Gas Turbines in Thermal Power Market to Reach USD 30 Billion by 2035 at 2.83% CAGR Amid Energy Transition

The gas turbines in thermal power market is expected to witness steady growth in the coming years as nations balance the transition to low-carbon energy while meeting growing electricity demands. Valued at USD 22.07 billion in 2024, the market is projected to reach USD 30 billion by 2035, expanding at a compound annual growth rate (CAGR) of 2.83% between 2025 and 2035. Gas turbines continue to play a crucial role in thermal power generation, offering efficiency, reliability, and the operational flexibility needed to complement variable renewable energy sources.

Market Drivers

Rising Global Electricity Demand

As global populations expand and industrial activity grows, particularly in emerging economies, the demand for electricity continues to rise. Gas turbines offer a reliable solution to scale up power generation capacity quickly, especially in areas where baseload or peaking power is required.

Transition Toward Cleaner Power Generation

Gas turbines are increasingly favored over coal-fired power plants due to their lower greenhouse gas emissions and faster start-up capabilities. As countries implement stricter emissions regulations and aim to phase out coal, gas-based thermal power generation is emerging as a cleaner alternative during the energy transition.

Flexibility and Grid Stability

The flexibility of gas turbines in ramping up or down quickly makes them ideal for balancing intermittent renewable energy sources such as wind and solar. This role as a backup and stabilizing force on the grid is a major driver of gas turbine deployment in thermal power plants.

Technological Advancements in Turbine Efficiency

Innovations in turbine design, such as advanced materials, aerodynamics, and combustion technology, are significantly improving gas turbine efficiency, reducing fuel consumption, and minimizing emissions. These enhancements are boosting the appeal of gas turbines for new and repowering projects.

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Key Market Trends

Shift Toward Combined Cycle Power Plants

Combined cycle gas turbine (CCGT) power plants are gaining traction for their superior efficiency compared to open cycle systems. By capturing and reusing waste heat to generate additional electricity, CCGTs can achieve efficiency levels exceeding 60%, making them a preferred choice for new installations.

Growing Focus on Hydrogen-Fueled Turbines

With the rise of green hydrogen initiatives, manufacturers and utilities are investing in gas turbines capable of operating on hydrogen or hydrogen-natural gas blends. This trend aligns with global decarbonization goals and opens pathways for the long-term sustainability of thermal power.

Digitalization and Predictive Maintenance

The adoption of digital monitoring and predictive analytics is improving the operational performance of gas turbines. Real-time diagnostics, remote performance tracking, and AI-driven maintenance are helping plant operators reduce downtime and extend equipment life.

Retrofitting and Repowering Aging Plants

Aging thermal power infrastructure across developed economies is being retrofitted with new, high-efficiency gas turbines to improve plant performance and meet updated emission standards. Repowering existing coal or oil-fired plants with gas turbines is an emerging trend in regions undergoing energy modernization.

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Regional Analysis

North America

North America holds a mature and technologically advanced gas turbine market. The U.S. continues to invest in gas-fired thermal power to replace retiring coal plants and support grid stability amid growing renewable integration. The region is also at the forefront of hydrogen co-firing pilots and gas turbine R&D.

Europe

Europe is focusing on gas turbines as a transitional energy source to meet its ambitious carbon reduction targets. The phase-out of coal across several EU countries is creating demand for modern gas-based thermal plants. Additionally, efforts to blend hydrogen into existing gas-fired units are gaining momentum.

Asia-Pacific

Asia-Pacific is the fastest-growing regional market, led by countries like China, India, Japan, and Southeast Asian nations. Rapid industrialization, urban expansion, and increasing electricity consumption are driving the installation of gas turbines. Japan is also investing heavily in hydrogen-capable turbine systems to decarbonize its power sector.

Middle East & Africa

The Middle East’s abundant natural gas resources and its focus on diversifying energy sources are driving the adoption of gas turbines. Countries like Saudi Arabia and the UAE are expanding gas-based generation capacity to support economic diversification and energy security. Africa, while slower in adoption, is witnessing increased deployment of gas turbines in Nigeria, Egypt, and South Africa for expanding access to reliable electricity.

Latin America

Latin America is gradually adopting gas turbines for thermal power, with Brazil, Mexico, and Argentina leading in new projects. Economic reforms, growing electricity demand, and regional gas discoveries are fueling interest in expanding gas-fired capacity in the region.

Challenges and Constraints

Volatile Natural Gas Prices

Gas turbine operations are highly sensitive to natural gas prices. Fluctuating fuel costs can impact the operational cost-effectiveness of gas-based thermal power, especially in markets without long-term supply contracts or price stability mechanisms.

Environmental Concerns and Carbon Emissions

While gas is cleaner than coal, it is still a fossil fuel and subject to environmental scrutiny. Increasing pressure from climate-conscious stakeholders could challenge the long-term viability of gas turbines without substantial emissions mitigation technologies or a shift to renewable gases like hydrogen.

High Capital Costs and Long Payback Periods

Installing large-scale gas turbines requires significant capital investment, and financial viability often depends on regulatory support, capacity markets, or long-term power purchase agreements (PPAs). This can be a constraint in regions with limited funding or uncertain regulatory environments.

Infrastructure and Supply Chain Constraints

Developing new gas turbine power plants or converting existing facilities can be delayed by infrastructure bottlenecks such as inadequate gas pipelines, transmission networks, or limited access to skilled labor. Global supply chain disruptions can further exacerbate project timelines.

Opportunities

Integration with Renewable Energy

As renewables continue to grow, gas turbines offer the opportunity to complement wind and solar power by filling supply gaps and maintaining grid frequency. Hybrid models combining renewables with gas turbines present new business opportunities for utilities.

Green Hydrogen as a Fuel Source

The potential of hydrogen as a clean-burning fuel offers a transformative opportunity for gas turbines in thermal power. Continued R&D and infrastructure investments in hydrogen could allow existing gas turbines to transition toward zero-carbon operations, keeping them relevant in future energy systems.

Government Support for Clean Thermal Energy

Many governments are offering incentives, tax credits, and supportive policies for clean energy transition technologies. Gas turbines, especially those tied to combined cycle systems or capable of hydrogen use, are likely to benefit from these evolving policy frameworks.

Emerging Markets Electrification

Expanding electrification in underpowered regions, especially in parts of Asia and Africa, represents a major growth frontier. Gas turbines can provide fast and reliable power in these markets, particularly when integrated with modular or mobile thermal units.

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The gas turbines in thermal power market is steadily evolving as a critical enabler of global electricity generation. Projected to grow to USD 30 billion by 2035 at a CAGR of 2.83%, the market is supported by the need for efficient, flexible, and cleaner energy generation in the context of global energy transition. While the industry faces challenges like fuel price volatility and decarbonization pressures, advancements in technology, integration with renewables, and future-ready solutions like hydrogen combustion position gas turbines as a key component of modern thermal infrastructure. As countries strive for reliability, sustainability, and economic viability in their power sectors, gas turbines will remain integral to the energy landscape of the future.

Key Companies in the Gas Turbines in Thermal Power Market Include:

Toshiba

Siemens

General Electric

MAN Energy Solutions

Fuji Electric

RollsRoyce

DresserRand

Ansaldo Energia

Solar Turbines

Baker Hughes

Bharat Heavy Electricals

Wartsila

MTU Aero Engines

Mitsubishi Power

Alstom

Gas Turbines In Thermal Power Market Segmentation Insights

Gas Turbines in Thermal Power Market Type Outlook

Open Cycle Gas Turbines

Combined Cycle Gas Turbines

Frame Gas Turbines

Aero-Derivative Gas Turbines

Gas Turbines in Thermal Power Market Capacity Outlook

Below 50 MW

50 MW to 150 MW

150 MW to 300 MW

Above 300 MW

Gas Turbines in Thermal Power Market Technology Outlook

Lean-Burn Technology

Dry Low NOx Combustion Technology

Steam Injection Technology

Advanced Cycle Technology

Gas Turbines in Thermal Power Market End Use Outlook

Utilities

Industrial

Commercial

Distributed Generation

Gas Turbines in Thermal Power Market Regional Outlook

North America

Europe

South America

Asia Pacific

Middle East and Africa

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