The main drivers for Wärtsilä's Energy Solutions business are:
- Economic growth, electrification and improving standards of living
- Growth in sustainable energy, reducing carbon emissions
- Rapid growth of intermittent renewable generation and escalating demand fluctuation
- Replacement of other fossil fuels with natural gas
- Ageing installed capacity driving investments in new technologies
Economic growth, improving standards of living, and consequential electrification are jointly resulting in an increase in electricity consumption in non-OECD countries. The demand for flexible base load power plants, as well as for industrial self-generation, is being driven by the price of electricity purchased from the grid, and by fuel price developments. With the introduction of gas supply networks to the emerging markets, the demand for gas and dual-fuel driven power plants is increasing, and Wärtsilä has a leading position in these markets.
In the OECD countries, tightening emissions legislation is forcing the closure of ageing capacity, which in turn drives the demand for new investments. Another driver is the political emphasis towards low carbon power systems, which is resulting in rapidly increasing levels of renewable generation. This has already created a substantial need to add flexibility to power systems. Wärtsilä’s Smart Power Generation power plants represent the most efficient solution for providing back-up support to variable renewable generation, and enabling the transition to a sustainable, reliable, and affordable low carbon power system.
Energy Solutions’ competition
In larger gas-fired projects, Wärtsilä is facing competition from gas turbine manufacturers, such as GE and Siemens. In smaller gas power plant projects, and in the heavy fuel oil power plant market, the competitors are mainly other combustion engine suppliers, such as MAN Diesel & Turbo, GE Jenbacher, Caterpillar (MAK), and Rolls-Royce.
When competing against gas turbines, Wärtsilä’s combination of competitive efficiency, greater fuel flexibility, and superior operational flexibility enables the presentation of better value propositions and business cases to many customer projects. Wärtsilä’s systematic market development is shaping the energy sector by utilising a value based market approach, which builds on monetising the benefits of Smart Power Generation.
Wärtsilä’s advanced gas and dual-fuel engine technology, optimised modular power plants, superior project management capabilities, and the global service support provided throughout the lifecycle of installations, have led to Wärtsilä’s market leading position in the gas and liquid fuel combustion engine power plant markets.
In the utility scale solar PV business, independent, regional, and local EPC companies are the main competitors. The competition in LNG infrastructure projects comes mainly from contracting companies.