Report ID: PMRREP34557
Report Type: Ongoing
Format: PPT*, PDF, EXCEL
Industry: Industrial Automation
The US market for thermal power is expected to reach a value of US$213.4 Mn by 2024. It is projected to grow at a CAGR of 2.4% from 2024 to 2031, reaching a market value of US$251.9 Mn by 2031.
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Market Attributes |
Key Insights |
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Market Size (2024E) |
US$213.4 Mn |
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Projected Market Value (2031F) |
US$251.9 Mn |
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Forecast Growth Rate (CAGR 2024 to 2031) |
2.4% |
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Historical Growth Rate (CAGR 2019 to 2023) |
1.8% |
Key Trends Shaping the Market
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The US is home to numerous large utilities, and engineering procurement and construction firms with extensive expertise in setting up and maintaining thermal power assets.
States like Texas and Florida, which heavily rely on fossil fuel-based power generation, significantly contribute to sustaining the demand for thermal power. This reliance ensures a steady market for thermal power technologies, and services.
With this, the US continues to be the key market for thermal power globally. Several factors are driving the US thermal power market growth, including the economic expansion, and steady industrial activity.
Increased energy consumption, necessitating reliable power sources, will continue to drive demand in the US market for thermal power. Technological advancements in power generation, including improved efficiency and emission reduction technologies, are making thermal power more competitive.
The need for periodic maintenance and upgrades of the aging infrastructure reinforces the aftermarket for thermal power equipment, and services. A combination of these factors ensures that the market remains robust and continues to grow.
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Natural gas emerged as a leading source, making up about 40% of US electricity generation in 2022, while coal remained a significant contributor at around 18%.
Despite facing challenges from environmental concerns, coal-fired power plants continued to operate, with increasing pressure to adopt cleaner technologies.
Petroleum also played a small role in electricity generation. Renewables such as wind, solar, and hydroelectric power experienced significant growth, indicating a broader shift toward cleaner energy sources.
Looking ahead to the forecast, the market for thermal power in the US is poised for continued expansion, with evolving dynamics. Technological advancements, particularly in carbon capture and storage (CCS) technologies, are expected to mitigate environmental concerns associated with fossil fuel-based generation.
Renewable energy sources are projected to further gain traction, driven by declining costs and supportive government policies. The need for grid reliability and stability will drive investments in thermal power infrastructure, ensuring a balanced energy mix.
Despite the increasing prominence of renewables, natural gas is anticipated to maintain its position as a primary source of electricity generation, supported by its reliability and flexibility in meeting peak demand.
The market is set to adapt to changing energy landscapes while continuing to play a vital role in meeting the nation's growing energy needs.
In 2023, the industry witnessed notable progress in carbon emission reduction and grid upgrading. To reinforce the system, the industry increased the amount of solar electricity and energy storage that was installed.
Despite ongoing supply chain issues and mild winter weather that caused a 1.2% drop in electricity sales, the industry adapted quite well. Natural gas costs fell by 53%, lowering wholesale electricity prices, but consumer bills still increased.
This was due to high spending on grid upgrades and climate-related costs, with nearly US$171 Bn directed towards modernizing and decarbonizing the grid. Innovations in cooling technologies aimed to reduce water use.
These trends are expected to continue into 2024, further shaping the market. These innovations, coupled with a strong policy push towards decarbonization, are setting the stage for a more sustainable and technologically advanced market in the US.
Clean Energy Legislation, and Investments
In 2024, the momentum for clean energy transition is set to continue, driven by substantial legislative and financial support. The Inflation Reduction Act (IRA) led to over US$110 Bn in new clean energy manufacturing projects and at least US$122 Bn in clean energy generation projects by the time of its first anniversary in August 2023.
The Infrastructure Investment and Jobs Act (IIJA) awarded multiple billions in 2023 for grid reliability, battery supply chains, EV programs, and energy efficiency, with more funding expected.
These investments are catalysing advancements in renewable energy integration, energy storage, and grid modernization, significantly influencing the market as it adapts to a cleaner, more efficient energy landscape.
Technological Advancements, and Decarbonization Commitments
Technological innovation, and decarbonization commitments are key drivers for the US thermal power sector. A growing number of electric companies have committed to reducing carbon emissions by 80% by 2030, accelerating their timelines from the previous net-zero by 2050 goals.
Utility-scale solar installations are predicted to soar, with an additional 24 GW added in 2023, and another 36 GW anticipated in 2024. The capacity of grid-scale battery storage doubled to approximately 18 GW in 2023, and is expected to reach 32 GW in 2024, improving system flexibility.
Furthermore, the growing popularity of electric vehicles predicted to sell one million units annually by 2023 underlines the industries move towards digital solutions, and Artificial Intelligence (AI) to handle the intricate grid transformation difficulties.
Supply Chain Disruptions
Ongoing supply chain disruptions remain a significant restraint for the market. Despite some improvement, shortages of essential materials like steel, aluminum, and transformers continue to delay projects and increase costs.
These disruptions hamper the timely deployment of new infrastructure and maintenance of existing facilities, slowing the overall progress towards grid modernization and decarbonization goals.
Environmental and Regulatory Pressures
The market faces growing environmental and regulatory pressures. Stringent regulations on emissions and water usage require significant investments in cleaner technologies and compliance measures.
Innovations in cooling technologies and carbon capture, while necessary, add to the operational complexity and cost. Balancing regulatory compliance with economic viability remains a critical challenge for the sector.
Integration of CSS Technologies
The integration of CSS technology represents an essential opportunity. CCS has the potential to drastically reduce CO2 emissions from thermal power plants, aligning with sustainability goals.
Advancements in technology coupled with financial and tax benefits from the government are making CCS more feasible and profitable.
Retrofitting existing plants with CCS not only ensures compliance with environmental regulations but also positions thermal power as a cleaner energy source for the future, contributing to long-term sustainability efforts.
Development of Hybrid Energy Systems
The development of hybrid energy systems offers a strategic opportunity for the market to enhance reliability and efficiency. By integrating thermal power with renewable sources like solar and wind, hybrid systems can optimize resource utilization and reduce emissions.
These systems solve grid balancing issues by utilising the intermittent nature of renewable energy sources and the baseload capacity of thermal plants to deliver a steady power supply.
By making investments in hybrid energy systems, utilities can remain competitive in the ever-changing energy market and satisfy sustainable energy targets without sacrificing operational flexibility.
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Category |
Projected CAGR through 2031 |
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Fuel Type – Natural Gas |
2.5% |
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End-use – Industrial |
2.7% |
Predominance of Natural Gas in the US Thermal Power Landscape
The natural gas category holds the largest market share of the US thermal power industry, i.e., around 52%, primarily because of several contributing reasons.
The price of natural gas has become much more affordable due to the nation's large reserves, which also guarantee a steady supply of fuel to produce thermal power.
Advancements in extraction technologies, notably hydraulic fracturing (fracking), have further amplified natural gas production, thus driving down costs even more.
In comparison to coal and oil alternatives, natural gas-fired power plants provide greater versatility in operation and emit less greenhouse gases, which is in line with strict regulatory requirements and environmental concerns.
The versatility of natural gas as a fuel for both baseload and peaking power generation makes it a preferred choice for utilities aiming to address diverse energy demands efficiently.
Industrial Sector Dominance in the US Market
The market for thermal power in the United States is dominated by the industrial sector. For industrial facilities to support operations and manufacturing processes, a reliable and constant power supply is necessary.
Thermal power plants, particularly those fueled by natural gas, offer the necessary capacity and flexibility to meet the energy demands of industrial consumers.
Industrial facilities often operate around the clock, making them ideal customers for thermal power providers seeking consistent revenue streams.
The industrial sectors reliance on underscores its importance in driving market demand and shaping investment decisions within the US power industry.
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Region |
CAGR through 2031 |
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Northeast |
2.5% |
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Southwest |
2.0% |
Northeast to Account for the Most Significant Share
The northeast region stands out the primary contributors to the US market, showcasing a robust market share of 28%. The northeast’s dense population centers and extensive industrial activity create a significant demand for reliable power generation.
This demand is further fueled by the regions thriving urban areas and diverse economic sectors, ranging from manufacturing to technology.
The northeast has led the way in environmental stewardship, pushing for the enactment of strict laws intended to cut emissions and encourage the use of cleaner energy sources.
While renewable energy projects, such as solar and wind farms, are on the rise, thermal power remains indispensable for grid stability and meeting peak demand, especially during extreme weather events like heatwaves, or cold snaps.
The northeast has undergone substantial investments in energy infrastructure, such as the expansion of transmission networks and the refurbishment of old power facilities.
These investments ensure the regions continued reliance on thermal power, which is a key component of the regions power security and resilience.
Southwest Exhibits a Steady CAGR by 2031
The market for thermal power in the southwest US is projected to secure a CAGR of 2.0% in the forecast period from 2024 to 2031. The southwest region boasts a significant market share in the US sector, driven by distinctive developments and characteristics unique to the region.
The southwest region has a significant market share in the US economy because of noteworthy regional trends and characteristics. The regions energy diversity is influenced by its wealth of natural resources, particularly its enormous natural gas reserves and an aplenty of sunlight for solar energy production.
The southwest is a significant region in the sector and is well-positioned to meet the regions rising energy demands owing to its rich resource base.
The southwests expanding industrial base and population necessitate a steady and reliable supply of power. Thermal power is crucial to meet these demands and to offer the capacity and flexibility needed to support industrial activity and urban expansion.
While renewable energy projects are gaining traction, thermal power remains a cornerstone of the regions energy portfolio, ensuring grid stability and reliability.
Investments in grid modernization and energy infrastructure further reinforce the southwests reliance on it. These investments not only enhance the efficiency and resilience of the regions power grid but also pave the way for future growth and development.
There is a significant change taking place in the market. Once dominated by coal-fired power facilities, natural gas, and renewable energy sources are now in competition with one another to shape the landscape natural gas.
The multiple advantages include smooth integration with renewable energy sources, constancy as baseload power, and short ramp-up and ramp-down durations in response to variations in demand.
However, the elements like the price of natural gas and laws designed to reduce carbon emissions will determine its destiny. Conversely, declining costs and government incentives are driving a large development in renewables.
Although wind and solar energy are weather-dependent, advances in battery storage technology could help to mitigate this problem.
The market is moving towards increased integration of renewable energy sources, lower emissions, and increased efficiency.
Major Companies are concentrating on technological developments, strategic mergers and acquisitions, and partnerships to fortify their positions in the market and adapt to the shifting needs of the energy industry.
The future of the market will likely involve a balanced mix of these sources, with the specific proportions depending on technological advancements, environmental policies, and economic considerations.
April 2024
TotalEnergies, announced a significant expansion of its natural gas production in the United States. The project is expected to increase TotalEnergies' net US natural gas output by 50 million cubic feet per day (Mcf/d) in 2024, with the potential for an additional 50 Mcf/d by 2028. This represents a substantial increase from their 2023 net US output of approximately 340 Mcf/d
December 2022
Competitive Power Ventures (CPV) announced plans to construct a state-of-the-art, 1.8 GW natural gas power plant in Doddridge County, West Virginia. This US$3 Bn project will incorporate carbon capture technology, showcasing advancements in cleaner thermal power generation.
May 2022
JERA Co., Inc., a leading Japanese energy company, acquired the Canal and Bucksport thermal power stations in Massachusetts and Maine, respectively. These natural gas-fired plants boast a combined capacity of 1.63 GW, enough to power roughly 1.6 million homes. This acquisition demonstrates the continued interest in reliable baseload power generation that natural gas provides.
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Attributes |
Details |
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Forecast Period |
2024 to 2031 |
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Historical Data Available for |
2018 to 2023 |
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Market Analysis |
US$ Billion for Value |
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Key Country Covered |
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Key Market Segments Covered |
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Key Companies Profiled in the Report |
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Report Coverage |
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Customization & Pricing |
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The expansion of renewables has an impact on the US market. Thermal power is still significant, though, because of the infrastructure that is already in place and the consistent baseload supply.
Some of the key players operating in the market are Dominion Energy, NextEra Energy, Duke Energy, Southern Company, WEC Energy Group Inc., and The AES Corp.
The natural gas segment records a significant market share.
Utilization of biomass and waste-to-energy technologies, and the integration of carbon capture and storage (CCS) technologies are estimated to present opportunities for the market players.
The southeast region is poised to account for the significant share of the market.
