EU Market

EU Market Overview

The following section summarises the results of the market assessment performed in the framework of the BIOTURBINE project. Thereby, information on about 170 installed microturbines in EU countries has been compiled, and a further 40 microturbines are scheduled to be installed in 2003.

Today, the use of microturbines in EU countries is at the beginning of its development and a microturbine market is hardy existing. Many companies are testing this new technology in order to determine its features and possibilities for application, but these installations are not fully commercial services. In order to achieve market progress, it is necessary to remove several barriers and, most importantly, to demonstrate the capability of the microturbine technology to potential private and public customers. It has to be further documented and proven that this technology is a reliable option with adequate investment costs and reasonable payback time for investment.

Currently, main problems limiting the growth of the microturbine market are the lack of suitable regulations for systems with low power output, bureaucratic procedures concerning the interconnection with the grid, unproven reliability as well as an unfavourable ratio of natural gas and electricity prices in most EU countries. For these reasons is very difficult today to realise reasonable and guaranteed payback times for investment. Therefore, the main effort for further development of the market has to be oriented to solve problems in the following fields:

•    Low efficiency of the fuel-to-electricity conversion, low reliability of the microturbine component, short life time

•    High investment costs, high maintenance costs

•    Market transformation (today, national energy concepts are mainly oriented to centralized energy production)

•    Lack of suitable regulations for systems with low power output

•    Interconnection to the electric grid

•    Market stimulation for bio-fuels in order to create opportunities for bio-fuel driven microturbines in Europe, taking advantage of EU environmental protection incentives

•    Lack of customer awareness

Installed Microturbines in the EU

The figure shows the market data of microturbine installations in the 15 EU countries plus Norway and Switzerland (about 170 units), which have been directly identified in the framework of the BIOTURBINE market assessment.

It can be seen that only in the UK a significant microturbine market has evolved, whereas in all other EU countries the market is in its very early stages. Nevertheless, it is possible to distinguish EU countries with a microturbine market of ‘almost zero’, such as Austria, Sweden, Norway, Portugal, Belgium, Finland, Greece and Luxemburg, from countries which have started to implement commercial microturbine systems and which have already gathered significant operational experience, such as Denmark, the Netherlands, Ireland, Germany, Italy, Spain and France.

It can be concluded that the development of a microturbine market in EU countries will in the next few years significantly depend on the natural gas and electricity price ratio, a further reduction of the investment and O&M costs of microturbine systems as well as the level of Governmental support.

In the following figure, the total numbers of installed microturbines in the 15 EU countries plus Norway and Switzerland have been estimated from the numbers of directly identified systems. This estimation paid due respect to the overall framework conditions and the level of competitiveness of the microturbine technology in different EU countries. Nevertheless, the market figures presented are subject to an error margin and serve as an estimated upper limit of the current microturbine market, which is difficult to assess in detail due to confidentiality concerns afflicting this developing market.

By the end of 2003, the upper limit for the microturbine market in Europe is estimated at about 300 installed units.

Market Share by Microturbine Producer

The microturbine sales figures compiled in this study indicate that the most active producer on the EU market is the Swedish producer Turbec (sold to Italian-based API Com srl. on December 30th 2003) closely followed by Bowman Power Systems. Capstone, the world leader in microturbine technology which holds approximately 85% of the market share worldwide, accounts for lower sales in the EU than expected. An explanation for this fact is that Capstone’s marketing policy is focused on non-european countries. Within the framework of this study, no detailed sales figures on the EU market have been provided by Capstone except for the information presented at the company web site. For the microturbine producers Elliot Energy Systems, Cummins Power Generation and IR Power Works it was not possible to obtain information about their sales in the EU. Therefore, these producers are not included in the figure below.

Market Share by Microturbine Application, Market Sector and Type of Fuel

From the information compiled through the evaluation of questionnaires within the BIOTURBINE project, it is evident that the vast majority of current microturbine applications is in the field of combined heat and power (CHP) production. Out of 52 investigated microturbine installations, only one is not used for CHP, but for remote power generation. Therefore, it can be concluded that CHP is currently the domination application of the microturbine technology on the European market.

With respect to the market sector, results of the present study show that out of 60 investigated microturbines, the residential sector accounts for 7 units, the commercial sector for 29 units and the industrial sector for 24 units. It therefore seems, that a larger market share is currently occupied by the combined commercial/residential sector as opposed to the industrial sector.

Following the argument presented in reference ‘Optimised Microturbine Energy Systems - OMES’ (FP5 Demonstration Project, Final Report – Work Package 8: Evaluation of market potential for small-scale CHP based on micro gas turbines; www.omes-eu.org) this trend favouring the commercial/residential sector will become more evident during the future development of the microturbine market for the following reasons:

•    Large number of locations in the commercial/residential sector have suitable heat and electricity demand profiles

•    The gap between cost for electricity and gas is larger than in the industrial sector

•    Lower demand for return of investment in public buildings and in the domestic sector

With respect to the type of fuel used, the large majority of microturbines today run on natural gas (50 out of 57, for the present study). This comes as no surprise, as natural gas is the recommended fuel specified by microturbine producers, and suitable supply infrastructure exists in most EU countries.

Nevertheless, activities are on-going in several EU countries to test the performance of microturbine systems running on landfill gas, digester gas and bio-gas. Moreover, several distributors indicated in their questionnaire, that they are highly interested in the use of alternative fuels for microturbines. The use of bio-gas as fuel thereby has the potential to provide future business opportunities though Governmental support provided, such as by the German Feed-in Law and the UK Climate Change Levy exemption.