The rising costs of energy are shaping the $27 billion per year pump market in a number of ways. This is one of the conclusions in the continually updated Pumps: World Market report, published by the McIlvaine Company, Northfield, Ill.
The report predicts that world pump revenues will rise from $27 billion in 2005 to $32 billion in 2008. While the general rate of growth will be modest, certain sectors will be very stagnant, while others will be growing at double-digit rates. Rising energy costs are a factor in this disparity.
The market for pumps used in coal-fired power plants has reached a peak many times higher than the average over the last several decades. In fact, China alone, over just a four year period, will buy more pumps for coal-fired plants than the rest of the world purchased over the previous ten years. Both the U.S. and China are making big investments in scrubbers to capture SO2 emissions. Huge pumps are required for this application.
This increase in the coal-fired generation market is matched by decreased activity in the sale of gas turbines. Pump sales for a gas turbine are much less than for a coal generator of equal size. Thus, this rise in energy prices is a net gain for the pump industry.
The boom in construction of new tar and oil sands plants in Canada is directly tied to the rising prices of the oil which will be extracted. This is a big market for slurry pumps.
Large pumps are the heart of hydroelectric, flood control and irrigation projects.
The rising prices have also spurred the construction of ethanol and LNG plants both of which require significant pump investments.
The rising energy prices make membrane desalination more attractive than thermal. Expensive high pressure pumps are needed to drive the pure water through the nearly impervious reverse osmosis membranes.
One of the biggest potential markets is likely to be coal liquefaction. At the present price of oil, the U.S. and China both would be better off converting their coal into oil rather than purchasing it offshore. China is moving ahead with a big program.
URACA Pumpenfabrik has an order for six high pressure reciprocating pump systems with a value of nearly 14 million Euros from the Shenhua Group Corporation of China which is building a large coal liquefaction plant.
The higher energy prices are also placing a premium on purchasing more efficient pumps. The biggest cost in owning and operating a pump is usually the energy consumption. Some designs are more efficient than others, so rising energy costs shape the market.
Rising energy costs in the U.S. have driven industries which are big energy consumers offshore. Therefore, the market for pumps used in pulp and paper, chemicals, metal working, and refining has shifted, making Asia the largest purchaser.