DCS in power generation market hits new high

The power generation Distributed Control System (DCS) market growth has rebounded after the world economic downturn, especially in the emerging economies of Latin America and Asia, according to a new ARC Advisory Group study.

Western Europe and North America saw slower growth recently and ARC projects this to continue through 2017, according the study, “Distributed Control Systems for Power Generation Industry Global Market Research Study.”

The power automation market in North America and Western Europe consists primarily of modernization and retrofit projects with project justification closely coupled to the remaining lifecycle of the plant.  Plants fueled by gas are projected to lead the fossil fired market for automation projects, given the abundant supply and low cost of the fuel in North America.  Renewables (hydro, solar, wind) are also growing rapidly, but today, they still represent less than 15 percent of the market.   Coal fired plants continue to dominate on an installed basis; however, ARC projects that DCS projects for coal plants will diminish.

The resurgence in power generation projects — including many large greenfield projects — will not only drive demand for DCSs, but also for Collaborative Production Management (CPM), Advanced Process Control (APC), optimization, and training simulators.

The DCS market has primarily been a services business for the past few years, with combined project and after-sales or operational services accounting for almost half of total revenues.  The Main Automation Contractor (MAC) concept continues to grow stronger and build in scope.  ARC sees end users demanding strong local content on MAC projects, ensuring a strong support presence once the project has been commissioned. Also, the MAC scope is increasing, often including the electrical content of the project, thereby further reducing the project engineering cost and also reducing overall risk for the end user.