Coal-fired power generators will once again become the leading purchasers of cooling towers and repair parts and components for these towers. This year purchases worldwide by coal-fired power generators will be more than $1 billion. This compares to $1.8 billion which will be spent by owners of combined cycle gas turbine plants. However by 2004 purchases by coal-fired generators will be more than $1.6 billion while purchases by combined cycle gas turbine owners will be only $1.5 billion. By 2006 coal-fired generators will account for 46 percent of the $3.8 billion cooling tower purchases while gas turbines will account for 36 percent. The balance will come from nuclear power, chemical, petroleum, pulp and paper and other industries.
The market in NAFTA will reach an all time high of $1.7 billion this year but will then drop to $1.5 billion in 2003. This is due to the anticipated lower level of combined cycle turbine orders. The European market will edge past $700 million this year while the Asian market will be just under this mark. Revenues in Africa and the Middle East will be under $200 million. The Asian market will show the greatest growth in the next five years. Revenues in 2006 are projected to be $1.2 billion.
Dry cooling is becoming the technology of choice for many purchasers. Wet cooling results in the evaporation and loss of substantial quantities of water. In many areas of the world water is becoming a precious commodity. Water availability limitations in Taiwan have resulted in recent orders for dry cooling. Project developers of new coal-fired boilers in the western U.S. are also in many cases easing their permitting difficulties by opting for dry cooling. Dry cooling requires a much bigger initial capital investment. While more developers are still sticking with wet cooling, sub dry cooling will account for more than 50 percent of new tower revenues. The bulk of repair and component revenues, however, will continue to be for wet cooling.
The cooling tower industry is now global. Hamon, a European based company, has developed a substantial presence in the U.S. through several acquisitions. Global Water Technology has expanded from its U.S. base. Marley has had a substantial international presence for many years. GEA and BDT have utilized their European experience to address the markets in the rest of the world. This market represents a large opportunity for suppliers of cooling tower chemicals such as Ondeo Nalco and GE Betz. It is a big market for suppliers of fans, pumps, piping, and valves. The increasing popularity of dry cooling benefits the fan suppliers but reduces the market potential for suppliers of treatment chemicals, pumps, and other water-related equipment.