The market for liquid and gas fuelled power generation is expected to remain challenging as economic uncertainty continues. Despite the slower economic growth in the emerging markets, growth in electricity demand will support power plant investments. In the OECD countries, low economic growth continues to limit demand for new power plants. Low gas prices are driving demand in the USA. The megatrend towards distributed, flexible gas-fired power generation is gaining further ground globally. The increasing deployment of intermittent renewable power, such as wind and solar, will require flexible solutions to balance the power systems. Electricity markets, all over the world, are being developed to accommodate the necessary flexibility.
The overall outlook for the shipping and shipbuilding markets remains challenging. Overcapacity continues to affect demand. Low oil prices are impacting investments in offshore exploration and development, resulting in weak contracting of offshore drilling units and support vessels. Gas carrier contracting is expected to remain on a normalised level. The outlook for the cruise segment remains positive thanks to an anticipated increase in Asian passenger traffic, while the outlook for ferries is supported by signs of economic recovery in the USA and Europe. The importance of fuel efficiency and environmental regulations are clearly visible. The regulatory environment is driving interest in gas as a marine fuel in the wider marine markets.
The overall 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 is offsetting the slower service demand for older installations and the uncertainty regarding short-term demand in the merchant marine segment. The service demand for installations operating on oil based fuels is expected to grow as low oil prices have had a favourable impact on operating costs. Although the decline in oil prices has resulted in a challenging outlook for offshore services in specific regions, the growth during recent years in the offshore installed base partially compensates for a potential decline in service volumes. 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.