Report: Eastern Europe cogeneration market to grow

Deregulation of gas and electricity market is projected to boost demand for cogeneration facilities in the relatively unsaturated markets of central and eastern Europe markets, predict industry experts. Frost & Sullivan estimates the market for cogeneration equipment in eastern Europe could rise to $700 million in 2006 from $380 million in 1999.


Deregulation of gas and electricity market is projected to boost demand for cogeneration facilities in the relatively unsaturated markets of central and eastern Europe markets, predict industry experts.

Restructuring, fuel and energy rate reform, state incentives, and availability of project finance will continue to affect market stability for some time, says Ian French, a consultant with Frost & Sullivan, an international marketing and consulting concern.

Yet most of the generating capacity across eastern European nations requires replacement, refurbishment, or modernization, experts say. Cogeneration's high generating efficiencies have attracted a rising number of end-users because it is one of the most effective means of converting fuel to energy at favorable economic levels, French says. Electric generators dominate sales in the CEE equipment product market, followed by gas turbines and heat-recovery boiler sales.

By the end of 2006, French predicts the reciprocating engine sector will advance to second position, eclipsing sales of gas turbines. Fuel-fired steam generators have traditionally prevailed for energy production in the region.

"It is significant that new trends are developing where gas turbines are being installed as the preferred generating option," French says.

He is expecting the market to attract numerous players, increasing competition until it more closely resembles the intensity seen in western European markets.

"However," French says, "the potential for companies to exploit this relatively new sector is significant and continues to provide abundant opportunities for expansion."

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