Trends in the markets for Power Engineering
In the Power Engineering segment, we expect the market environment to remain difficult in 2021. The further course of the Covid-19 pandemic and its consequences bring additional uncertainty.
In 2021, the market volume for two-stroke engines used in merchant shipping is likely to reach a higher level than in the reporting period. An expected higher volume of sea trade, combined with calls for high energy efficiency and low pollutant emissions, will continue to have a significant influence on drive systems in the future. The market for four-stroke engines for cruise ships is likely to remain at a very low level due to the continuing very difficult liquidity situation. Demand in the passenger ferry segment – similarly affected by a loss of revenue – is also expected at a low level. We also expect demand to remain stable for government vessels and dredgers. In the offshore sector, new order volumes of special applications look set to be on the low side due to continued overcapacity. Overall, we expect the marine market to be at a slightly higher level than that seen in the reporting year with competitive pressure continuing unabated.
The Covid-19 pandemic has led to great uncertainty concerning likely energy demand in 2021. Initial signs point to a further slight decline in market volume. The global spread of the SARS-CoV-2 virus and the measures taken to contain it have reduced demand for energy and made it harder to raise capital for investment in energy generation plants. Despite this impact on the markets, we expect the trend towards decentralized power stations and gas-based applications to further intensify. In addition, demand for new and carbon-neutral technologies should continue to increase in future.
Potential projects in turbomachinery suggest that demand will stabilize in 2021 at the previous year’s level. However, the course of the Covid-19 pandemic brings substantial uncertainty to the decision-making process for capital expenditure. Favorable conditions in the capital markets and targeted state support facilitate such capital-intensive decisions. Lower capacity utilization of production facilities by market participants is expected. With the pandemic’s increasing duration, this may lead to more intense competition. In energy generation, we expect increasing growth in renewable energy sources, bolstered by state support. Fluctuations in the amount of electricity generated by these will necessitate an increase in storage capacity. We are therefore pushing the construction of pilot plants for thermal storage. This could lead to an expansion of the market for turbocompressors and turboexpanders.
We anticipate a slight recovery in 2021 both in the marine and power plant after-sales business for diesel engines and in the after-sales market for turbomachinery. There may be a temporary catch-up effect in order intake following the postponement of projects over the past year.
For the period 2022 to 2025, 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. It remains to be seen for how long the pandemic will continue to affect the market.