces earthmoving machines, material handling machines, and
4%
special purpose civil engineering machines. It distributes these products across Europe, Asia, and South America.
2% 10%
• Mining: Under this division, the company develops and produces mining equipment at plants in Europe and the United 25%
States. This equipment includes machines for extracting raw materials.
14%
• Mobile Cranes: The company provides high performance mobile cranes and crawler cranes under this division. In 9%
7%
addition to the production plants in Germany and Austria, the mobile cranes division of the Liebherr Group has a
6% 21%
worldwide sales and service network. 2%
• Tower Cranes: Under this division, the company produces tower cranes in all systems and size classes and a wide
range of mobile construction cranes. Furthermore, it provides in-depth project consulting services. Earthmoving
Mining
• Concrete Technology: The product range in this division includes truck mixers, concrete mixing plants, and concrete Mobile Cranes
Tower Cranes
pumps. The concrete technology division operates production plants in Europe, Asia, and South America. Concrete Technology
Maritime Cranes
• Maritime Cranes: The maritime cranes division produces different cranes for goods handling. The product portfolio Aerospace and Transportation Systems
include ship cranes, pontoon cranes, and barge cranes. Machine Tools and Automation Systems
Domestic Appliances
• Machine Tool and Automation Systems: The company produces gear cutting machines, gear cutting tools, and Components and Hotels
automation systems. They are produced in Germany, Italy, India, and the United States.

9.12 LIEBHERR GROUP – BUSINESS OVERVIEW 211
• Aerospace and Transportation Systems: The division develops innovative system solutions for aerospace and rail industries, and has customer-oriented
production plants all over the world.
• Components: Under this division, the company produces components for mechanical, hydraulic, and electric drive and control systems. These components are
produced in Germany, Switzerland, China, and Mexico. The comprehensive range of components include diesel and gas engines, fuel injection systems, motor
control units, axial piston pumps and motors, hydraulic cylinders, gearboxes, and electronic and power electronic components, among others.
• Domestic Appliances: Under this division, the company develops innovative cooling technologies for private and commercial use. The company’s refrigerators
and freezers are primarily produced in Europe.
• Hotels: Under this division, the company operates a total of six first-class hotels in Ireland, Austria, and Germany.

9.12 LIEBHERR GROUP – RELEVANT PRODUCTS 212
Gas Engines
G924 G926 G934 G944

Specifications: Specifications: Specifications: Specifications:
• Power Rating at 50Hz/ • Power Rating: 90.1 kW/ • Power Rating at 50Hz/ • Power Rating at 50Hz/
60Hz: 59.8 kW/ 98.1 kW 147.6 kW 60Hz: 145 kW/ 145 kW 60Hz: 164 kW/ 164 kW
• Rated Speed: 1500 rpm • Rated Speed: 1500 rpm • Rated Speed: 1500 rpm / • Rated Speed: 1500 rpm /
• Fuel: Biogas/ Natural gas/ • Fuel: Biogas/ Natural gas/ 1800 rpm 1800 rpm
Special gas Special gas • Fuel: Biogas/ Natural gas/ • Fuel: Biogas/ Natural gas/
• Mechanical Efficiency: • Mechanical Efficiency: Special gas Special gas
34%/37% 34%/37% • Mechanical Efficiency: • Mechanical Efficiency:
41.5% 41.5%

9.12 LIEBHERR GROUP – RELEVANT PRODUCTS 213
Gas Engines
G946 G9508 G9512 G9620

Specifications: Specifications: Specifications: Specifications:
• Power Rating at 50Hz/ • Power Rating at 50Hz/ • Power Rating at 50Hz/ • Power Rating at 50Hz/
60Hz: 246 kW/ 246 kW 60Hz: 339 kW/ 355 kW 60Hz: 516 kW/ 600 kW 60Hz: 1070 kW/ 1070 kW
• Rated Speed: 1500 rpm/ • Rated Speed: 1500 rpm/ • Rated Speed: 1500 rpm / • Rated Speed: 1500 rpm /
1800 rpm 1800 rpm 1800 rpm 1800 rpm
• Fuel: Biogas/ Natural gas/ • Fuel: Biogas/ Natural gas/ • Fuel: Biogas/ Natural gas/ • Fuel: Biogas/ Natural gas/
Special gas Special gas Special gas Special gas
• Mechanical Efficiency: • Mechanical Efficiency: • Mechanical Efficiency: • Mechanical Efficiency:
41.7% 41.5% 42.5% 44%

9.12 LIEBHERR GROUP - RECENT DEVELOPMENTS 214
Mar 2018
The company participated at the International Power

and Generating Set Exhibition (G-Power) in Shanghai.
Within the framework of the show, the company
presented its gas engine portfolio to the Chinese
genset and combined heat and power markets. Its high
performing gas engines fulfill the demands of decentral
energy supply plants, and are optimally designed for
non-stop operation in the CHP units, biogas plants, and
gensets. Furthermore, the company featured its
megawatt-class engine - G9620- at the show.

9.12 LIEBHERR GROUP – ANALYST VIEW 215
In 2017, the company invested EUR 558 million in R&D. A bulk of these investments was utilized to develop new products. A large
number of joint research projects with various universities and research institutes were initiated and continued.
“As a high-tech company, Liebherr continues to pursue the goal of making a decisive contribution in shaping the technological
progress in sectors relevant to the Group. The company is strategically investing in the expansion of its global distribution and
service network, primarily to remain as a reliable partner.”
– Mordor Analysis

216
10.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
10. COMPETITIVE LANDSCAPE

10.2 Strategies Adopted by Leading Players

10.1 MERGERS AND ACQUISITIONS, JOINT VENTURES, COLLABORATION, AND AGREEMENTS 217
YEAR DEVELOPMENT
Weichai Power Co. Ltd and PJSC KAMAZ, a Russian heavy-duty vehicle manufacturer, entered into a joint venture (JV) on a parity basis for the
production of industrial engines in Russia. The JV company, KAMAZ VEYCHA LLC, which specializes in the production of industrial diesel and
Sep 2018
natural gas engines with a capacity of more than 17 liters, is planned to be located in the free areas of the KAMAZ subsidiary in the Yaroslavl
Region.
GE entered into an agreement to sell its Distributed Power business, which includes Distributed
Jun 2018 Power’s Jenbacher and Waukesha engines, as well as manufacturing sites in Austria, Canada,
and the United States, to Advent International for USD 3.25 billion.
GE signed a supply deal for 21 Jenbacher gas engines -10 J320 units, 10 J420 units, and one J316 unit, having a total capacity of 26- with the
Apr 2018
GreenTech Energy Company (GTE). These gas engines are expected to be delivered by the end of 2018.
MAN Diesel & Turbo, along with Hyundai Heavy Industries, announced its plan to build a new test-engine facility in Ulsan, South Korea. The new
Mar 2018 venture with the engine and machinery division of Hyundai Heavy Industries (HHI-EMD) aims to expand the MAN Diesel & Turbo’s R&D testing
capacity, and thereby, strengthening the development of dual fuel gas engines. The test and gas facility is expected to be operational in 2019.

10.2 STRATEGIES ADOPTED BY MAJOR PLAYERS 218
Caterpillar Inc. Cummins Inc.
Cummins Inc. emerged from the string of six year-over-year

declines, despite its largest business segment recording the
Caterpillar Inc. is planning to make additional investments, company’s smallest first-quarter revenue increase at 2.4% in
primarily in R&D, for expanding its product portfolio and associated 2017. In the period of constrained financial output, the company
aftersales and services. In addition, the company is actively undertook several initiatives, including the strategy of business
pursuing the strategy of remaining open to possible mergers and restructuring and brand consolidation across the power
acquisitions across the entire value chain of the engine business, generation equipment business, primarily to ensure sustained
in a bid to emerge as a dominant player with a strong brand value. profitability. In 2019, the company is expected streamline its
business, reduce the cost of manufacturing to ensure greater
profitability, and consolidate its Cummins, Cummins Power
Generation, and Cummins Onan brands into a single brand.

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Report Global Gas Engine Market

1. EXECUTIVE SUMMARY 5. VALUE CHAIN ANALYSIS

2. RESEARCH METHODOLOGY 6. INDUSTRY ATTRACTIVENESS: PORTER'S FIVE FORCES ANALYSIS

2.1 Scope of the Study 6.1 Bargaining Power of Suppliers

2.2 Market Definition 6.2 Bargaining Power of Consumers

2.3 Study Assumptions 6.3 Threat of New Entrants

2.4 Study Deliverables 6.4 Threat of Substitutes

2.5 Research Phases 6.5 Degree of Competition

3. MARKET OVERVIEW 7. MARKET SEGMENTATION AND ANALYSIS - BY TYPE (Overview, Market

Report Global Gas Engine Market

8. REGIONAL MARKET ANALYSIS - BY GEOGRAPHY (Overview, Market

9.1 Caterpillar Inc. 10.2 Strategies Adopted by Leading Players

9.2 Cummins Inc. 11. DISCLAIMER

9.4 Rolls-Royce Holdings PLC

9.5 Wartsila Oyj Abp

9.6 Mitsubishi Heavy Industries Ltd

Report Global Gas Engine Market

Report Global Gas Engine Market

Report Global Gas Engine Market

2.1 Scope of the Study

2.2 Market Definition

2. RESEARCH METHODOLOGY 2.3 Study Assumptions

2.4 Study Deliverables

2.5 Research Phases

Report Global Gas Engine Market