Trends in the markets for Power Engineering

We expect the market environment in power engineering to remain difficult in 2020, with continuation of the general tendencies seen in 2019.

In 2020, the market volume for two-stroke engines used in merchant shipping is likely to reach a higher level than in the reporting period. Calls for high energy efficiency and low pollutant emissions will continue to have a significant influence on ship designs in the future. We expect sustained stable demand in the market for four-stroke engines used in ferries, cruise ships, dredgers and government vessels. In the offshore sector, new order volumes of special applications look set to be on the low side due to existing overcapacity. Overall, we expect the marine market to be at a slightly higher level than that seen in the reporting period. The competitive pressure will continue unabated.

Demand for energy correlates strongly with macroeconomic and demographic trends, especially in emerging markets. The global trend toward decentralized power stations and gas-based applications shows no sign of losing momentum. For 2020, we expect demand to rise slightly for the gas sector in particular but to remain at a low level overall. On the whole, this low level of demand poses a major challenge for the new market with carbon-neutral technologies.

In turbomachinery, we expect to see continued strong demand in 2020, attributable to an investment backlog and also to stable commodity prices. High capacity utilization of production equipment by market participants can be expected, which is likely to bring about a further easing of competition. Energy generation is still marked by overcapacity on the part of electricity producers in industrialized countries, but due to the increase in investments for power generation using biomass and the use of natural gas as a transition source of energy, we expect a slight increase in demand for steam and gas turbines. Renewable energy sources in particular are expected to generate growth because their irregular electricity production will necessitate greater storage capacity. This is the reason the construction of pilot plants for thermal storage is being pushed, which in turn has led a build out of the market for turbocompressors and turboexpanders.

We anticipate a stable trend in the marine and power plant after-sales business for diesel engines in 2020. In turbomachinery, we expect a slight upward trend for the coming year. Particularly in the oil and gas sector we are seeing a positive trend resulting from the clearing of the investment backlog from recent years.

For the period 2021 to 2024, we expect to see growing demand in the power engineering markets. However, the extent and timing of this growth will vary in the individual business fields.