The market for liquid and gas fuelled power generation is expected to remain challenging as economic uncertainty continues. Despite slower economic growth in the emerging markets, growth in electricity demand, and the availability of international funding for infrastructure projects will continue to support power plant investments. In the OECD countries, low economic growth continues to limit demand for new power plants, and in Europe the unfinished new electricity market design is delaying investments. Low gas prices and positive developments in electricity market designs are driving the demand in North America. The megatrend towards distributed, flexible, gas-fired power generation continues to gain ground globally. The increasing deployment of intermittent renewable power, such as wind and solar, requires investments in flexible solutions to balance the power systems. Electricity markets are being developed to reward the necessary flexibility, thereby enabling new profitable investments. Wärtsilä’s systematic market development work in these markets will continue to bring forward the benefits of Smart Power Generation.
The outlook for the shipping and shipbuilding markets remains challenging, with oversupply limiting demand for newbuild vessels and low oil prices continuing to impact investments in offshore exploration and development. Gas carrier contracting is expected to remain at a normalised level due to the continued demand for LPG in Asia. The outlook for the cruise and ferry segment remains positive thanks to economic recovery in Europe and the United States, as well as increased interest for cruises in Asia. The importance of fuel efficiency and environmental regulations are clearly visible. Increased environmental awareness and the regulatory environment is driving interest in gas as a marine fuel in the broader marine markets.
The service market outlook is positive with growth opportunities in selected regions and segments. An increase in the installed base of medium-speed engines and propulsion equipment, as well as the shift to gas based technology, offsets the slower service demand for older installations and uncertainty regarding short-term demand development in the merchant marine segment. The favourable impact of low oil prices on operating costs is expected to continue to support the demand for service work on installations operating on oil based fuels. In the offshore segment, the growth in the installed base during recent years is expected to partially compensate for the challenging outlook in certain regions. The service outlook for gas fuelled vessels remains favourable. Service demand in the power plant segment continues to be good with an especially positive outlook in the Middle East and Africa. Customers in both the marine and power plant markets continue to show healthy interest in long-term service agreements.